unit 1 - 6

pfm final

Car Detail

A service provided by specialists who clean and polish the outside as well as clean and treat the interior of a car.

Car Registration

A license tag fee that must be renewed annually.

Car Title

A legal document that establishes ownership of the vehicle.

Car-Buying Service

A service that allows you to choose the vehicle features you want, and a professional car buyer takes over the price negotiation for you.

Classic Cars

Older vehicles in excellent condition that appreciate if valued as collectors' items.

Dealer Add-Ons

High-priced, high-profit dealer services that add little or no value to an automobile.

FTC Rule

Requires that dealers fully disclose to buyers what is and is not covered under warranty for the used vehicle.

Hybrid

A type of vehicle that uses alternate energy sources, such as natural gas or battery power, in addition to gasoline.

Invoice Price

The price the dealer paid for a car.

Lemon

A car with substantial defects that the manufacturer has been unable to fix after repeated attempts.

Lemon Laws

Laws that protect consumers from the consequences of buying a defective car.

Oxidize

A chemical reaction with air that causes paint to lose its color and shine.

Polishing Compound

A substance that can smooth out surface scratches, scuffs, and stains.

Preapproval

The process of getting a new- or used-car loan prearranged through your bank or credit union.

Sticker Price

The manufacturer's suggested retail price (MSRP) shown on the tag in the car's window.

Upholstery

The seat-covering material in a car.

Vehicle Emission Test

A test to verify that a vehicle meets the minimum clean-air standards.

Vehicle Identification Number (VIN)

An alphanumeric number that identifies each vehicle manufactured or sold in the United States.

Assigned-Risk Pool

A group of people who are unable to obtain automobile insurance due to high risk

Collision Coverage

Automobile insurance that protects your own car against damage from accidents

Comprehensive Coverage

Automobile insurance that protects you from damage to your car from causes other than collision or vehicle overturning

No-Fault Insurance

Automobile insurance in which drivers receive reimbursement from their own insurer, no matter who caused the accident

Personal Injury Protection (PIP)

Automobile insurance that pays for medical, hospital, and funeral costs of the insured's family and passengers, regardless of fault

Umbrella Liability Insurance

A supplement to your basic auto and property liability coverage that expands limits and includes additional risks

Uninsured/ Underinsured Coverage

Automobile insurance that pays for your injuries when the other driver is legally liable but unable to pay

Attractive Nuisance

A dangerous place, condition, or object that is particularly attractive to children

Co-insurance Clause

A provision requiring policyholders to insure their building for a stated percentage of its replacement value to receive full reimbursement for a loss

Endorsement

A written amendment to an insurance policy

Homeowner's Policy

Insurance that protects property owners from property and liability risks

Liability Coverage

Insurance to protect against claims for bodily injury to another person or damage to another person's property

Personal Property Floater

Insurance coverage for the insured's movable property wherever it may be located

Renter's Policy

Insurance that protects renters from property and liability risks

Uninvited Guest

A person presumed to have permission to be on your property

HMO

A group plan offering prepaid medical care to its members.

Basic Health Coverage

Coverage for medical, hospital, and surgical costs.

Group Insurance

Health insurance obtained through employers in which all insured have the same coverage and pay a set premium.

Major

Coverage against catastrophic expenses of a serious injury or illness.

Stop-Loss Provision

An insurance clause that caps or sets a maximum that the insured has to pay during any calendar year.

Health Insurance

A plan for sharing the risk of high medical costs resulting from injury or illness.

COBRA

A law that allows insurance to continue after employment ends.

Flex 125 Plan

An employee benefit program that allows employees to set aside pretax money for deductibles and co-payments.

Portability

The feature that allows a group policy to be converted into an individual policy.

Term Life Insurance

A life insurance policy that remains in effect for a specified period of time.

Double Indemnity

A rider that allows the beneficiary to be paid double the face amount of the insurance policy in the event of accidental death.

Disability Insurance

An insurance plan that makes payments to replace income lost when illness or injury prevents the insured from working.

Incontestable Clause

A provision that prevents denial of coverage after a period of time.

Permanent Life Insurance

Life insurance that remains in effect for the insured's lifetime and builds a cash value.

Life Insurance

Insurance that provides funds to the beneficiaries when the insured dies.

Cash Value

The savings accumulated in a permanent life insurance policy.

On-Campus

Dormitory, Co-op

Off-Campus

Apartment, House, Duplex, Condo

Security Deposit

A refundable amount paid in advance to protect the owner against damage or nonpayment

Planning Your Moving

Having savings
Have income
Have supplies
Think ahead
Make reservations and plans

Bundling

Combining services into one package

Renting

The process of using another person's property for a fee

Landlord

The owner, or owner's representative, of rental property

Tenant

A person who rents property

Lessor (Landlord)

Person responsible for the property

Lessee (Tenant)

Person who will take possession of the property

Rental Agreement (Month-to-Month Agreements)

A written agreement that allows you to leave anytime as long as you give the required notice

Rental Inventory

A detailed list of current property conditions

Landlord Obligations

Locks
Window guards for child protection
Health, Safety, and maintenance standards

Advantages of Home Ownership

Value and equity
Quality of life
Tax savings

Market Value

What a ready and willing buyer and a ready and willing seller would agree upon as the price

Appraised Value

The recent selling price of a similar home in your area is a good estimate of the current value of your home.

Assessed Value

It is usually a percentage of market value. Used to determine property tax (determined by municipality).

Equity

The difference between the market value of property and the amount owed on it.

Down Payment

(10-20% of purchase price)
The most common sources of down payment money are personal savings and informal loans from parents or relatives.

mortgage

A loan to purchase real estate

Types of Mortgages

Fixed-rate mortgages & Adjustable-rate mortgages

Adjustable-rate mortgages

(ARM) a mortgage for which the interest rate changes in response to the movement of interest rates in the economy as a whole.

Fixed-rate mortgages

A mortgage on which the interest rate does not change during the term of the loan.

Closing Costs

Typically $3,000-$5,000

Home Ownership Costs

Property Taxes,Property Insurance,Utilities, and Maintenance & Repairs

Deductible

The specified amount of a loss that you (the insured) will have to pay.

Economic Risk

A risk that may result in gain or loss because of changing economic conditions.

Indemnification

Putting the policyholder back in the same financial condition he or she was in before a loss occurred.

Insurable Interest

Any financial interest in life or property such that, if the life or property were lost or harmed, the insured would suffer financially.

Insurable Risk

A pure risk that is faced by a large number of people and for which the amount of the loss can be predicted.

Insurance

A method for spreading individual risk among a large group of people to make losses more affordable for all.

Liability Risk

The chance of loss that may occur when your errors or actions result in injuries to others or damages to their property.

Personal Risk

The chance of loss involving your income and standard of living.

Premium

The fee paid at regular intervals by the owner of an insurance policy.

Property Risk

The chance of loss or harm to personal or real property.

Pure Risk

A chance of loss with no chance for gain.

Risk Assessment

Understanding the types of risk you will face and their potential consequences.

Risk Assumption

Accepting the consequences of risk by self-insuring to absorb the loss.

Risk Avoidance

Lowering your chance of loss by not doing high-risk activities.

Risk Management

An organized strategy for controlling financial loss from pure risks and insurable risks.

Risk Reduction

Taking measures to lessen the frequency or severity of losses that might occur.

Risk Shifting

Transferring risk by buying insurance to cover potential losses.

Speculative Risk

A risk that may result in either gain or loss.

Money Market Fund

A mutual fund that invests in safe liquid securities.

Global Fund

A mutual fund that purchases international stocks and bonds as well as U.S. securities

Growth Fund

A mutual fund whose goal is to buy stocks that increase in value over time.

Prospectus

The legal document that offers securities or mutual fund shares for sale.

Income Fund

A mutual fund whose investment goal is to produce current income in the form of interest or dividends

Index Fund

A mutual fund that tries to match the performance of a particular index.

Load

The sales fee charged for buying mutual funds.

Balanced Fund

A mutual fund that minimizes risk by investing in a mixture of stocks and bonds.