Reference
Financial & Business Glossary
Clear explanations of financial, insurance, business and legal terminology.
- Accrual Accounting
An accounting basis that records revenue when earned and costs when incurred, regardless of when cash moves.
- Amortisation
The schedule by which each repayment is split between interest and principal, gradually reducing the outstanding balance to zero by the end of the term.
- APR
The yearly cost of borrowing expressed as a percentage, combining the interest rate with most compulsory fees so that two offers can be compared on one number.
- Beneficiary
The person or entity nominated to receive proceeds from a policy, most commonly under life cover.
- Churn
The proportion of customers or revenue lost during a period, used as the standard retention measure for subscription businesses.
- Claim
A formal request to the insurer for payment after an insured event, subject to notification deadlines and evidence requirements.
- Coverage
The set of events, losses, and liabilities a policy agrees to pay for, defined together with its limits and exclusions.
- Credit File
The record held by a credit reference agency showing an individual's borrowing, repayment history, and search activity, used as one input into lending decisions.
- Deductible
The amount the policyholder covers before the insurer pays anything on a claim. Also called an excess in some markets.
- Endorsement
An amendment that adds, removes, or varies terms in a base policy, read together with the original wording.
- Exclusion
A situation, cause, or item a policy explicitly does not pay for.
- Indemnity
The principle that an insurance payout returns the insured to the financial position held immediately before the loss — no better and no worse.
- Interchange Fee
The portion of a card transaction fee paid by the merchant's acquirer to the cardholder's issuing bank, set by the card network.
- Interest Rate
The percentage a lender charges for the use of borrowed money over a period, quoted before fees and separate from the total cost measure.
- Liability
A legal responsibility to compensate or perform, arising from contract, statute, or a duty owed in general law.
- LTV
The loan amount expressed as a percentage of the property's value, used by lenders to band applications by risk and to set pricing.
- MRR
The normalised monthly value of active subscriptions, excluding one-off charges, used to track the recurring portion of a software business.
- Policy
The written contract between the insured and the insurer, comprising the schedule, the general terms, and any endorsements.
- Premium
The amount charged by the insurer for a policy, usually stated per month or per year, reflecting the insurer's assessment of risk, its expenses, and applicable taxes or levies.
- Reconciliation
The process of matching transactions in an accounting ledger against an independent record, most often a bank statement, to confirm both are complete and accurate.
- Refinancing
Taking out a new loan to repay an existing one, usually to change the rate, the term, the lender, or the amount borrowed.
- SaaS
Software licensed on a subscription basis and delivered over the internet, with the vendor operating the infrastructure.
- Statute of Limitations
The legally fixed period within which a claim must be brought, after which the right to sue is normally lost.
- Underwriting
The insurer's or lender's process of assessing an application, sorting it into a risk group, and setting terms and price accordingly.