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- TABLE 38
- The government table that is used in determining the economic benefit (taxable amount) provided on a split dollar plan using a survivorship life insurance policy. This table is based on joint probabilities and therefore has lower rates then the PS 58 tables that are used for single lives.
- TAX AVOIDANCE
- A legal action designed to reduce or eliminate the taxes that one owes.
- TAX CREDIT
- A dollar-for-dollar reduction in the amount of tax that is due. A tax credit is more valuable than a tax deduction of the same amount.
- TAX DEDUCTION
- Expenses that reduce taxable income for individuals or businesses.
- TAX DEFERRED
- An investment whose earnings are free from taxation until they are withdrawn by the investor. Examples of tax deferred investments include the following:
- TAX-DEFERRED ANNUITY
- See deferred annuity.
- TAX EVASION
- An illegal action designed to lower or avoid the taxes that one owes.
- TAX-EXEMPT
- See Tax free.
- TAX FREE
- An investment whose earnings are free from federal income tax. An example of tax-free investment is a Municipal Bond.
- TAX PREFERENCE
- An investment that has special income tax and/or estate tax treatment that may make part or all of the distributions taxed at a lower rate or exempt entirely from taxation.
- TAX-QUALIFIED PLAN
- See qualified pension plan.
- TAX-SHELTERED ANNUITY
- Under Section 403 (b) of the Internal Revenue Code employees of a public school system or a qualified charitable organization are allowed to contribute up to $9,500 into a retirement plan. The accrual of dividends and cash values is not taxable until the annuitant actually receives the benefits, and only on the amount that exceeds the investment in the annuity.
- TAXABLE-EQUIVALENT YIELD
- The yield that would be needed on a taxable investment (e.g., a bank saving account) to equal a non-taxable investment (e.g., municipal bond).
- 10 DAY FREE LOOK
- A provision in life insurance policies that is mandated by many states. The provision provides a ten-day period, begging when the policy is delivered, whereby the policy may be returned and the premiums paid are refunded. This provision is also known as the Right to Return Provision.
- TENANCY BY THE ENTIRETIES
- A form of joint property ownership between a husband and wife similar to joint tenancy with right of survivorship.
- TENANCY IN COMMON
- A form of joint property ownership where the individual owners are not necessarily related to one another and their interest in the property are not necessarily equal shares.
- TERM LIFE INSURANCE
- A low-cost form of life insurance that stays in effect for a specific period of time. If the insured dies during the coverage period, the beneficiary will receives the death benefit. If the insured survives the specified time period, the policy expires and the obligations terminate. Term insurance works best when the coverage is needed for only a specific period of time or near-term cost is an overriding factor. In early years, term insurance costs are less then a Whole Life or other cash value policies. Term insurance becomes increasingly expensive as the insured grows older. There are a number of variations of term life insurance. These variations are as follows:
- TERM INSURANCE CONVERSION CREDIT
- Some term insurance policies provide a provision whereby a portion of the premium paid on the term life policy is credited towards the conversion of the policy into a permanent life insurance policy.
- TESTAMENTARY TRUST
- A trust created through the will of its creator.
- TESTATE
- When a person dies having left a will. Contrasted with intestate.
- TESTATOR
- The person making a will.
- THIRD PARTY
- An individual other than the insured (First Party) or the insurer (Second Party) who has incurred a loss or is entitled to benefit payments that have resulted form the actions of the insured.
- TIME VALUE OF MONEY
- The effect that time and compound interest has on money.
- TIMING RISK
- A form of investment risk that the investor may buy or sell an investment at the wrong time.
- TITLE INSURANCE
- A form of insurance that protects a real estate owner and lenders from challenges to the title to the insured property. Title insurance is written by title insurance companies and generally has a single premium payment with the policy staying inforce until the property is sold.
- TOTAL DISABILITY
- A definition of disability in a disability income policy that is based upon the insured's inability to perform the important duties of their own occupation. In some policies it may refer to an inability to perform any other type of work.
- TRANSFER OF INSURED
- A rider on a corporate-owned life insurance policy that allows for the transfer of coverage. For example, if a corporation buys an insurance policy on a key executive and that individual retires or leaves the firm, the policy could be transferred to the replacement. Evidence of insurability and an adjustment in the premiums to account for the new insured's age and sex would be made. Also see business insurance.
- TREASURY BILL (T BILL)
- A marketable, short-term US Government debt security issued at a discount from par value with maturities ranging from 90 days to one year.
- TREASURY BOND (T BOND)
- A marketable, long-term US Government debt security issued at a fixed interest rate with maturities of ten to thirty years.
- TREASURY NOTE (T NOTE)
- A marketable, medium-term US Government debt security issued at a fixed interest rate with a maturity of one to ten years.
- TRUST
- An equitable right or interest in a property distinct from the actual legal ownership of said property. Temporary or conditional terms exist under a trust until ownership can legally be transferred. The more common types of trusts are as follows:
- A-B Trust,
- Charitable Trust,
- Credit Equivalent Bypass Trust (CEBT),
- Crummey Trust,
- Inter Vivo Trust ,
- Irrevocable Living Trust,
- Life Insurance Trust,
- Living Trust,
- Marital Trust,
- Minor's Trust (Section 2503(c),
- Pour-Over Trust,
- Qualified Domestic Trust (QDOT),
- Qualifying Terminable Interest Property (QTIP) Trust,
- Secular Trust,
- Rabbi Trust, and
- Testamentary Trust.
- TRUSTEE
- The person or entity that holds the title to a property for the benefit of another, usually a minor. This may involve an individual or company such as a bank or trust company.
- TRUSTOR
- In estate planning, the individual who submits their written observations regarding the terms of the trust and the process of transferring property to the trustee.
- TURNOVER
- As applies to the portfolios of individuals and institutional investors such as mutual funds, the volume of shares traded relative to the total number of shares owned during a given period, usually a year.
- 12b-1 FEE
- An assessment on shareholders of certain mutual funds to cover sales and marketing expenses. These fees are generally prevalent in funds sold by brokers, insurance agents and financial planners.
- TWISTING
- The practice of convincing a policyholder to lapse or cancel a policy specifically for the purpose of replacing the coverage previously in effect.
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