In insurance terminology, what does testamentary refer to?

In insurance terminology, "testamentary" specifically refers to matters relating to a will or testament, particularly those that come into effect upon the death of an individual. Therefore, payments or distributions that are classified as testamentary are made when the holder is deceased. This concept is typically associated with the distribution of assets or insurance benefits after someone's death, which is central to many life insurance policies and estate planning scenarios.

Understanding this term is crucial in the context of life insurance and estate management, as it ties directly to how benefits are organized and administered after an insured individual's passing. The other choices, while relevant to various aspects of financial transactions, do not capture the essence of testamentary payments that are specifically executed after death.