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Early Leaver

An individual who leaves a pension scheme before normal retirement date.

Early Retirement

The retirement of an individual and provision of retirement benefits before that individual's normal retirement date.

Earned Premium

The portion of an insurance premium for which protection has already been provided by the insurer.

Earnings Cap

Since 1989 there has been an upper limit on the amount of salary that can be taken into account when calculating pensions arising from and contributions payable under an approved arrangement. This is known as the 'earnings cap'. In the current year (1999-2000) the amount is £90,600.

Earnings Limit (Lower)

The minimum level of earnings which must apply in order for National Insurance Contributions to be payable by an individual.

Earnings Limit (Upper)

The maximum level of earnings on which National Insurance Contributions are payable.

Earnings Per Share

A widely used indicator of the return on equity investments. Any figure quoted represents the total amount of a company's earnings (after deductions) divided by the number of ordinary shares it has issued. (See also P/E)

Effective Date

The date on which insurance under a policy will begin.

Eligibility Date

The date at which an individual becomes eligible for benefits.

Eligibility Period

A specified period of time during which potential members of a group insurance scheme may join without evidence of insurability.

Eligibility Requirements

Requirements imposed for eligibility for coverage, usually in a group insurance or pension plan.

Eligible Employees

Employees who meet the eligibility requirements for insurance set out in a group policy.

Employee Benefits

Benefits offered to an employee by an employer and usually paid for at least in part by the employer. Life, Health and Critical Illness insurance obtained by an employer on a group basis are examples of employee benefits.

Employee Declaration

A medical questionnaire issued to member of a group insurance scheme when the members benefit level requires the member to provide evidence of good health. This is usually the first stage of the Medical Underwriting process.

Endorsement

An amendment of an insurance policy that alters the provisions of the contract.

Endowment

A life assurance policy related to a mortgage designed to pay off the amount originally borrowed at the end of the mortgage term. An endowment policy will pay you a fixed amount on a set date or if you die before that date, in other words it's both a way of saving and life insurance. People often use endowments to repay interest only mortgages. The drawback of them is that it is often unclear how much you are having to pay in charges and the plans are often very rigid, so if you start an endowment and then decide to cancel it, you might not get back what you paid in.

Endowment Mortgage

You only pay interest to the lender, but you also have to pay a monthly premium for an endowment policy that you take out with an insurance company. The endowment policy is designed to produce a lump sum either at the end of your mortgage term or at your death if earlier, to repay the capital you borrowed. You must remember though that the amount paid out is not guaranteed and may not be sufficient to repay the capital borrowed.

EPP

Executive Pension Plan.

Equity

1. A shareholding in a limited company. By extension, 'equities' is generally used to mean the whole range of shares traded on a Stock Exchange
2. The amount by which the value of a house exceeds the total of the loans secured by mortgage(s) thereon.

Equities

Another word for stocks and shares.

Equity Release

A type of remortgage where you own your home outright but wish to use it as security for new borrowing.

Escalation

Refers to the increase in benefit (usually annual) payable during the payment term of an insurance claim that is not settled via a lump sum payment. For example, claims under an Income Protection Policy might escalate annually in line with the Retail Price Index.

Estate

Strictly, an interest in land, but generally used to mean the total (land, chattels, investments, etc) owned by an individual.

Ethical Investments

Shares or similar investments (for example, holdings in unit trusts) in companies supposed to conform to a particular set of moral or ethical principles. Different ethical values have led to a proliferation of funds of this nature with different principles & for example, some will avoid investing in arms manufacture, and others will avoid tobacco companies. There is ongoing debate as to whether the following of such principles adversely affects the investment performance of ethical funds.

Euro

The European Single Currency.

Ex Gratia Payment

Latin for "from favour." A payment by an insurer to an insured for which there is no liability under the contract.

Exchange of Contracts

The point at which the buyer and seller have legally committed themselves to the sale and purchase of the property.

Execution Only

Where a customer buys a financial product without receiving advice on its suitability.

Executive Pension Plan (EPP)

A Pension Plan for selected Company Directors or Employees which provides individual benefits, subject to Occupational Money Purchase Pension Scheme rules.

Exempt Approved Scheme

A scheme other than a Personal Pension, which has been approved by the Inland Revenue under the Income & Corporation Taxes Act 1988.

Excess

A fixed amount of money which the insured agrees to contribute toward the cost of a claim under an insurance policy.

Exclusions

Conditions or circumstances listed in the policy, for which the insurer will not provide benefits.

Executive Pension Plan

An individual occupational pension arrangement that is normally used for senior employees / executives. The rules of an occupational pension and not those of a personal pension govern an Executive Pension Plan.

Exempt Approved Scheme

An Inland Revenue approved pension scheme, which is established under an irrevocable trust and hence qualifies for tax advantages relating to contributions, income and capital gains from investments.

Expense Ratio

The ratio of insurance company operating expenses to premiums.

Experience Rating

Process of determining the premium rate for a group risk, wholly or partially on the basis of that group's claims experience to date.

Express Money Transfer

This is a foreign currency payment to an individual or organisation delivered electronically to a bank. It takes around 2-5 days, depending on the currency and destination.

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