Financial Malaprops: misused & confused words

Former_MSE_Lee

Financial Malaprops: misused & confused words

Remember Allo Allo's Officer Crabtree, "Good moaning, I represent the British Air Farce." With him malapropisms (misused and confused words) were comedy, with financial services terms it can be tragedy.

So do you want a secured loan or an unsecured loan? Life assurance or insurance? No notice or instant access savings?

If there are any other terms that leave you befuddled let us know by hitting reply.

Here's the list we put in this week's email to get you started

• "Secured" and "Unsecured" loans
  
  While secured sounds better, it's not! Your lender gets security not you, as it's secured on your home so if you can't repay it can take your house. Where possible always go for unsecured (see Cheapest Loans for more).

• "No Notice" and "Instant Access" Savings
  
  Both are easy-access savings types, but with instant access you can get cash on demand, ie. withdraw from ATMs or branches there & then. With No-Notice you needn't warn of withdrawals but they're internet, phone or postal accounts so in practice it takes a few days to get the cash (see Top Savings).

• Credit Card "0% Deals" and "Interest Free Period"
  The appallingly confusing phrase "interest-free period" used on credit card summary boxes doesn't refer to short term 0% spending or balance transfer deals. Instead a 55 day "interest free period" means you've that long after the purchase to clear the card to avoid interest. If it says no "interest-free period", you're charged even if you repay in full (see Balance Transfers)

• "Life Assurance" and "Life Insurance"
  
  You insure against something that may happen, you assure something that will happen... and death is assured. Yet as some policies only pay out if you die within a set time limit, these may be called life insurance (see Cheap Life Insurance guide).

• Megabytes (MB)" and "Megabits (Mbit or Mb)"
  
  Both measure amounts of data. A MB is used for things like memory stick storage capacity (and means just over 1m bytes of information) while Mbits measure data transfer speeds e.g. for broadband. For nerds an Mb is 1/8th the size of a MB, so an 8 Mb per second (Mbps) connection, at top speed would download 1MB of data per sec (see Cheap Broadband).

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p00hsticks

Not me, but a lot of posters don;t seem to understand the difference between SAVING and INVESTING

moonrakerz

Invest ??

ariarnia

MSE_Lee wrote: »

Life assurance or insurance? No notice or instant access savings?

just my ignorance, but life insurance is the company betting you won't die, and life assurance is them assuring you that you haven't yet.

You can tell I've not even thought about those things yet - can't wait till I can afford a mortgage so have to start thinking about them.

isplumm

ariarnia wrote: »

just my ignorance, but life insurance is the company betting you won't die, and life assurance is them assuring you that you haven't yet.

You can tell I've not even thought about those things yet - can't wait till I can afford a mortgage so have to start thinking about them.

Hi ... it is fairly simple - insurance is for living things like people / animals (so you get life insurance / pet insurance) & assurance is for inanimated objects like cars /houses (so you get car assurance / house assurance)

Mark

KeithP

isplumm wrote: »

Hi ... it is fairly simple - insurance is for living things like people / animals (so you get life insurance / pet insurance) & assurance is for inanimated objects like cars /houses (so you get car assurance / house assurance)

Mark

Interesting to note that the first website I looked at it can be seen that Aviva sell Car Insurance, Home Insurance, Life Insurance, Health Insurance and Breakdown Cover*.

So bang goes your theory Isplumm.

I forsee this running a little while.


*cover? Is that assurance or insurance?

pendulum

isplumm wrote: »

Hi ... it is fairly simple - insurance is for living things like people / animals (so you get life insurance / pet insurance) & assurance is for inanimated objects like cars /houses (so you get car assurance / house assurance)

Mark

Your talking absolute rubbish of course, its never been called house assurance or car assurance, what planet are you on. In fact your so wrong I wonder if you were joking but I can't see any evidence of that.

Insurance is for something that might happen (Might crash the car: car insurance)
Assurance is for something that WILL happen (Life assurance: because everyone dies, you can be ASSURED of that)

gagamike

What is the difference between an Investment trust and Unit trust.

Thanks

selimap

While some of the posts are correct in the origins of these terms, you cannot determine the nature of a 'life' policy from whether its called insurance or assurance, nor from which of those terms is used (if at all) in the company's name or advertising.

As always with insurance (or asurance), read the product features and other documentation, check the small print and make sure you understand that the contract meets your specific needs. There really is no short cut, though you can use an adviser if you aren't confident to go it alone.

(I have worked in comapnies serving the insurance industry for many years).

selimap

Rather aginst your intuitive understanding, the Mortgagee is the lender (e.g. bank or building society) and the Morgagor is the borrower (purchasing the property)

tickerhacker

"Protected Rights" in pension schemes. Protected from whom? Protected from being badly invested by high-charging fund managers -- no, that's not it. Protected from being vested by the worker until he is older? Maybe.
Worst is if transferring from an "old-fashioned" and guaranteed final-salary scheme to a money purchase scheme that has no guarantee of size of payout, the part of that fund made up from the employers NICs then becomes "Protected Rights"!