Insurance Term Definitions C
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- CASH DIVIDEND OPTION
When the cash dividend option is selected on a whole life policy, the insurer will send the policy owner the amount of the policy dividend by check. - CATASTROPHE
A severe incident that is sudden and unavoidable. It typically causes an enormous amount of loss to a large population. Some examples are earthquakes, floods, and hurricanes. - COINSURANCE
In property insurance, the insurance company requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. - COLLISION COVERAGE
Portion of an auto insurance policy that covers the damage to the policyholder's car resulting from collision with another vehicle or other object. - COMPREHENSIVE COVERAGE (other than collision)
Auto coverage for theft, vandalism, fire and collision with a falling object, and wild or domestic animals. - COMPULSORY AUTO INSURANCE
The minimum amount of auto liability insurance that meets state law. - CONTESTABLE PERIOD
The time during which an insurer has the right to cancel an insurance policy if the application contained a material misrepresentation. - CONTINGENT BENEFICIARY
The person(s) named to receive proceeds in the event the primary beneficiary is no longer living. Also known as secondary beneficiary, tertiary beneficiary, and successor beneficiary. - CONVERTIBLE TERM INSURANCE POLICY
A term life insurance policy that gives the policy owner the right to convert the policy to a permanent form of insurance without medical examination. - COVERAGE
Synonym for insurance.