installment certificate
A certificate issued to the
beneficiary of a life insurance policy that specifies the amount of
each benefit payment and/or the period during which benefit payments
will be made under a settlement option. An installment certificate
also specifies whether a beneficiary is allowed to withdraw all or
part of the funds during the payment period. See also settlement
agreement and settlement options.
installment refund option
A form of life income option
with refund which specifies that any proceeds remaining after the
death of the beneficiary will be paid in installments to the
contingent payee. Contrast with the cash refund option.
insurability provision
An insurance provision
stipulating that, for a policy to become effective, the insured must
still be insurable at the time of policy delivery according to the
underwriting rules and practices of the company.
insurability statement
A questionnaire that an insurer
may ask an applicant to complete when a considerable amount of time
has elapsed between the time the application is received and the
time the policy is actually issued. The purpose of the insurability
statement is to determine if any insurability factors have changed
since the original application was completed. Insurability
statements help protect insurers from post-issue antiselection. See
also antiselection.
insurability type temporary insurance agreement
An
agreement issued in conjunction with a conditional premium receipt
that provides temporary life insurance coverage as of the date
specified in the agreement on the condition that the proposed
insured is insurable. See also conditional premium receipts and
temporary insurance agreements. Compare to approval type temporary
insurance agreement.
insurable interest
A condition in which the person
applying for an insurance policy and the person who is to receive
the policy benefit will suffer an emotional or financial loss if the
event insured against occurs. Without the presence of insurable
interest, an insurance contract is not formed for a lawful purpose
and, thus, is void from the start.
insurance
A system of protection against loss in which
a number of individuals agree to pay certain sums of money, called
premiums, to create a pool of money which will guarantee that the
individuals will be compensated for losses caused by events such as
fire, accident, illness, or death.
Insurance Act
In Canada, a general statute that
contains most of the insurance law of a common law province and that
regulates the conduct of insurers and insurance agents within the
province.
insurance agent
A representative of an
insurance company who sells insurance. An insurance agent locates
prospective insurance customers, determines the insurance needs of
each customer, and assists the customer in applying for insurance.
Typically, an insurance agent will deliver the policy when the
application is approved, will collect the initial premium, and will
provide customer service to policyowners. Also called an agent, a
field underwriter, or a life underwriter. See also broker, detached
agent, general agent (GA), personal producing general agent (PPGA),
and soliciting agent.
Insurance Regulatory Information System (IRIS)
In the
United States, an information system developed by the NAIC to help
state regulatory agencies assess the financial stability of
individual insurance companies by means of a series of ratios
derived from the companies' statutory annual statements.
insurance trust
A common form of trust, created during
the lifetime of the person who creates the trust, that is funded by
insurance policies on the life of the trust's creator or by the
proceeds of such policies.
insured
(1) In the United States and Quebec, a person
whose life is insured by an insurance policy (for individual life
insurance policies, called the life insured in the rest of Canada).
(2) In the common law provinces of Canada, the owner of an
individual life insurance policy (called the policyowner in the
United States and the policyholder or owner in Quebec). (For the
purposes of this glossary, we have used this term as it is used in
the United States and Quebec, except in the definitions of purely
Canadian terms, in which cases we have made it clear that we are
using the term as it is used in Canada.)
insured funding
A method of funding a pension plan in
which the plan sponsor purchases annuity or life insurance contracts
on behalf of each participant. The insurance company guarantees a
certain benefit to each retiree. See also group deferred annuity.
insurer
The party in an insurance contract that
promises to pay a benefit if a specified loss occurs. Usually an
insurance company.
insurer-administered group insurance plan
A group
insurance plan for which the insurer performs the administrative
work. This administrative work includes computing the amounts of the
premiums due and mailing premium notices to the policyholder,
usually monthly.
integrated deductible
A type of deductible included in
some major medical expense plans that can be satisfied by amounts
paid by the insured under basic medical expense plans. Contrast with
corridor deductible.
integrated dental plan
A dental plan which is part of a
major medical policy.
integrated pension plan
A private pension plan in which
the benefits or contributions are coordinated with the benefits or
contributions of a government-sponsored pension plan.
interest-adjusted cost
One figure
calculated under the interest-adjusted net cost (IANC) method of
comparing the costs of life insurance policies. The
interest-adjusted cost represents the average annual cost of a
policy and is calculated using premiums, dividends, and cash values.
Also called the surrender cost index (SCI).
interest-adjusted net cost (IANC)
method
A method of comparing the costs of life insurance
policies. The IANC method weights dividends and cash values
according to how far into the future the various amounts are
payable. Under this method, three amounts are calculated: the
interest-adjusted cost, the interest-adjusted payment, and the
equivalent level annual dividend. Also known as the surrender cost
index (SCI) method. See also cost comparison methods.
interest-adjusted payment
One figure
calculated under the interest-adjusted net cost method of comparing
the costs of life insurance policies. The interest-adjusted payment
represents the average annual payment for the policy and is
calculated using only premiums and dividends. Also called the net
payment cost index.
interest option
A life insurance settlement option
under which the proceeds of a policy are temporarily left on deposit
with the insurer and the money earned on those proceeds is paid
annually, semiannually, quarterly, or monthly to the beneficiary or
other payee.
internal replacement
The surrender of one life
insurance policy in order to buy another insurance policy that is
issued by the same insurer.
interpleader
A method for settling a claim under which
the insurer pays the policy proceeds to a court, stating that the
company cannot determine the correct party to whom the proceeds
should be paid, and asks the court to decide the proper recipient.
investigative consumer report
As defined by the Fair
Credit Reporting Act, a consumer report that uses interviews with
persons who are associated with, or who have knowledge of, the
consumer in question in order to solicit information regarding the
consumer's character, mode of living, or general reputation. See
also inspection report.
investment-sensitive insurance
A general category of
insurance products in which the death benefit and the cash value
vary according to the insurer's investment earnings. In
investment-sensitive insurance products, policyowners share a
portion of the insurer's investment risk. The exact benefit amounts
for these policies cannot be computed in advance, beyond any
guaranteed minimums. The specific products that make up this
category of insurance include variable annuities, variable life
insurance, and variable universal life insurance. Also called
interest-sensitive insurance.
investment year method (IYM)
An accounting method in
which an insurer keeps records of the interest rates it earns
annually on funds assigned each year to accounts within the general
account. Also called the new money method. Compare to the portfolio
method.
involuntary plan termination
The curtailment of a
pension plan initiated by a government organization, such as the
Pension Benefit Guaranty Corporation (PBGC) in the United States,
rather than by the plan sponsor. Contrast with voluntary plan
termination. See also distress termination and standard plan
termination.
irrevocable beneficiary
A beneficiary whose rights to
the proceeds of a life insurance policy cannot be cancelled by the
policyowner unless the beneficiary consents. See also beneficiary.
issuing bank
A mutual savings bank that sells and
issues life insurance policies in its own name. Each issuing bank
issues its own contracts, keeps its own records, and invests the
assets of its own insurance department. See also agency bank and
savings bank life insurance (SBLI).
