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Question: 1 / 400

What does "waiver" mean in the context of insurance?

A mandatory fee for policyholders

A clause that increases coverage limits

A voluntary relinquishment of a known right

In the context of insurance, "waiver" refers to a voluntary relinquishment of a known right. This means that an individual or entity intentionally chooses to give up certain benefits or privileges that they would otherwise be entitled to under the terms of an insurance policy. For instance, an insured party may waive their right to receive certain coverages or benefits in exchange for a lower premium or as part of a settlement negotiation. Recognizing a waiver is crucial, as it signifies the insured's conscious choice to proceed without specific protections that the policy would ordinarily afford. Understanding this concept is vital for both insurance professionals and policyholders, as it can significantly impact claims and coverage decisions.

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A type of insurance coverage

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