Insurance Glossary - Understanding Common Terms

The Insurance Glossary is divided alphabetically for a quick and handy reference to understand terms used by insurance companies. Select the first letter of the word or term to locate a definition and brief description. For example, if you need help understanding the term "Automobile Liability Insurance" or the word "Premium", simply select either the letter(s) "A" or "P" from the alphabet menu guide below:

Insurance Glossary: Terms that begin with 'v'

Variable Annuity: (1) An annuity contract in which the amount of each periodic income payment may fluctuate. The fluctuation may be related to securities market values, a cost of living index, or some other variable factor. (2) An annuity under which the benefit varies according to the investment results of a life insurance company's separate account (usually invested primarily in common stocks).

Variable Life Insurance: Life insurance under which the benefits relate to the value of assets behind the contract at the time the benefit is paid. The amount of death benefit payable would, under variable life policies that have been proposed, never be less than the initial death benefit payable under the policy.

Verbal Threshold: In no-fault auto insurance states with a verbal threshold, victims are allowed to sue in tort only if their injuries meet certain verbal descriptions of the types of injuries that render one eligible to recover for pain and suffering.

Vest: A provision that a pension participant will, after meeting certain requirements, retain a right to all or part of the accrued benefits, even though the employee may leave the job before retirement.

Vested Commissions: Renewal commissions payable to the writing agent or his estate, whether or not he remains with the company.

Viatical Settlement: Payment of a portion of the proceeds from life insurance to an insured who is terminally ill.

Voluntary Market: The market where one seeking insurance obtains insurance in the open market with no help from the state, through an insurer of his or her own selection.