When it comes to choosing an insurance policy, it’s easy to get intimidated by all of the complexities, especially when it comes to terminology. But the right insurance expert on your side will know how to explain everything that you need to know. To start, here are the meanings behind three of the most common insurance terms.
One aspect of insurance policies to look out for is the acceleration clause, which lets the insurance company the right to demand full payment on the insurance policy. This only applies in certain situations like falling behind on payments. An acceleration clause is common in car insurance. Many car insurance contracts last six months to a year where you will need to make monthly payments on the premiums. But with an acceleration clause, you will need to be careful not to miss too many payments, or you might be required to pay the rest of your balance all at once.
A binder is used as a proof of coverage while a full insurance policy is pending. Essentially, it functions as a temporary contract. Because of this, a binder is very useful for transitioning into a new insurance policy, because you will technically have a safety net while you are going through the sometimes lengthy process of finalizing an insurance contract. An example of where you might see a binder apply is if you have seen at a car dealership where they ask for proof of insurance.
The term convertible is used to describe a particular life insurance policy. This type of life insurance policy starts as a term life insurance policy with the built-in potential to transition into a permanent life insurance policy. The benefit of a convertible is that you can eventually get a full life insurance policy without the requirement of getting a medical exam.
Get in Touch with Wachter Insurance
Whether you need homeowners’ insurance or auto insurance, our team at Wachter Insurance Agency, Inc. is here to help. We offer our clients competitive rates, professional customer service, and a huge range of policies to choose from for your needs. We have been serving Maryland, West Virginia, Virginia, Pennsylvania, and the District of Columbia since 1969, and we would love to help keep your home and family safe every day of the year. For more information, call us at (301) 371-6335 or visit us online. For more blogs like these, follow us on Facebook, Twitter, and Pinterest.