What is a "waiver" in insurance?

In the context of insurance, a "waiver" refers to the voluntary relinquishment of a right. This concept is often encountered in various aspects of insurance contracts. For example, an insured party may waive certain rights or claims they have against the insurer or may choose to forgo specific coverage options. This action is usually documented in writing and demonstrates that the party understands the implications of giving up that right.

Understanding waivers is crucial as they can impact the obligations and rights of both the insurer and the insured. For instance, if an insured waives their right to a particular benefit or coverage, they can no longer claim that benefit in the future. This is especially relevant in claims processing, where policyholders may need to adhere to specific terms that they cannot dispute later if they have waived their right.

The other options do not accurately capture the definition of a waiver in the insurance context and highlight different aspects of insurance management, such as policy termination, premium adjustments, and application processes.