Put Option

Published: | Updated: May 31, 2016

Definition - What does Put Option mean?

A put option is a contract that allows an investor to sell a particular security, or other investment at a particular price for a specific amount of time. In the context of insurance, put options exist for life insurance policies. Such put options allow life insurance policyholders the option to sell their policies for a specified price for a certain period of time.

Insuranceopedia explains Put Option

The reason why put options are appealing to many investors and life insurance policyholders is because they can offset the risk of market volatility. In other words, if the stock market goes down and a life insurance policy is suddenly worth significantly less, a put option on a life insurance policy would still allow the policyholder to seek the policy for the pre-agreed amount. Put options for life insurance policies essentially act as insurance for the policies themselves.

How Well Do You Know Your Life Insurance?

The more you know about life insurance, the better prepared you are to find the best coverage for you.

Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.

Share this:

Connect with us

Email Newsletter

Join thousands receiving the latest content and insights on the insurance industry.