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rule of 72

The formula for approximating the time it will take for a given amount of money to double at a given compound interest rate. The formula is simply 72 divided by the interest rate. In six years, Rs. 1000/- will double at a compound annual rate of 12% (72 divided by 12 equals 6)

risk

The measurable probability of loss or less-than-expected returns from an investment, asset or business activity.

rider

An add-on benefit available at the option of the policyholders that may alter certain features of a policy by increasing or restricting benefits.

return

For savings, the difference between the original sum invested and the final value of income or capital growth, given as a percentage. For shares, the overall investment performance based on the movement in the price of the shares (gain or loss) and the dividend income from the shares.

reinsurance

A form of insurance bought by insurance companies to protect themselves from the risk of large losses. One insurer pays to place part of an insured risk or an entire book of business with one or more other insurance companies, known as the reinsurers.

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