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20% Director (Controlling Director)

A company director who owns or controls more than 20% or more of the ordinary share capital of a company.

Date of entry

In Scotland, this is the same as exchanging contracts.

Death Benefit

A life insurance payment made upon the death of an insured person.

Debit card

Debit cards look like credit cards or ATM (automated teller machine) cards, but operate like electronic cash or a personal cheque. When a purchase is made with a debit card, the amount is automatically deducted from the associated account. No credit is extended to the cardholder and hence no debt or interest charge is incurred.

Declination

The rejection of an insurance application by an insurance company.

Declining Grant

A multi-year grant that becomes smaller each year, in the expectation that the recipient organization will increase its fundraising from other sources.

Decreasing Term Insurance

Life insurance which pays out a lump sum if you die within the term, but where the insurance sum assured reduces during the term. The earlier you die in the term, the bigger the payout your dependants get.

Decreasing Term Assurance

Life assurance that pays out an amount if you die during the term of the policy. The amount of cover reduces each year. So, this makes it ideal to cover repayment mortgages where the amount you owe the lender reduces each year. Decreasing term assurance is usually cheaper than level term assurance.

Deeds Fee

An administration charge made by lenders when you repay the mortgage to release the deeds of the property. Also known as a sealing fee.

Deferred Annuity

An arrangement by which a premium is paid in return for annuity payments that will commence at a future date.

Deferred Period

1. In relation to Permanent Health Insurance (PHI) / Income Protection, refers to the period between the commencement of illness, and the date at which eligibility for payment of benefit under the insurance policy would commence.
2. In relation to a Deferred Annuity, refers to the period between payment of the premium and commencement of the annuity payments.

Defined Benefit Pension Scheme (Final Salary Scheme)

Pensions scheme where the rules that define the benefits of the scheme are independent of the rules relating to contributions to the scheme. The benefit will usually be expressed as an amount of pension, often related to earnings and service.

Defined Contribution Scheme (Money Purchase Scheme)

A pension scheme which determines the benefits that will be paid in retirement according to the level of contributions paid to the scheme throughout it's term, including the investment growth on the contributions

Deflation

Deflation is the opposite to inflation and means that the money you have today will be worth more tomorrow. Unfortunately, it isn't as good as it sounds, because it makes people reluctant to spend, which is harmful for the economy. It is also very uncommon.

Demonstration Grant

A grant made to establish an innovative project or program which, if successful, will serve as a model and may be duplicated by others.

De-mutualisation

The procedure by which a mutual organisation owned by its members changes to a limited company owned by shareholders. This will often result in substantial windfall gains for the members (who are in effect the owners of a mutual organisation).

Dependant

An individual, a spouse or child or someone who depends on another for financial support and maintenance with regard to the normal necessities of life.

Dependant's Pension

A pension scheme option which, in the event of the death of the Pensioner, provides a continuing pension income to an individual who was financially dependent on the Pensioner at the time of the Pensioner's retirement or death

Deposit

1. A sum of money paid by a buyer as part of the sale price of something in order to reserve it. Depending on the terms agreed, the deposit may or may not be returned if the sale is not completed.
2. A sum of money left with an organisation, such as a bank, for safekeeping or to earn interest or with a broker, dealer, etc., as a security to cover any trading losses incurred.
3. A sum of money paid as the first instalment on a hire-purchase agreement. It is usually paid when the buyer takes possession of the goods..

Deposit Account

An account with a bank or building society, which pays a variable rate of interest. Higher rates are often available if you are willing to give notice before withdrawing your money.

Deposit Premium

The premium deposit paid when an application is made for an insurance policy.

Depreciation

1. The decrease in value of property over a period of time due to wear and tear or obsolescence.
   
   An amount charged to the profit and loss account of an organization to represent the wearing out or diminution in value of an asset. The amount charged is normally based on a percentage of the value of the asset as shown in the books; however, the way in which the percentage is used reflects different views of depreciation.
   
   Straight-line depreciation allocates a given percentage of the cost of the asset each year, thus suggesting an even spread of the cost of the asset over its useful life. Reducing- (diminishing-)balance depreciation applies a constant percentage reduction first to the cost of the asset and subsequently to the cost as reduced by previous depreciations. In this way reducing amounts are charged periodically to the profit and loss account; by this method the depreciated value of the asset in the balance sheet may approximate more nearly to its true value, in that many assets depreciate more quickly early and more slowly later in their life. Thus depreciation is principally a means of allocating the cost of an asset over its useful life.
   
   
2. A fall in the value of a currency with a floating exchange rate relative to another. Depreciation can refer both to day-to-day movements and to long-term realignments in value. For currencies with a fixed exchange rate a devaluation or revaluation of currency is required to change the relative value. .

Derivatives

A collective name for futures, options and warrants.

Direct Debit

A procedure under which an organisation to whom a payment is due claims the amount directly from the bank account of its debtor.

Disability

Physical or mental condition that prevents a person from undertaking 'normal' duties of a job or the ordinary activities of life. For insurance purposes the word 'disability' will have a special and particular meaning which will be defined in the policy concerned.

Disbursements

A solicitor's expenses - for example, for stamp duty, HM Land Registry fees, searches, faxes and so on.

Disclosure

1. The duty of any person applying for an insurance policy to tell the insurer all relevant information affecting the risk.
2. The duty of an intermediary to inform his client if commission is being paid (and, if so, how much) in respect of the business being placed.

Discounted Rate

An arrangement which gives you a set reduction, or 'discount' off our standard variable rate for a specified period of time. At the end of the specified period your mortgage rate will change to the standard variable rate in force at the time. Sometimes there are redemption penalties associated with this type of deal.

Discretionary Entrant

A member of a group insurance plan who did not have an automatic right to membership under the eligibility terms of the policy.

Discretionary Funds

Grant monies which are distributed according to a donor's judgement of requests as they are received, rather than funds whose purpose is predetermined.

Dismemberment

Loss of limb or sight.

Distribution

The payments of any investment income generated by a fund, usually made either half-yearly or quarterly. You can choose to have each distribution paid to you or to reinvest it in the fund for greater capital growth.

Dividend

1. An amount returned to the holders of certain types of policy, by the insurance company, out of its earnings
2. An annual payment by a company to its shareholders out of accumulated profits

See also: Bonus

Donee

Individual or organisation that receives a grant. Also called a grantee.

Donor

Individual or organisation that makes a grant. Also called a grantor.

Double Indemnity

Payment of twice the policy normal benefit for specific kinds of losses under certain conditions.

Dread Disease Policy

Also called Critical Illness Insurance Policy (see under that heading).

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