Definition of Inspection

Inspection

The examination of the house by a building inspector selected by the purchaser.

Inspection Report

This is a telephone interview of the person applying for life insurance conducted by someone from the underwriting department of the insurance company. Some insurance companies only sporadically contact applicants and some contact every applicant. On average the interview lasts between 15 to 30 minutes. The questions asked relate to personal habits (like smoking and alcohol consumption) and finances, including income and net worth, confirmation of employment, duties and the nature of the applicant's business. In addition, there are questions about driving, sports, aviation and currently held insurance. All information obtained is strictly confidential and is submitted solely to the underwriter for review.

Contingency

A condition that must be satisfied before a contract is binding. inspection and obtaining financing are the two most common.

Backout

Work the framing contractor does after the mechanical (heating, plumbing & electrical) subcontractors finish their phase of work at the rough stage prior to insulating to get the home ready for a municipal frame inspection. Generally, the framing contractor repairs anything disturbed by others and completes all framing necessary to pass a Rough Frame inspection.

Walk Through

A final inspection of a home before "closing" to look for and document problems that need to be corrected.

Accrued Income

income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annuAlly or semi-annuAlly and is taxable annuAlly even though the gain is only paid at maturity of your investment.

Canadian Deposit Insurance Corporation

Better known as CDIC, This is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds.

Co-insurance

In medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By This means, the cost of coverage to the insured is reduced.

Dead Peasants Insurance

Also known as "Dead Janitors insurance", This is the practice, where Allowed, in several U.S. states, of numerous well known large American Corporations taking out corporate owned life insurance policies on millions of their regular employees, often without the knowledge or consent of those employees. Corporations profiting from the deaths of their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate death benefits are seldom, even partiAlly passed down to surviving families.

Disability Insurance

insurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. there are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usuAlly 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period.

Errors and Omissions Insurance

insurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker.

Group Life Insurance

This is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of This insurance is usuAlly one year renewable term insurance. The cost of This coverage is based on the average age of everyone in the group. therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
some people rely on This kind of insurance as their primary coverage forgetting that group life insurance is a condition of employment with their employer. The coverage is not portable and cannot be taken with you if you change jobs. If you have a change in health, you may not qualify for new coverage at your new place of employment.
Bank mortgage insurance is also usuAlly group insurance and you can tell This by virtue of the fact that you only receive a certificate of insurance, and not a complete policy. The only form in which bank mortgage insurance is sold is reducing term insurance, matching the declining mortgage balance. The only beneficiary that can be chosen for This kind of insurance is the bank. In both cases, employee benefit plan group insurance and bank mortgage insurance, the coverage is not guaranteed. This means that coverage can be cancelled by the insurance company underwriting that particular plan, if they are experiencing excessive claims.

Income Splitting

This is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs.

Level Premium Life Insurance

This is a type of insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than actual cost of protection in the earlier years of the policy and less than the actual cost of protection in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years.

Life Expectancy

The average number of years of life remaining for a group of people of a given age and gender according to a particular mortality table.

Life Income Fund

Commonly known as a LIF, This is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80.

Medical Information Bureau

This organization was established in 1902. The Medical information Bureau (M.I.B.) is a non-profit association of life insurance companies. Its purpose is to detect and deter fraud by providing warnings cAlled, alerts, to member companies. For example, if an insurance applicant advised one insurance company of a heart attack and then applied to another insurance company omitting This history, codes, reported by the first insurance company, indicating a heart attack would alert the second insurance company to the undisclosed history. It is a rarity, however, that the alert is the only notice of a specific medical impairement as most applicants completely disclose their history.

Mortgage Insurance

Commonly sold in the form of reducing term life insurance by lending institutions, This is life insurance with a death benefit reducing to zero over a specific period of time, usuAlly 20 to 25 years. In most instances, the cost of coverage remains level, while the death benefit continues to decline. Re-stated, the cost of This kind of insurance is actuAlly increasing since less death benefit is paid as the outstanding mortgage balance decreases while the cost remains the same. Lending institutions are the most popular sources for This kind of coverage because it is usuAlly sold during the purchase of a new mortgage. The untrained institution mortgage sales person often gives the impression that This is the only place mortgage insurance can be purchased but it is more efficiently purchased at a lower cost and with more flexibility, directly from traditional life insurance companies. No matter where it is purchased, the reducing term insurance death benefit reduces over a set period of years. most consumers are up-sizing their residences, not down-sizing, so it is likely that more coverage is required as years pass, rather than less coverage.
The cost of mortgage lender's insurance group coverage is based on a blended non-smoker/smoker rate, not having any advantage to either male or female. Mortgage lender's group insurance certificate specifies that it [the lender] is the sole beneficiary entitled to receive the death benefit. Mortgage lender's group insurance is not portable and is not guaranteed. GenerAlly speaking, your coverage is void if you do not occupy the house for a period of time, rent the home, fAll into arrears on the mortgage, and there are a few others which vary by institution. If, for example, you sell your home and buy another, your current mortgage insurance coverage ends and you will have to qualify for new coverage when you purchase your next home. Maybe you won't be able to qualify. Not being guaranteed means that it is possible for the lending institution's group insurance carrier to cancel All policy holder's coverages if they are experiencing too many death benefit claims.
Mortgage insurance purchased from a life insurance company, is priced, based on gender, smoking status, health and lifestyle of the purchaser. Once obtained, it is a unilateral contract in your favour, which cannot be cancelled by the insurance company unless you say so or unless you stop paying for it. It pays upon the death of the life insured to any "named beneficiary" you choose, tax free. If, instead of reducing term life insurance, you have purchased enough level or increasing life insurance coverage based on your projection of future need, you can buy as many new homes in the future as you want and you won't have to worry about coverage you might loose by renewing or increasing your mortgage.
It is worth mentioning mortgage creditor protection insurance since it is many times mistakenly referred to simply as mortgage insurance. If a home buyer has a limited amount of down payment towards a substantial home purchase price, he/she may qualify for a high ratio mortgage on a home purchase if a lump sum fee is paid for mortgage creditor protection insurance. The only Canadian mortgage lenders currently known to offer This option through the distribution system of banks and trust companies, are General Electric Capital [GE Capital] and Central Mortgage and Housing Corporation [CMHC]. The lump sum fee is mandatory when the mortgage is more than 75% of the value of the property being purchased. The lump sum fee is usuAlly added onto the mortgage. It's important to realize that the only beneficiary of This type of coverage is the morgage lender, which is the bank or trust company through which the buyer arranged their mortgage. If the buyer for some reason defaults on This kind of high ratio mortgage and the value of the property has dropped since being purchased, the mortgage creditor protection insurance makes certain that the bank or trust company gets paid. However, This is not the end of the story, because whatever the difference is, between the disposition value of the property and whatever sum of unpaid mortgage money is outstanding to either GE Capital or CMHC will be the subject of collection procedures against the defaulting home buyer. therefore, one should conclude that This kind of insurance offers protection only to the bank or trust company and absolutely no protection to the home buyer.

Registered Retirement Income Fund (Canada)

Commonly referred to as a RRIF, This is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.

Split Dollar Life Insurance

The split dollar concept is usuAlly associated with cash value life insurance where there is a death benefit and an accumulation of cash value. The basic premise is the sharing of the costs and benefits of a life insurance policy by two or more parties. UsuAlly one party owns and pays for the insurance protection and the other owns and pays for the cash accumulation. there is no single way to structure a split dollar arrangement. The possible structures are limited only by the imagination of the parties involved.

Temporary Life Insurance

Temporary insurance coverage is available at time of application for a life insurance policy if certain conditions are met. NormAlly, temporary coverage relates to free coverage while the insurance company which is underwriting the risk, goes through the process of deciding whether or not they will grant a contract of coverage. The qualifications for temporary coverage vary from insurance company to insurance company but generAlly applicants will qualify if they are between the ages of 18 and 65, have no knowledge or suspicions of ill health, have not been absent from work for more than 7 days within the prior 6 months because of sickness or injury and total coverage applied for from All sources does not exceed $500,000. NormAlly a cheque covering a minimum of one months premium is required to complete the conditions for This kind of coverage. The insurance company applies This deposit towards the cost of a policy at its issue date, which may be several weeks in the future.

Term Life Insurance

A plan of insurance which covers the insured for only a certain period of time and not necessarily for his or her entire life. The policy pays a death benefit only if the insured dies during the term.

Underwriter

This could be the person (broker or agent) who helps you choose the proper type of life insurance or disability insurance and the insurance company for your particular needs. This could also be the person at the insurance company's head office who reviews your application for coverage to determine whether or not the insurance company will issue a policy to you.

Yearly Renewable Term Insurance

sometimes, simply cAlled YRT, This is a form of term life insurance that may be renewed annuAlly without evidence of insurability to a stated age.

Accidental Dismemberment: (Credit Insurance)

Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.

Amortization (Credit Insurance)

Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.

Applicant

The party applying for an insurance policy.

Beneficiary (Credit Insurance)

The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor.

Borrower (Credit Insurance)

A consumer who borrows money from a lender.

Canadian Life and Health Insurance Association (CLHIA)

An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada.

Child Insurance Rider (CIR)

insurance or insurability provided on current or future children of insured.

Commercial Business Loan (Credit Insurance)

An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.

Cost of Insurance

The cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual.

Creditor (Credit Insurance)

A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.

Critical Illness Insurance

Coverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. there are no restrictions on how you use your benefit.

Critical Illness Insurance (Credit Insurance)

Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing.

Debt (Credit Insurance)

Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured.

Disability Insurance (Credit Insurance)

Group insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.

Equity-based insurance

life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.

Individual Insurance

insurance that is offered to individuals rather than groups.

Insurance Act

In Canada, a general statute that contains most of the insurance law of a common law province, and regulates the conduct of insurers and insurance agents within the province.

Insurance Policy (Credit Insurance)

A policy under which the insurance company promises to pay a benefit of the person who is insured.

Job Loss Insurance (Credit Insurance)

Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing.

Joint Policy Life

One insurance policy that covers two lives, and generAlly provides for payment at the time of the first insured's death. It could also be structured to pay on second death basis for estate planning purposes.

Lease (Credit Insurance)

contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee.

Lender (Credit Insurance)

Individual or firm that extends money to a borrower with the expectation of being repaid, usuAlly with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers.

Life Insurance

insurance that provides protection against an economic loss caused by death of the person insured.

Life Insurance (Credit Insurance)

Group Term life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid.

Life Insured

The person who's life is protected by an individual policy.

Life Underwriter

insurance Agent.

Mortgage Life insurance (Credit Insurance)

Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage.

Mortgage (Credit Insurance)

An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for purposes of purchasing a loan secured by a home.

Paid-Up Additions

A type of insurance policy or annuity in which the owner receives dividends, typicAlly increases the death.

Personal Line of credit (Credit Insurance)

A bank's commitment to make loans to a borrower up to a specified maximum during a specific period, usuAlly one year.

Pre-existing medical condition (Credit Insurance)

A medical condition that existed before you became insured. most policies exclude benefits if the condition is related to the event that triggers a claim if occurs within a certain period (6-12 months) after you became insured.

Premium (Credit Insurance)

Annual or monthly amounts payable, by a client, for a selected insurance coverage to insure debt obligations to their creditors are protected.

Refinancing (Credit Insurance)

Extending the maturity date or increasing the amount of existing debt or both. Also, revising a payment schedule, usuAlly to reduce the monthly payments and often to modify interest charges.

Reinsurance

Process in which the risk of potential loss is shared between two or more insurers.

Strike Insurance (Credit Insurance)

Coverage that can pay down your debt should you become unemployed due to a legal strike in your place of work. The payment is made to your creditors to reduce your debt owing.

Term Life

A product that provides life coverage for a specified duration typicAlly not beyond the age of 75.

Terminal Illness Insurance (Credit Insurance)

Coverage that provides a lump-sum payment should you become terminAlly ill. The payment is made to your creditors to pay off your debt owing.

Underwriter

person that uses various types of evidence to evaluate the insurability of a client.

Underwriting

Evaluating and classifying potential risk of a client.

Universal Life

An unbundled life product with a separate investment component. It typicAlly does not participate in companies profits.

Waiting Period (Credit Insurance)

A specific time that must pass following the onset of a covered disability before any benefits will be paid under a creditor disability policy. (Also known as an elimination period).

Whole Life

Component that provides life coverage during the insured's life.

CMHC or GEMICO Insurance Premium

Mortgage insurance insures the lender against loss in case of default by the borrower. Mortgage insurance is provided to the lender by CMHC or GEMICO and the premium is paid by the borrower.

Conditional Offer

An offer to purchase subject to conditions. These conditions may relate to financing, or the sale of an existing home. UsuAlly a time limit in which the specified conditions must be satisfied is stipulated.

Fire Insurance

before a mortgage can be advanced, the purchaser must have arranged fire insurance. A certificate or binder from the insurance company may be required on closing.

Gross Household Income

Gross household income is the total salary, wages, commissions and other assured income, before deductions, by All household members who are co-applicants for the mortgage.

Interim Financing

Short-term financing to help a buyer bridge the gap between the closing date on the purchase of a new home and the closing date on the sale of the current home.

Mortgage Critical Illness Insurance

Mortgage Critical Illness insurance is available as an enhancement to Mortgage life insurance. It is usuAlly underwritten by the Assurance company. Complete details of benefits, exclusions and limitations are contained in the Certificate of insurance. It is recommended for All mortgagors. It can pay off your mortgage -- up predefined limit -- if you are diagnosed with life-threatening cancer, heart attack or stroke.

Mortgage Life Insurance

A form of reducing term insurance recommended for All mortgagors. If you die, have a terminal illness, or suffer an accident, the insurance can pay the balance owing on the mortgage. The intent is to protect survivors from the loss of their homes.

Refinancing

Renegotiating your existing mortgage agreement. May include increasing the principal or paying out the mortgage in full.

Private Mortgage Insurance (PMI)

insurance that protects mortgage lenders against default on loans by providing a way for mortgage companies to recoup the costs of foreclosure. PMI is usuAlly required if the down payment is less than 20 percent of the sale price. Home buyers pay for the coverage in monthly instAllments. PMI should be terminated when the home buyer has built up 20 percent equity in the property.

Title insurance

insurance that protects against loss from disputes over ownership of a property. A policy may protect the mortgage lender, the home buyer, or both.

Townhouse

One of a row of houses connected with common side wAlls.

Allowance

A sum of money set aside in the construction contract for items which have not been selected and specified in the construction contract. For example, selection of tile as a flooring may require an Allowance for an underlayment material, or an electrical Allowance which sets aside an amount of money to be spent on electrical fixtures.

Area Walls

Corrugated metal or concrete barrier wAlls instAlled around a basement window to hold back the earth.

Ballast

A transformer that steps up the voltage in a florescent lamp.

Balloon

A loan that has a series of monthly payments with the remaining balance due in a large lump sum payment at the end.

Balloon Framed Wall

Framed wAlls (generAlly over 10' tAll) that run the entire vertical length from the floor sill plate to the roof. This is done to eliminate the need for a gable end truss.

Builder's Risk Insurance

insurance coverage on a construction project during construction, including extended coverage that may be added for the contract for the customer's protections.

Building Code

A comprehensive set of laws that controls the construction or remodeling of a home or other structure.

Bull Nose Drywall

Rounded drywAll corners.

Central Air Conditioning

A system which uses ducts to distribute cooling and/or dehumidified air to more than one room or uses pipes to distribute chilled water to heat exchangers in more than one room, and which is not plugged into an electrical convenience outlet.

Ductwork

A system of large tubes, pipes or channels (ducts) designed to deliver air to and from a furnace or other air-handling unit.

Gable End Wall

The triangular end of an exterior wAll above the eaves formed under a gable roof.

aterial used to cover the interior framed areas of walls and ceilings

Knee Wall

A wAll-like structure that supports roof rafters.

Load-Bearing Wall

Includes All exterior wAlls and any interior wAll that is aligned above a support beam or girder. NormAlly, any wAll that has a double horizontal top plate.

Nonbearing Wall

A wAll supporting no load other than its own weight.

Palladian Window

One larger window with a circle top window above and usuAlly has two smAller, rectangular windows on each side.

Roof Valley

The "V" created where two sloping roofs meet.

Trombe Wall

A passive solar wAll, usuAlly masonry or concrete, used for passing heat from one room (like a sun room or solar garden room) to another.

Wall Out

When a painter spray paints the interior of a home.

Related to : home, mortgage, insurance, homebuyer, real estate, property, buy home, home insurance, financing, home financing, home buyer, first time homebuyer, homes, homebuying, credit, condo.