Purchasing Power Risk
Definition of "Purchasing power risk"
Investment risk associated with the relationship between the yield (interest, dividends, and capital) of financial instruments and the rate of inflation in the economy. For fixed income financial instruments such as a fixed dollar annuity and fixed dollar life insurance, the financial security of the recipient is diminished in proportion to the rise of inflation.
Popular Insurance Terms
Inverse of the actuarial present value of a life annuity, taking the employee's life expectancy into account, to commence income payments at the normal retirement age of the employee. It is ...
Total shareholders' equity divided by total common shares outstanding. ...
Individual prohibited under the employee retirement income security act of 1974 (erisa) from conducting transactions with a trust plan. The prohibition is intended to prevent a conflict of ...
Section in some property insurance contracts that eliminates further coverage for buildings after they have collapsed from causes other than fire or explosion. For example, fire coverage ...
Proposal, endorsed by then-President Bush and Secretary of the Treasury Nicholas Brady, which expands in a significant manner the number of individuals who could take advantage of the ...
Qualified pension or other employee benefit where responsibility rests with an employer rather than an insurer. A trust fund plan, where assets are deposited with and invested by a trustee, ...
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Policy similar to that of an individual universal life insurance policy except that the coverage is provided (up to a limit) without the requirement of the submission of evidence of ...
Annuity that can be paid either with a single premium or a series of installments. For example, an annuitant pays a single premium of $100,000 on June 1 of the current year and is scheduled ...
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