A to Z of financial terms

See Payment Protection Insurance (PPI).

Financial advice can be either independent or restricted. Independent advice must be unbiased, unrestricted and based on a comprehensive and fair analysis of the market. Advisers must be able to consider all retail investment products, and should be free to recommend the products that are best for their customers (see also restricted advice). Learn more about financial advice on MoneyHelper.

The term ICO refers to a digital way of raising funds from the public using a virtual currency, also known as cryptocurrency. An ICO can also be known as ‘token sale’ or ‘coin sale’.

An insolvency practitioner is someone who acts on behalf of a failed firm. They’re often known as ‘administrators’.

Investment-related insurance describes a contract where the amount you get back when the policy ends (or matures) will depend on the value or performance of the investments in which your premiums are invested or linked. Examples of investment-related insurance include some life insurance contracts, such as endowments and some whole of life assurance contracts. (See also non-investment insurance.)

Non-investment insurance describes a contract where you pay a premium to an insurer so that if you make a claim when an insured event happens, and the terms of the contract have been met, a certain amount is paid to you. Examples of non-investment insurance include travel insurance, home insurance, car insurance and some life insurance contracts, such as term life assurance and critical illness, which pay out a lump sum. (See also investment-related insurance.)

If you buy or own a product like a mobile phone or home appliance, you might consider insuring it in case it gets damaged or lost. This insurance should cover you for the repair or replacement of the product. Some scammers take payments from customers but don’t arrange the insurance as agreed, leaving you with little or no protection. Other scammers contact people to sell, promote or advise on insurance without our authorisation. Read more how to protect yourself from scams.

Banks sold some types of derivatives on the basis that they would protect small businesses' bank loans from changes in interest rates. These derivates were known as ‘interest rate hedging products‘ (IRHPs). They included stand-alone collar, swap, and cap derivatives. Read more about IRHP. 

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