Tag: insurance

Owners’ Equivalent Rent – OER definition explanation

What is Owners’ Equivalent Rent – OER?
The amount of rent that could be paid to substitute a currently owned house for an equivalent rental property. Owners’ equivalent rent (OER) is a dollar amount that is published by the U.S. Bureau of Labor Statistics to measure the change in implicit rent, which is the amount a homeowner would pay to rent or would earn from renting his or her home in a competitive market.

Owners’ equivalent rent is obtained by directly asking sampled homeowners the following question: “”If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?”” It is also referred to as rental equivalence. Read more for examples and further explanation including related video clips and also comments
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Longevity Risk definition explanation

What is Longevity Risk?
The risk to which a pension fund or life insurance company could be exposed as a result of higher-than-expected payout ratios. Longevity risk exists due to the increasing life expectancy trends among policy holders and pensioners, and can result in payout levels that are higher than what a company or fund originally accounts for. The types of plans exposed to the greatest levels of longevity risk are defined-benefit pension plans and annuities, which guarantee lifetime benefits for policy or plan holders. Read more for examples and further explanation including related video clips and also comments
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Co-insurance Effect definition explanation

What is Co-insurance Effect?
A theory on corporate debt that posits that the likelihood of default decreases when two firms’ assets and liabilities are combined through a merger or acquisition compared to the likelihood of default in the individual companies. The co-insurance effect relates to the concept of diversification, as risky debt is spread across the new firm’s operations. Read more for examples and further explanation including related video clips and also comments
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Loan To Value Ratio – LTV Ratio definition explanation

What is Loan To Value Ratio – LTV Ratio?
A lending risk assessment ratio that financial institutions and others lenders examine before approving a mortgage. Typically, assessments with high LTV ratios are generally seen as higher risk and, therefore, if the mortgage is accepted, the loan will generally cost the borrower more to borrow or he or she will need to purchase mortgage insurance.

Calculated as: Read more for examples and further explanation including related video clips and also comments
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Canadian Deposit Insurance Corporation – CDIC definition explanation

What is Canadian Deposit Insurance Corporation – CDIC?
A crown corporation owned by the Canadian government that insures bank deposits up to C$100,000 per personal account held in member Canadian banks in they event that the financial institution fails. The corporation was formed under the Financial Administration Act and Canada Deposit Insurance Corporation Act in 1967. The CDIC is similar to the Federal Deposit Insurance Corporation in the United States. Read more for examples and further explanation including related video clips and also comments
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