As an average insurance policyholder, it can be overwhelming to try and understand absolutely everything about your life, car, health, or home insurance—especially if you are new to insurance in general. This is why many policyholders merely nod their heads and take the insurance agent’s word for it instead of asking questions. If you are looking at an insurance policy’s paperwork or shopping around for quotes, you’ll probably be confused with some of the vocabulary because not every agency will take the time to explain these terms to you.
The insurance industry has its own unique jargon and few understand what all the terms actually mean. Read ahead for a little explanation of some confusing terms that agents tend to throw around, so that when it is discussed you can truly nod your head in agreement, or better yet—ask some questions.
Incontestability: A provision that enforces a strict time limit of up to a maximum of two years (three years in some states) on a life insurer’s ability to not pay out a claim due to either the policyholder’s suicide or a misrepresentation on his or her application.
Indexed Life Insurance: A type of whole life insurance that provides for the policy’s face amount and premium rate to rise each year in accordance to increases in the Consumer Price Index (CPI). Read More