What Is an Insurance Claim? An insurance claim is a formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event. The insurance company validates the claim (or denies the claim). If it is approved, the insurance company will issue payment to the insured or an
What Is Insurance Derivative? An insurance derivative is a financial instrument that derives its value from an underlying insurance index or the characteristics of an event related to insurance. Insurance derivatives are useful for insurance companies that want to hedge their exposure to catastrophic losses due to exceptional events, such as earthquakes or hurricanes. Understanding
What Is an Insurance Trust (ILIT)? An insurance trust is an irrevocable trust set up with a life insurance policy as the asset, allowing the grantor of the policy to exempt assets away from their taxable estate. Once the life insurance policy is placed in the trust, the insured person no longer owns the policy, which
What is an Insurance Bond? An insurance bond, also known as an investment bond, is an insurance-related investment vehicle used primarily in the United Kingdom and Australia. The insurance bond is an investment instrument offered by life insurance companies in the form of a whole life or term life insurance policy. Insurance bonds best suit investors who use
What Is Insurance Coverage? Insurance coverage is the amount of risk or liability that is covered for an individual or entity by way of insurance services. Insurance coverage, such as auto insurance, life insurance—or more exotic forms, such as hole-in-one insurance—is issued by an insurer in the event of unforeseen occurrences. Key Takeaways Insurance coverage
What Is an Insurance Coverage Area? Insurance coverage area refers to the geographic region in which an insurance policy’s benefits apply. The insurance coverage area for a travel health insurance plan, for example, might be defined as “anywhere in the world.” This definition means that the policyholder can obtain necessary medical treatment anywhere and be
What Is Insurance Defense? Insurance defense is legal representation that specializes in cases relating to insurance. Insurance defense attorneys may work for law firms that offer insurance companies legal help or may work as staff attorneys for the insurance company itself. Key Takeaways Insurance defense is a legal representation of legal matters related to insurance.Attorneys
What Is Insurance Fraud? Insurance fraud is an illegal act on the part of either the buyer or seller of an insurance contract. Insurance fraud from the issuer includes selling policies from non-existent companies, failing to submit premiums, and churning policies to create more commissions. Buyer fraud, meanwhile, can consist of exaggerated claims, falsified medical
What is an Insurance Grace Period? An insurance grace period is a defined amount of time after the premium is due in which a policyholder can make a premium payment without coverage lapsing. The insurance grace period can vary depending on the insurer and policy type. Depending on the insurance policy, the grace period can be
What Is an Insurance Industry ETF? An insurance industry ETF is an exchange-traded fund (ETF) that aims to generate returns equal to an underlying index of insurers. An insurance ETF invests in all types of insurers, including property and casualty insurers, life insurance companies, full line insurers, and insurance brokers. Depending on its mandate, such an ETF may also
