Dictionary of Financial Terms -
- Health Insurance
- Insurance against financial losses resulting from sickness or
accidental bodily injury. Included under this definition are accident insurance, disability insurance and accidental
death and dismemberment insurance. Private Medical Insurance (to provide for the cost of private - ie not within the
National Health Service - medical treatment also comes under this general heading).
- A strategy used to offset investment risk. Usually makes use of
futures or options.
- Higher Rate Tax
- Under U.K. income tax regulations, bands of personal income are
taxed at different rates. The highest rate of income tax is currently set at 40% and for 1999/2000 it is payable on
taxable earnings above £28,000.
- Hire Purchase (HP)
- A method of buying goods in which the purchaser takes possession of
them as soon as he has paid an initial instalment of the price (a deposit) and obtains ownership of the goods when he
has paid all the agreed number of subsequent instalments.
A hire-purchase agreement differs from a credit-sale
agreement and sale by instalments (or a deferred payment agreement) because in these transactions ownership passes when
the contract is signed. It also differs from a contract of hire, because in this case ownership never passes.
Hire-purchase agreements were formerly controlled by government regulations stipulating the minimum deposit and the
length of the repayment period. These controls were removed in 1982.
Hire-purchase agreements were also
formerly controlled by the Hire Purchase Act (1965), but most are now regulated by the Consumer Credit Act (1974). In
this Act a hire-purchase agreement is regarded as one in which goods are bailed in return for periodical payments by
the bailee; ownership passes to the bailee if he complies with the terms of the agreement and exercises his option to
purchase. A hire-purchase agreement often involves a finance company as a third party. The seller of the goods sells
them outright to the finance company, which enters into a hire-purchase agreement with the hirer.
- Home Income Plan
- Home income plans allow elderly homeowners to use the equity tied
up in their home to purchase an income and thus increase their standard of living. Homeowners can release this capital
without having to sell their home.
With a reversion plan, the home is sold to an insurance company
that then pays a regular income to the owner. On the death of the owner, the house becomes the property of the
With an annuity plan, the proceeds of a new mortgage on the
property are used to purchase a regular income via an annuity. On the death of the homeowner, the mortgage debt must be
- Home Service Insurance
- See: Industrial insurance
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