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GLOSSARY
Point
Point is short for percentage point. In bonds, the term is used in reference to changes in interest rates; a rate that changes from 8 percent to 9 percent is said to have moved up 1 point. In real estate lending, a point is an upfront fee equal to 1 percent of the loan amount. Point can also refer to value changes in stocks and stock indices, even though these aren't percentage figures. For example, if the Dow Jones Industrial Average rises from 12,200 to 12,325, it is said to have increased 125 points.
Point-of-sale
Point-of-sale is the location, physical or virtual, where sales are made. In a retail store, the point-of-sale is the cash register area where consumers pay for goods. For an Internet retailer, the point-of-sale is the interface that accepts the consumer's payment information.
Point-of-service plan
Point-of-service plan, also called POS, is a type of healthcare coverage that allows insureds to choose in-plan care (like an HMO) or out-of-plan care (like a PPO). Insureds can save on out-of-pocket costs by using in-plan care providers, but they still have the option to choose the provider they want to see.
Points
One point equals one percent of a mortgage. There are origination points and discount points. Origination points help cover the loan expenses for the lender and discount points help borrowers by reducing interest rates.
Points (time share)
Point-of-service plan, also called POS, is a type of healthcare coverage that allows insureds to choose in-plan care (like an HMO) or out-of-plan care (like a PPO). Insureds can save on out-of-pocket costs by using in-plan care providers, but they still have the option to choose the provider they want to see.
Points-based vacation plans
Points-based vacation plans are time share ownership arrangements, where use rights are given a point value based on length of the stay and size of the unit, etc. Properties form networks so that points can be used at any resort within the network.
Policy (insurance)
Policy (insurance) is the documentation that explains the rights and obligations of an insured and insurance provider. Specifically, the policy will state coverages, exclusions, and premiums.
Policy loan
A policy loan is a debt secured by the cash value of a life insurance policy. If the borrower doesn't pay back the debt, the policy death benefit can be reduced by the unpaid amount.
Pool factor
Pool factor is a reported figure that represents the percentage of principal still outstanding in a mortgage-backed security issued by either Freddie Mac, Fannie Mae, or Ginnie Mae. As principal payments are received on the underlying mortgages, they're passed through to investors. At any given time, the pool factor represents the mortgage principal that hasn't yet been repaid.
Pooled income fund
Pooled income fund is a mutual fund that invests financial gifts and distributes the income to fund participants and beneficiaries. The participants are the donors and the beneficiaries are the gift recipients. A pooled income fund provides tax advantages to the participant in the year the fund is created. The fund is structured to make income payments to the participant until death. After the participant's death, ownership of the assets are transferred to the beneficiary.
Pop-up option
Pop-up option is an optional feature on a pension plan that allows the retiree to continue receiving the full pension amount if the spouse dies before the retiree. Without the pop-up option, the retiree would receive a lesser, "survivor" amount once the spouse passes.
Portability
Portability is the quality of being movable; in reference to employee benefit plans, portability is the ability of benefit plans to stay with the employee through a job change. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, for example, allows employees to stay on their former employer's health plan for up to 18 months.
Portfolio lender
A portfolio lender is a financial institution that makes loans and keeps them in-house until they're paid off, rather than selling them to investors on the secondary market. The portfolio lender typically offers deposit services as well, and uses the deposits as a source of liquidity. Profits are generated by charging more on loans than paying out on deposits.
Portfolio runoff
Portfolio runoff is the reduction of outstanding mortgage principal (due to prepayments) within a mortgage-back security (MBS) portfolio. If interest rates change significantly, homeowners are inclined to refinance at the lower market rates. When they do, the MBS portfolio and its expected income over time are both reduced.
POS
POS, or point-of-sale, is the location where retail sales are transacted. In a retail location, this is the area near the cash registers. In an Internet store, the POS is the interface that accepts the consumer's payment information.