Umbrella liability coverage
A type of liability insurance available to individuals and companies protecting them against claims above and beyond the amount covered by their primary policies or for claims not currently covered.
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Underwriter
An investment banker who purchases shares of a company that is going public, then resells them to investors for a higher price. When an underwriter brings shares of a new company to market it is called an initial public offering (IPO). Investment banks can also underwrite secondary offering of existing public companies.
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Unemployment rate
The percentage of people in the work force who aren't working and are looking for jobs. The numbers are compiled monthly by the Labor Department and are adjusted for seasonal variations. The unemployment report is one of the most closely watched of all government reports, because it gives the clearest indication of the direction of the economy. A rising unemployment rate will be seen by analysts and the Federal Reserve as a sign of a weakening economy, which might call for an easing of monetary policy by the Fed. On the other hand, a decline in the unemployment rate shows that the economy is growing, which may spark fears of higher inflation on the part of the Fed, which may raise interest rates as a result. When interest rates rise, the stock and bond markets tend to take a dive.
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Uniform Gifts to Minors Act and Uniform Transfers to Minors Act
Accounts governed by these acts allow a minor child to own property. The account is managed by a custodian until the child reaches the age of maturity. State law determines both the type of account and the age when the child gains control of the assets.
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Uninsured-motorist coverage
The part of an auto-insurance policy that pays your losses in an accident caused by a hit-and-run driver or one who isn't insured.
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Unit investment trust
A fixed portfolio of stocks or bonds with a specific maturity date. Generally sold by brokers.
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Universal life
A form of life insurance that combines the protection of term life insurance with a savings portion, which is invested in a tax-deferred account earning money-market rates of interest. The policy is flexible; that is, as age and income change, a policyholder can increase or decrease premium payments and coverage, or shift a certain portion of premiums into the savings account without additional sales charges or complications.
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Unlimited marital deduction
This allows most married couples to leave everything to each other free of estate taxes when they die.
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Uptick
A sale of a listed security that occurs at a higher price than the previous transaction. SEC rules state that short sales can only be made on upticks or zero plus ticks. Also called a plus tick.
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U.S. savings bonds
U.S. savings bonds are designed and marketed as low cost savings vehicles for college and retirement accounts. Income earned from Series EE and Series HH bonds are exempt from local and state taxation. Series EE Bonds are sold at a 50% discount to their face value and are sold in denominations from $50 to $10,000. The maturity of the issue is 30 years. Series HH bonds are issued at par value in denominations of $500 to $10,000. Series HH bonds earn interest for 20 years and can only be issued and redeemed through Federal Reserve banks. Interest is paid semiannually. An investor can only purchase HH bonds by exchanging Series EE bonds that are at least six months old and that haven't passed final maturity by more than one year. See "Tax-Wise Savings."
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