Situations in which two outcomes are possible: loss or no loss

Insurance that provides a benefi t if the insured becomes totally and permanently disabled through accident or injury, preventing him or her from working

Insurance that provides cover for 'eligible' business expenses (including interest, lease payments, rates, rent, taxes, telephones and insurance) as agreed when the policy is taken out, while the insured person is incapacitated

The causes of loss

A legal obligation imposed in a contract to do or not to do something

The situation in which those most likely to suffer a loss seek to purchase insurance

Coverage for all of life, up to and in some cases beyond age 100

The sum of the total current value of a fund's assets, less the value of any debts (liabilities) owed by the fund, divided by the number of fund shares outstanding

A collective investment fund that allows additional investment from existing and new investors, and allows existing investors to withdraw funds. The fund manager must create new units in the fund when an investment is made and redeem units when a withdrawal is made.

Investment pools that use a combination of market philosophies and analytical techniques to develop financial models that identify, evaluate and execute trading decisions. The goal is to provide consistent, above-market rates of return while substantially reducing the risk of loss.

As the number of insured risks (or anything that can be measured with a probability) increases, the deviation between actual and expected results will decline

Loss of life while others are financially dependent on you

Insurance that provides insurance against all losses except those that are specifically excluded

Insurance designed to provide regular payment to policyholders if they are unable to work for an extended period because of illness or accident

Insurance against direct or indirect loss to property

The writing of insurance on just about any risk to get the premium dollars to invest at high interest rates

Insurance to cover the medical costs associated with illness and injury

The process by which insurers shift some of the risk that they have insured to another insurance company

The risk of immoral behaviour, leading to a negative outcome, increasing because the individual that causes the problem does not suffer the full (or any) consequences and may benefit

Pure life insurance for a specified period of time, less than all of life

The transfer of a pure risk to an entity that pools the risk of loss and provides payment if a loss occurs

The risk-bearing function of the investment banker. Underwriting occurs when the investment banker guarantees fixed proceeds to security issuers while uncertain of the eventual resale price.

Insurance that provides a lump sum payment if the insured suffers a specified trauma

The transference of insurable risk to the capital markets through the creation of a financial instrument

Insurance against the peril of legal liability

The deviation between actual losses and expected losses

Insurance policies that provide a listing of perils that are covered. If a loss is caused by a peril not listed, the loss is not covered.

The first portion of any loss that must be met by the insured

A policy that allows the insured to renew it without having to prove they are still insurable

Situations in which there are three possible outcomes: loss, no loss or gain

A trust with pro rata interests in an unmanaged pool of assets

Managed funds that aim to match the return from a particular market index, such as the ASX200

Insurance that permits the term coverage to be switched to whole-life insurance without providing evidence of insurability

A superannuation fund that pays out the sum of the contributions made by the employee and the earnings on those funds

The decision of insurance companies to refuse to issue insurance to individuals with particular characteristics, such as place of residence, age, gender, education and marital status

A fund that initially sells its shares to the public to obtain cash to invest and then operates with a fixed number of shares outstanding

A loss-sharing provision in insurance

The variation of the market price from NAV for closed-end investment companies

Shifting the responsibility of bearing the risk from one party to another

A government-controlled investment strategy aimed at providing resources that can be used upon retirement

A trust that pools the resources of investors to purchase commercial, industrial and retail property with a view to generating both income and capital gains for the investors

Spreading losses suffered by a few insured over the entire group so that insurance purchasers substitute the average loss (a small amount) for the uncertainty that they might suffer a large loss

A superannuation plan in which the employer states the benefi t that the employee will receive at retirement