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Glossary
Table of Contents
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 | Immediate Annuity: An annuity providing
for payment to begin immediately.
| Immediate Participation
Guarantee Plan: (IPG) Type of pension plan in which all pension
contributions are deposited in an unallocated fund and used directly to pay
benefits to retirees.
| Imputed Negligence: Case in which
responsibility for damage can be transfered from the negligent party to
another person, such as an employer.
| Incontestability: Life policies provide
that, except for non-payment of premiums and certain other circumstances,
the policy shall be incontestable after the policy has been in force for two
years during the lifetime of the insured.
| Incontestable Clause: An optional
clause which may be used in noncancelable or guaranteed renewable health
insurance contracts providing that the insurer may not contest the validity
of the contract after it has been in force for two (sometimes three) years.
| Incurred Claims: Incurred claims equal the
claims paid during the policy year plus the claim reserves as of the end of
the policy year, minus the corresponding reserves as of the beginning of the
policy year. The difference between the year end and beginning of the year
claim reserves is called the increase in reserves and may be added directly
to the paid claims to produce the incurred claims.
| Incurred-but-not-reported (IBNR)
reserves: liability account on an insurer's balance sheet reflecting
claims that are expected based upon statistical projections but which have
not yet been reported to the insurer
| Indemnification: Compensation to the victim
of a loss, in whole or in part, by payment, repair, or replacement.
| Indemnity: Legal principle that specifies an
insured should not collect more than the actual cash value of a loss but
should be restored to approximately the same financial position as existed
before the loss. Independent Adjustor:
Claims adjustor who offers his or her services to insurance companies and is
compensated by a fee.
| Independent Agent: an independent business
person who usually represents two or more insurance companies in a sales and
service capacity and who is paid on a commission basis.
| Independent Agency System: Type of
property and liability insurance marketing system, sometimes called the
American agency system, in which the agent is an independent businessperson
representing several companies. The agency owns the expirations or renewal
rights to the business, and the agent is copensated by commissions that vary
by line of insurance.
| Indeterminate Premium
Whole Life Insurance: Nonparticipating whole life policy that permits
the insurer to adjust premiums based on anticipated future experience.
Initial premiums are guaranteed for a certain preriod. After the initial
guaranteed period expires, the insurer can increase premiums up to some
maximum limit.
| Indexing: Adjusting of values over time to
reflect the impact of inflation.
| Indirect Loss: See Consequential Loss.
| Individual Contract: A contract of
health insurance made with an individual called the policy holder or the
insured, which normally covers such individual and, in certain instances,
members of his family.
| Individual Deductible: Amount that an
insured and each person of his or her family covered by the policy must pay
before the group or individual medical insurance policy begins to pay for
medical expenses.
| Individual Insurance: Policies which
provide protection to the policyholder and/or his/her family. Sometimes
called Personal Insurance as distinct from group and blanket insurance.
| Individual Policy Pension Trust:
A type of pension plan, frequently used for small groups, administered by
trustees who are authorized to purchase individual level premium policies or
annuity contracts for each member of the plan. The polices usually provide
both life insurance and retirement benefits.
| Individual Retirement
Account (IRA): An account to which an individual can make
save for retirement on a tax-favored basis. Contributions to a
standard IRA are tax deductible for many workers; contributions
to a Roth IRA are made with after-tax dollars but can be withdrawn tax-free
at retirement.
| Industrial Life Insurance: Life
insurance issued in small amounts, usually less than $1,000, with premiums
payable on a weekly or monthly basis. The premiums are generally collected
at the home by an agent of the company. Sometimes referred to as debit
insurance.
| Industrial Life Insurance: A class
of life insurance that is usually issued with protection amount of less than
$1,000 and premiums usually payable weekly or at most, monthly.
| Inflation-Guard Endorsement:
Endorsement added at the insured's request to a homeowners policy to
increase periodically the face amount of insurance of the dwelling and other
policy coverages by a specified percentage.
| Inheritance tax: A tax on the right of an
heir to receive property at the death of another.
| Initial Past Service Liability:
The actuarial value (single sum) of the past service benefits as of the
effective date of the establishment of the plan, or at the date of the
latest liberalization. The maximum annual past service contribution
allowable for tax deduction is the amount necessary to amortize past service
liabilities and other supplementary pension or annuity credits over 10
years. Funding of the past service liability over a period of 30 years (40
in some cases) is required by the Internal Revenue Service under ERISA.
| Initial Reserve: In life insurance, the
reserve at the beginning of any policy year.
| Injury Independent of All
Other Means: An injury resulting from an accident, provided that the
accident was not caused by an illness.
| Inland Marine Insurance: A broad
form of insurance, generally covering articles in transit as well as
bridges, tunnels and other means of transportation and communication.
Besides goods in transit (generally excepting trans-ocean), it includes
numerous "floater" policies, such as those covering personal
effects, personal property, jewelry, furs, fine arts, and other items.
| Inland Marine Insurance: A broad
type of insurance, generally covering articles that may be transported from
one place to another as well as bridges, tunnels and other instrumentalities
of transportation. It includes goods in transit (generally excepting
trans-ocean) as well as numerous "floater" polices such as
personal effects, personal property, jewelry, furs, fine art and others.
| Inspection Report: A report (usually
written) of an investigation of an applicant, conducted by an independent
agency that specializes in insurance investigations. The report covers such
matters as occupation, financial status, health history, and moral problems.
| Insolvent: Having insufficient financial resources
(assets) to meet financial obligations (liabilities).
| Insurability: Acceptability to the company of
an applicant for insurance.
| Insurable Risk: The conditions that make a
risk insurable are (a) the peril insured against must produce a definite
loss not under the control of the insured, (b) there must be a large number
of homogeneous exposures subject to the same perils, (c) the loss must be
calculable and the cost of insuring it must be economically feasible, (d)
the peril must be unlikely to affect all insureds simultaneously, and (e)
the loss produced by a risk must be definite and have a potential to be
financially serious.
| Insurance: A system under which individuals,
businesses, and other organizations or entities, in exchange for payment of
a sum of money (a premium), are guaranteed compensation for losses resulting
from certain perils under specified conditions.
| Insurance: Protection by written contract against
the financial hazards (in whole or in part) of the happenings of specified
fortuitous events.
| Insurance Company: An organization
chartered to operate as an insurer.
| Insurance Company: Any corporation
primarily engaged in the business of furnishing insurance protection to the
public.
| Insurance Commissioner: The top
insurance regulatory official in a state.
| Insurance Exchange: Term used to describe
a facility that exists in a few states to provide a market for reinsurance
and for the insurance of large and unusual domistic and foreign risks that
are difficult ot insure in the normal markets. Examples are the New York
Insurance Exchange, the Insurance Exchange of the Americas, and the Illinois
Inurance Exchange.
| Insurance Examiner: The representative of
a state insurance department assigned to participate in the official audit
and examination of the affairs of an insurance company.
| Insurance Guaranty Funds: State
Funds that provide for the payment of unpaid claims of insolvent insurers.
| Insurance Services Offices (ISO):
Major rating organization in property and liability insurance that drafts
policy forms for personal and commercial lines of insurance and provides
rate data on loss costs for property and liability insurance lines.
| Insured: A person or organization covered by an
insurance policy, including the "named insured" and any other
parties for whom protection is provided under the policy terms.
| Insured or Insured Life: The person
on whose life the policy is issued.
| Insurer: The party to the insurance contract who
promises to pay losses or benefits. Also, any corporation engaged primarily
in the business of furnishing insurance to the public.
| Insuring Agreement: That part of an
insurance contract that states the promises of the insurer.
| Insuring Clause: The clause which sets forth
the type of loss being covered by the policy and the parties to the
insurance contract.
| Integration: A coordination of pension,
disability or other benefit with the other sources of income, such as Social
Security benefit, through a specific formula designed to ensure reasonable
income replacement.. Qualified plans must integrate so that total benefits
are non-discriminatory between rank and file employees and owners, officers
or highly compensated employees.
| Inter vivos Trust: A trust created
while the creator of the trust is living. Also known as a living trust.
| Interest: Money paid for the use of money.
| Interest-Adjusted Method: Method of
determining cost to an insured of a life insurance policy that considers the
time cost of money by applying an interest factor to each element of cost. See
Also Net payment cost index; surrender cost index.
| Interest Option: Life insurance settlement
option in which the principal is retained by teh insurer and interest is
paid periodically.
| Intestate: Without a will.
| Investment Income: The income generated by
a company's portfolio of investments (such as in bonds, stocks, or other
financial ventures).
| Investment Income: The portion of a
company's income which is derived from its investments, including interest
and dividends on stocks and bonds.
| Investment Only Contract: Type of
funding instrument that uses only the investment services of an insurer.
| Involuntary Costs: insurance company
costs incurred as a result of participating in insurance pools (e.g.,
workers compensation). Insurance companies must participate in
these pools as a condition of doing business.
| IPG Plan: See Immediate Participation
Guarantee Plan.
| IRA: See Individual Retirement Account.
| Irrevocable Beneficiary: Beneficiary
designation allowing no change to be made in the beneficiary of an insurance
policy without the beneficiary's consent.
| Irrevocable Trust: A trust in which the
creator does not reserve the right to reacquire the trust property.
| ISO: See Insurance Services Office. |
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