MEC Key Financial Concepts 2

The amount a policyholder pays for an insurance policy.

• Insurance premium

• Insurance claim

• Judgement

• fixed costs

Costs that do not vary based on the units sold.

• variable cost

• cost of good sold

• fixed cost

• contribution margin

A credit-worthy individual or business with sufficient liquidity who guarantees to repay a loan if the debtholder cannot.

• credit-worthy

• guarantor

• policyholder

• bank loan

The merchandise that a company sells to its customers.

• cost of goods sold

• inventory

• payment terms

• selling point

The 12 month period a company uses to report financial results.

• extended payment terms

• mutual fund

• installment payment

• fiscal year

A special account where individuals can deposit retirement funds that can grow tax-deferred until they withdraw it after they retire.

• Individual Retirement Account (IRA)

• line of credit

• insurance policyholder

• inventory

A legal decision requiring a person or company to pay another person or company

• claim

• policyholder

• judgement

• premium

A business that purchases an insurance policy for various types of protection.

• insurance premium

• insurance claim

• insurance policyholder

• installment payment

The amount an insurance policyholder receives from the insurance company to reimburse the policyholder for a covered loss.

• mutual fund

• insurance premium

• insurance policyholder

• insurance claim

Debt owed to someone that is paid in monthly payments.

• extended payment terms

• installment payment

• fiscal year

• debt