What is a retention in an insurance claim?
When you file a claim with your insurance company, the deductible is the amount of money you have to pay out of pocket. Once you've reached your deductible, your insurance kicks in and pays the rest of the bill as per the terms of your policy. A retention is essentially the same thing.
How does retention affect the price of life insurance?
Increasing the amount of your retention makes your insurance premium go down. The more money you pay, the less your insurance will have to. This break is passed on to you in the form of lower premiums. The overall price of insurance goes down under this system, as well.
What is an application of retention?
An application of retention is a contractual clause included in many insurance policies. The purpose of the clause is to specify what portion of any potential damages will need to be paid for by the policyholder. Damages in excess of this retained portion would then be covered by the insurance policy. Is a retention the same as a deductible?