Kicker Clause
An additional provision in an insurance policy that provides extra benefits, coverage enhancements, or favorable terms beyond the standard policy language. It typically activates under specific circumstances to provide additional value to the policyholder.
Example
“The disability insurance policy included a kicker clause that increased benefits by 3% annually to keep pace with inflation.”
Memory Tip
Think of a 'kicker' in football - it gives you those extra points beyond the basic score, just like a kicker clause gives extra benefits beyond basic coverage.
Why It Matters
Kicker clauses can significantly enhance the value of insurance policies by providing additional protections or benefits that may not be available elsewhere. They can make the difference between adequate coverage and comprehensive protection during critical life events.
Common Misconception
Some people think kicker clauses are automatically included in all policies or that they're just marketing gimmicks with no real value. In reality, these clauses often require additional premiums and provide genuine additional benefits that can be financially significant.
In Practice
A life insurance policy with a $250,000 death benefit includes a kicker clause providing an additional $250,000 if death occurs in an accident before age 65. When the 45-year-old policyholder dies in a car accident, beneficiaries receive $500,000 instead of the base $250,000. The kicker clause cost an extra $15 monthly but provided an additional $250,000 benefit, delivering tremendous value for the modest additional premium.
Etymology
From 'kicker,' American slang meaning an unexpected extra benefit or surprise element, combined with 'clause' from Latin 'clausula' meaning a closing or concluding phrase.
Common Misspellings
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Related Terms
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See Also
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