I – Glossary of Terms


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Immediate Annuity: An annuity providing payment to begin immediately.

Incontestable Clause: A clause which provides that the insurer may not contest the validity of the contract after it has been in force for a period of years.

Indemnification: The compensation to the victim of a loss, in whole or in part, by payment, repair, or replacement.

Independent Agent: An independent agent is a business person who represents two or more insurance companies in a sales and service capacity and who is paid on a commission basis.

Independent Agency System: The 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.

Individual Contract: A contract of insurance made with an individual called the insured, which normally covers such individual and, in certain instances, members of their family.

Individual Deductible: The amount that an insured and each person of his or her family covered by the policy must pay before a group or individual medical insurance policy begins to pay for medical expenses.

Individual Insurance: An insurance policy which will provide protection to the policyholder and / or family.

Individual Retirement Account (IRA): A qualified account which an individual (under age 70) can make annual contributions of of earnings up to to a certain dollar limit.

Industrial Life Insurance: Life insurance issued in small amounts, usually less than $1,000, with premiums payable on a weekly or monthly basis.

Inflation-Guard Endorsement: Endorsement added to a homeowners policy to increase (periodically) the face amount of insurance of the dwelling and other policy coverage’s by a specified percentage.

Initial Reserve: For life insurance, the reserve at the beginning of any policy year.

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. Also covering goods in transit, excluding ocean voyages, it includes numerous “floater” policies, such as: personal effects, personal property, jewelry, furs, fine arts, and other items.

Innkeepers Legal Liability: A coverage for motel and hotel operators, protecting them from the legal liability they have for the property of guests.

In-Patient: A patient admitted to a hospital or other medical facility.

Insolvent: Not having sufficient financial resources to meet financial obligations.

Insurability: The accepting of the insurer an applicant for insurance.

Insurable Risk: The conditions that make a risk insurable are: (1) It must be accidental, (2) The loss must be defined, (3) The peril insured against must produce a definite loss and hardship not under the control of the insured, (4) There must be a large number of exposures subject to the same perils, (5) The loss must be calculable and the cost of insuring must be economically feasible, (6) The peril must be unlikely to affect all insureds simultaneously, and (7) 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 (called a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions in a contract.

Insurance Company: An organization chartered to operate as an insurer.

Insurance Commissioner: The top insurance regulatory official in a state.

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.

Insurer: The party to the insurance contract who promises to pay losses or benefits, or any corporation engaged primarily in the business of furnishing insurance to the public.

Insuring Agreement: The part of a insurance contract stating the promises of the insurer.

Insuring Clause: A clause which sets forth the type of loss being covered by the insurance policy and the parties to the insurance contract.

Interest: Money paid for the use of money.

Intestate: Dying without a will, thus allowing the probate court to appoint an administrator of the estate..

Investment Income: The portion of a company’s income which is derived from its investments, including interest and dividends on stocks and bonds.

Irrevocable Beneficiary: Beneficiary designation allowing no change to be made in the beneficiary of an insurance policy without the consent of the named beneficiary.

Irrevocable Trust: A type of trust that cannot be revoked by the creator.

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