Insurance Glossary - Understanding Common Terms

Our glossary is divided alphabetically by insurance term in a quick reference guide to assist understanding the language commonly used by insurance companies. Policy documents contain a number of these terms because they typically define the limitations of risk and liability on the insured and any exclusions of coverage.

If you plan to start a new policy or renew your current policy with a different carrier or agency, it is important to review and understand the policy differences behind individual quotes from multiple carriers.  Lower policy premiums may be the result of decreased payout benefits, higher deductibles, or maximum damages allowed.  It is important to identify these unique features in any policy comparison, otherwise a lower price may come at a much higher cost when you have to file a claim for loss or damages in the future.

Select the first letter of the word or term to locate a definition and brief description.  For example, to get help with the terms "Automobile Liability Insurance" or "Premium", select either the letter A or P from the menubar below: 

Insurance Glossary: Terms that Begin with the Letter '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.