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Investments glossary

Underinsurance

Underinsurance refers to inadequate insurance coverage held by a policyholder. In the event of a claim, underinsurance may result in economic losses for the policyholder. If a policy is insufficient, the claim would exceed the maximum amount that can be paid out by the insurance policy. While underinsurance may result in lower premiums paid by the policyholder, the loss arising from a claim may far exceed any marginal savings in insurance premiums.

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