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Capital Sum

The maximum amount payable in one sum in event of Accidental Dismemberment. On an AD&D policy, the Principal sum is the amount payable for Accidental Death. The Capital Sum is generally 50% of the Principal Sum.


The process of estimating the present value of an income-producing piece of property by dividing anticipated future income by a capitalization rate.

Capitalization Rate

The rate of return a property will generate on an owners investment.

Cash Dividend Option

A dividend option under which the policyholder receives the dividends in cash. Not subject to tax. Mutual insurers issue “participating” policies, which might pay dividends, but they are not guaranteed.

Cash Flow

The net income produced by an investment property, calculated by deducting operating and fixed expenses from gross income.

Cash-out Refinance

A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.

Cash Surrender Value

The accumulated, guaranteed cash value in a Whole Life or Endowment policy at any given point in time. Most contracts do not develop a cash value until after the 3rd year. On Whole Life, the cash value will equal the face amount of the policy at age 100. Synonymous with Cash Value.

Casualty Insurance

A type of policy that protect a property owner or other person from loss or injury sustained as a result of theft, vandalism or similar occurrences.

Casualty Insurance

A type of insurance that is primarily concerned with losses caused by injury to persons and legal liability imposed upon the insured for such injury or damage to property of others.

Caveat Emptor

A phrase meaning “Let the Buyer Beware”.