Click on a term to see its definition: V

Lost in the terminology insurance companies use? Our quick-reference insurance glossary provides easy-to-understand definitions and examples of the terms insurance professionals use.

Valued Policies

Valued Policies are policies, which pay their benefits or the claims based on the face value specified in the policy, instead of the property's actual value. Claims payments are not in any way related to the extent of the damage or loss incurred.

This is more for life insurance policies, but valued policies can still be bought for vehicles, homes and other properties. An independent appraiser is hired to determine the fair value of the property being insured.

The premiums of a valued policy will depend on the face amount, the kind of risk being insured, and may also consider the geographic location of the property.


Vandalism refers to the act of destroying or spoiling the property and assets belonging to the public or to another person.

It is a willful and malicious act is also considered criminal. This may include painting graffiti on a wall and the random act of damaging an object (i.e. breaking the windshield of a car, or defacing a building's facade).

Vandalism also includes the interruption, obstruction or interference with the lawful use, operation or enjoyment of a property, as well as rendering the property useless or dangerous.

Insurance policies may also be issued to cover against loss due to acts of vandalism.

Variable Annuity

A Variable Annuity is an annuity where the income payments or the contract value is based on how well the selected investment instrument performs. These investment instruments include bonds, stocks and securities that are selected by the contract owner. With excellent investment management, the value of the annuity has the potential to increase with time and can provide a very attractive rate of return for the owner of the annuity.

Variable annuities enable the annuity owner the benefit of tax-deferred growth of its investment earnings, as well as a death benefit that the beneficiary will receive. The death benefit may be a minimum guaranteed amount, or the current value of the annuity, whichever is greater.

There is also an option for the annuity owner to get the income payments for a specified length of time, or to tie it to his lifetime or the lifetime of the spouse.

Variable Life Insurance

Variable Life Insurance is a permanent life insurance policy that provides life insurance protection, as well as a savings component where the earnings are tied to the performance of the different investment instruments (usually composed of bonds, mutual funds and stocks).

The policy owner may choose to allocate the cash value among a wide range of opportunity and risk. These returns are not guaranteed, but it provides the opportunity for the policyowner to increase the value of the account.

The cash value is allowed to build up by getting the remaining balance after the life insurance cost and other fees are deducted.

Variable Premium Life Insurance Policy

A Variable Premium Life Insurance Policy is a nonparticipating whole life policy where the premiums vary from time to time. The policy states two premium rates - a maximum premium rate, as well as a lower rate.

At the start of the policy, the rates charged are the lower premium rate. This rate is guaranteed for a minimum time period. Then, the premium rates can change, based on the actual interest, loss experience and mortality cost. The new rates may either be lower or higher than the premium rate.

The premiums may change from time to time, depending on the said factors, but the premium rates will never be higher than the maximum premium rate that is declared in the policy.

Variable Universal Life Insurance

Variable Universal Life (VUL) Insurance is a type of permanent life insurance, which combines the characteristics of a variable life insurance with that of the universal life insurance. It follows the variable life insurance in that it gives the owner the flexibility to choose the investment instruments where the policy's cash value will be invested. Meanwhile, it allows the policyowner with flexibility as to how much premium (within limits) he is to pay.

With this, the cash value and the death benefit provided by the policy will vary according to the premiums paid by the policyowner, as well as the performance of the investment instruments selected.

Viatical Settlement Companies

Viatical Settlement Companies are insurance companies that buy existing life insurance policies, commonly at a discount.

Policyowners who are direly in need of funds (because they are ill and are undergoing treatments or medication) may sell their policy at a discount. The viatical settlement company becomes the policyowners - it continues the premium payments, even as it provides an early payout to the original policyholder. And, upon the death of the person insured by the policy, it will receive the death benefits.

Viatical settlements are often the choice, not just of terminally ill but also of those who only have a life expectation of two years or less. The settlements provided are not levied with federal taxes.


Void refers to the status of the policy contract when it is nullified for some reason.

The insurance company may cancel the policy due to the policy owner's misstatement or misrepresentation of facts, facts that would have had an effect on the policy and its issuance, had the insurance company known about it. And since the policy is void, the insurance company may also deny all claims related to it.

For instance, if an insurance company who issued an auto insurance policy may deny a claim when it finds that the insured is driving without a license or driving a car that does not belong to the proper insurance band.

The insurance company may also void a policy if it finds out that the insured person hid the fact that he has a preexisting condition, a sickness that may cause the policy to be rated.

The insurance company has a contestability period - it is allowed to void a policy within that period.


Volatility refers to the measure of how a stock fluctuates over time. This includes the price upswings and downswings.

For stock volatility, it refers to the possibility that a stock will drastically increase or decrease its value. Investors will evaluate the volatility of a stock and will decide whether they can profit from it. This is where the notion "buy low, sell high" can come in. This is one of the important considerations investors have when deciding to sell the stock they currently holds, or buy additional stock or to buy a new stock offering.

Volatility is affected by the stability of the stock's underlying assets, market conditions, as well as the perception of the public.

Volcano Coverage

Volcano Coverage refers to the protection provided to homeowners and business owners for losses due to damage caused by the eruption of a volcano.

The coverage includes direct and sudden damage of the house or vehicle due to airborne shockwaves, a volcanic blast, lava flow, ash and dust. It also pays when the property is damaged because of an explosion or fire that resulted from the volcanic eruption. The insurance policy may also pay when an insured vehicle gets involved with an accident during or after the volcanic eruption.

Most volcano coverage policies do no cover damage due to mudflow and earth movements (such as landslide or earthquakes).


Volume (or trading volume) refers to the amount of shares that a stock trades in a given period of time, either within a week or day.

Trading volume is usually measured daily, to keep track of its performance, but sometimes, it is also tracked for longer timelines, such as a month or a week. It is important for financial analysts and investors to track stock performance, as a large upswing or downswing can point to a shift in the price of the stock.

The most common times when a significant change in volume is seen are when the quarterly earnings statements are released for the company selling the stock.

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