Unit 6: Investment, Credit, Financial Protections

Insurance

Is protection against loss and preparation for the unexpected

Deductible

The amount of money required for policyholders to pay out of pocket before the insurance company is required to pay their coinsurance percentage.

Premiums

The monthly cost to the policy holder to have the insurance policy. Premiums are not credited toward the plan deductible

Coverage Limits

Max amount that your insurance will pay for a covered loss

Renters Insurance

Protects the renter from loss due to theft, damage, or liability

Homeowners Insurance

Protection for your home and its contents in case of fire, theft, tree falling, etc

Umbrella Policy

Protects your assets if you are sued; an extra layer of liability protection if needed due to accident or injury when someone else is harmed.

key factors that affect your fico score the most

1.Payment history

2.debt

3.Length of credit history

4.New credit

5.Types of credit

What is in your credit report?

• Personal identification 

• Public records

• collections

• Credit accounts

• Requested credit files

revolving credit

Open-ended credit account that can be used and paid repeadtly

installment credit

A loan you make fixed payments on over a period of time

chapter7

someone sells your assets in order to pay your creditors

chapter 13

a plan is put in place to pay back your creditors

Annual Percentage Rate (APR)

it is the interest rate for a whole year, rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc.

Compound Interest Rates

returns both principal and the interest you’ve already earned causing balance to grow at an accelerating rate

Simple Interest Rates

 return only the original principal so you earn the exact amount every period

Fixed Interest Rates

a rate that stays constant throughout the entire term of the loan

Variable Interest Rates

a rate that can change over time based on market conditions

Real Returns

increase in your purchasing power, measures how much more G&S you can buy after accounting for inflation

Nominal Returns

the percentage increase in the dollar amount investment without accounting for inflation

Certificates of deposit

Very safe, but instant access carries a penalty

Bonds

Lending money to a corporation or government with a promise of higher returns than those offered by bank and savings accounts and CD’s

Better Business Bureau

rates business’s based on their ethics and performance

Fair credit reporting act

regulates how credit reporting agencies collect and use consumers credit information.

fair debt collections practices act

protects consumers from abusive/harassing debt collection practices

Dodd-frank act

prevents excessive risk taking and holds Wall Street accountable, enforces rules of the financial marketplace, supervises and enforces consumer finaical law

securities act of 1933

requires public companies to register with sec and submit annual financial statements

federal trade commission

enforces consumer protection and antitrust laws, investigate and prevents unfair business practices