Glossary

A quotation is the value assigned to a financial asset or the calculation of the price of a product or service.

Tax deductions and credits are reductions in taxes which individuals, the self-employed and businesses can claim if they meet certain requirements set by law or by their regional government.

Deducting means subtracting an amount from total income. This amount depends on an individual’s personal and family circumstances, or in the case of companies or the self-employed on their business expenses.

In insurance, deviation is a statistical measure that indicates how much actual results may vary from the expected average value.

Deferral is the postponement of payment of a benefit, annuity or sum insured until a previously agreed future date. 

Investment diversification is a financial strategy which involves spreading capital across various assets, industries or markets to reduce risk.  

A dividend is the distribution of a company’s earnings to its shareholders. It can be paid in cash or in additional shares as a reward for their investment.

A tax exemption is a legal benefit which means a person, company or organisation doesn’t have to pay certain taxes, either in whole or in part, under specific circumstances.

An emergency fund is a sum of money set aside to cover unexpected expenses or emergencies. Its purpose is to provide financial security and protection against unforeseen events, affording peace of mind and stability during times of financial hardship.

A stock market index is a measure used to gauge the rise and fall of a specific group of shares on the stock market.

Inflation is the widespread and sustained increase in the prices of goods and services in an economy over a given period of time. As inflation rises, the purchasing power of money declines, meaning that the same amount of money can buy fewer goods and services.

The Consumer Price Index (CPI) is a measure used to track changes in the overall price level of goods and services in a given country or region over time. This indicator is essential for understanding price trends and their impact on the economy and our daily lives.

Settlement is the process by which a financial obligation is determined, adjusted and completed. In the insurance industry, it refers to the calculation and payment of claims covered by a policy. 

The stock market is a crucial part of the global financial system which plays a key role in the economy. It is a marketplace where financial securities, such as stocks, bonds and other instruments representing ownership or debt in a company, are bought and sold.

Form 303 is the regular Value-Added Tax (VAT) return that self-employed individuals and businesses in Spain are required to file.

Net worth is a financial measure that represents the difference between the assets and liabilities of an individual, company or organisation.

A retirement plan is a financial strategy designed to ensure a comfortable and secure retirement when the time comes to stop working. It involves saving and investing money over your working life to ensure a regular and sufficient income during retirement.

The contract with the insurer setting out all the terms and conditions: what’s covered, what isn’t covered, how much it costs, when payments are made, etc.

An insurance premium is the payment the insured makes to the insurer to get protection against certain risks. 

A life annuity is an insurance policy which guarantees the insured a fixed, regular payment, usually monthly, for the rest of their life.

The Annual Percentage Rate (APR) is crucial for understanding the total cost of a loan and the Annual Equivalent Rate (AER) for the return on a savings product. They provide a single figure for comparing two financial products even if they have very different terms and conditions, helping you to understand them and choose the better one.

The interest rate represents the cost or return generated by the use of money. Put simply, it is the percentage applied to a sum of money to calculate the interest payable or receivable. 

Variable and fixed interest rates are two types of interest rates: the former changes in response to fluctuations in various factors, while the latter stays the same. Choosing one over the other affects either the total cost of the product or the total return on the investment.

Income refers to the monetary streams which a person or organisation receives from various sources. It represents the earnings from a range of economic activities and is essential for personal and business financial planning.