Definition of "Hedging"
Method of transferring risk to permit the risk bearer to assume two offsetting positions at the same time so that, regardless of the outcome of an event, the risk bearer is left in a no win/no lose position. For example, in the options market, a stock owner of an underlying stock can write calls or buy puts. In the same options market, the short sellers of the underlying stock can buy calls or write puts.
Popular Insurance Terms
Life insurance on which a premium is collected on a weekly, bi-weekly, or monthly basis, usually at the home of a policyholder. The face value of the policy is usually $1000 or less. ...
Period of time an insured is sick and entitled to receive health insurance benefits. ...
Same as term Credit Card Insurance: coverage under a homeowners insurance policy in the event that a credit card is fraudulently used or altered. Fraud includes theft and the unauthorized ...
Statistical procedure used to calculate a premium rate based on the loss experience of an insured group. Applied in group insurance, it is the opposite of manual rates. Here the premiums ...
Same as term Unallocated Funding Instrument: pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds ...
Three types of damages can be awarded to a plaintiff: Special Damages reimbursement for out-of-pocket expenses, including medical bills, legal charges, cost of repairing damaged or ...
Correction of a contract containing a mistake in order to prevent a party to that contract from gaining from that mistake. For example, if $1,000,000, instead of the correct amount of ...
Cost computation form that assumes retirement and commencement of annuity payments on the first day of the month nearest the birthday when a retiree reaches normal retirement age. Most ...
Act that provides new funding for the Bank Insurance Fund and enhances the safety and soundness of the financial system. The FDICIA includes the Foreign Bank Supervision Enhancement Act ...
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