SIP
Systematic Investment Plan — a way to invest a fixed amount into a mutual fund at regular intervals, such as monthly. SIP is a method of investing, not a separate type of mutual fund.
PRANAVAM FINANCIAL SERVICES
Financial terms,
in plain English.
A quick glossary for the insurance and investment terms visitors will see across this website.
Important: Definitions are simplified for education. Product documents and applicable rules always take priority.
Lump Sum
A one-time investment instead of investing gradually through multiple instalments.
Mutual Fund
A pooled investment vehicle where investors' money is managed according to a stated investment strategy.
NAV
Net Asset Value — the per-unit value of a mutual fund scheme, calculated according to the fund's assets and liabilities.
AUM
Assets Under Management — the value of assets managed by a mutual fund or investment manager.
Expense Ratio
The annual operating expenses charged by a mutual fund scheme, expressed as a percentage of the fund's assets.
Benchmark
A reference index used to compare a fund's performance and investment approach.
Equity
Investments in shares of companies. Equity can offer long-term growth potential but can also fluctuate significantly.
Debt
Fixed-income investments such as bonds and money-market instruments. Debt funds still carry risks, including interest-rate and credit risk.
Hybrid Fund
A mutual fund category that invests across more than one asset class, commonly equity and debt.
Flexi Cap
An equity mutual-fund category that can invest across large-, mid- and small-cap companies, subject to the scheme mandate.
Large Cap
Companies ranked in the large-cap segment under SEBI's classification framework.
Mid Cap
Companies ranked in the mid-cap segment under SEBI's classification framework.
ELSS
Equity Linked Savings Scheme — an equity mutual-fund category with a statutory three-year lock-in and tax treatment subject to current tax rules.
Lock-in
A period during which an investment cannot normally be redeemed or withdrawn, subject to the product's rules.
Riskometer
A standardised indicator that communicates the level of risk associated with a mutual fund scheme.
XIRR
Extended Internal Rate of Return — a method commonly used to calculate the annualised return of investments made or withdrawn at different dates.
SIP Calculator
A planning calculator that estimates the potential future value of periodic investments using an assumed rate of return. It is an illustration, not a guarantee.
SWP
Systematic Withdrawal Plan — a facility that allows an investor to withdraw a chosen amount from a mutual fund at regular intervals, subject to the scheme rules.
STP
Systematic Transfer Plan — a facility that transfers a chosen amount from one mutual fund scheme to another at regular intervals, subject to the fund house's rules.
Goal-based investing
Choosing investments according to a specific goal, amount needed and time horizon rather than choosing a product first.
Term Insurance
Life insurance designed primarily to provide a death benefit for a specified policy term.
Sum Assured
The amount of insurance cover specified in a life insurance policy, subject to the policy terms.
Premium
The amount paid to keep an insurance policy in force, according to its payment schedule.
Rider
An optional insurance benefit that can be added to a base policy for an additional premium, subject to the product terms.
Annuity
A financial arrangement that can provide a series of payments, commonly used to create retirement income.
Immediate Annuity
An annuity where payments begin according to the selected option after the purchase, subject to the policy terms.
Deferred Annuity
An annuity where the income starts at a later date according to the selected option.
Health Insurance
Insurance that covers eligible medical expenses according to the policy's benefits, limits, exclusions and conditions.
Sum Insured
The maximum amount of cover available under a health insurance policy, subject to its terms and conditions.
Waiting Period
A specified period during which certain illnesses, treatments or conditions may not yet be covered.
Pre-existing Disease (PED)
A disease or medical condition that existed before the policy's commencement, as defined by the policy wording.
Co-pay
The percentage or fixed portion of an admissible claim that the insured must pay, where a co-payment applies.
Deductible
The amount the insured must bear before the insurer's eligible benefit begins under the applicable policy.
Cashless Claim
A claim process where eligible treatment expenses are settled directly between the insurer/TPA and a network hospital, subject to policy terms.
Network Hospital
A hospital that has an arrangement with the insurer/TPA for eligible cashless claim processing.
Restoration
A health-policy feature that reinstates some or all of the sum insured after it has been used, subject to the product's conditions.
Family Floater
A health policy where one shared sum insured can cover multiple eligible family members.
Top-Up
Additional health cover that generally becomes applicable after a specified deductible is crossed for a claim, according to the policy.
Super Top-Up
Additional health cover where the deductible is assessed on aggregate eligible expenses during a policy period, subject to the policy wording.
Claim
A request made to an insurer for payment or benefit under an insurance policy.
Underwriting
The insurer's process of assessing risk and deciding applicable terms, premium and eligibility.