When shopping for insurance it is important to understand the definitions and terminology associated with the industry. Click Here to learn more.
Beneficiary
The person(s) named in the policy to receive the life insurance proceeds upon
the death of the insured.
Cash (Surrender) Value
The amount that is available in cash for loans and that may be available for withdrawals
in a whole life insurance, universal life insurance or survivorship life insurance
policy. Accessing Cash Surrender Value may reduce the death benefit and may increase
the risk of lapse.
Contestability, Contestable Clause
In an insurance there is a clause which explains the conditions under
which the insurer may contest or void the life insurance policy. This contestability
is for a limited period of time which in most states is two years. After that
period of time the insurance company can not contest the policy.
Claims Made Coverage
A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. For example, a claim made in the current reporting year could be charged against the current policy even if the injury or loss occurred many years in the past. If the policy has a retroactive date, an occurrence prior to that date is not covered. (Contrast this with 'Occurrence Coverage')
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