Life Insurance and Life Settlement Terms - I
Insurability
Life insurance companies need evidence that a life insurance applicant is an acceptable risk. This usually includes, but might not be limited to, a medical exam.
Insured
The person whose life is covered by the policy.
Investor
According to the Insurance Studies Institute, "The same institutions that invest in life insurance concerns also buy life insurance policies through life settlements. These comprise multi-national banks, international corporate conglomerates, global insurance companies, pension funds, hedge funds, investment banks, syndicated funds and other major financial institutions.
Insured
This means the life of the individual upon which the insurance policy is placed
Insurability
Acceptability to the firm of an applicant for insurance.
Insured or Insured Life
The person on whose life the policy is given.
Increasing Term
A kind of term life insurance policy that provides a fixed death benefit payment for a specific period of time, characteristically one year, in exchange for a fixed premium payable for the same period. Generally the premium rises at the end of every term period.
Insurance Company
A business that solicits underwrites and gives contracts of insurance
Insured
The person covered by a life insurance policy.
Insurer
An insurance concern or issuer of insurance products.
Investor
A financing entity or other business entity that gives capital to a life settlement provider for the purpose of buying a portfolio of life insurance policies as an investment.
Irrevocable Trust
An irrevocable trust is a trust which cannot be altered or canceled without the consent of the beneficiary. Contributions may not be taken out of the trust by the grantor.
Irrevocable Beneficiary
A beneficiary whose rights to the proceeds of a term life insurance policy may not be cancelled by the policyowner unless the beneficiary consents.
Impairment
Any aspect of a proposed insured’s health, occupation, activities, or lifestyle that could augment his or her expected mortality or morbidity.
Impairment Rider
An attachment to a health insurance policy that excludes or limits coverage for exact health impairment.
Incontestable Clause
Term life insurance policy clause that gives a time limit (typically two years) on the insurer’s right to dispute a policy’s validity based on material misstatements made in the application.
Increasing Term Life Insurance
A type of term life insurance in which the death benefit of the policy augments during the term of coverage. The death benefit can increase at stated intervals by some specified amount or percentage, or it may increase according to augments in the cost of living.
Individual Insurance
Term life insurance that is given to insure the life or health of a named person or persons, rather than the life or health of the members of a group.
Initial Premium
The initial premium payable for a term life insurance contract.
Inspection Report
A report made by a customer reporting agency concerning a proposed insured’s lifestyle, occupation, and economic standing.
Installment Refund Option
A type of life income choice with refund which specifies that any proceeds remaining after the death of the beneficiary will be paid in installments to the contingent payee.
Insurability Provision
A term life insurance provision stipulating that, for a policy to become effective, the insured ought to 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 might ask an applicant to complete when a considerable amount of time has elapsed among the time the application is received and the time the term life insurance policy is actually issued. The reason/use of the insurability statement is to determine if any insurability factors have changed as the original application was completed. Insurability statements help protect insurers from post-issue Antiselection.
Insurability Type Temporary Insurance Agreement
An agreement given in conjunction with a conditional premium receipt that offers temporary term life insurance coverage as of the date specified in the agreement on the condition that the proposed insured is insurable.
Insurable Interest
A condition in which the person applying for a term life insurance policy and the person who is to get the policy benefit will suffer a genuine loss or detriment if the event insured against occurs. Without the presence of insurable interest, a word life insurance contract is not formed for a lawful purpose and, thus, is void from the start.
Insurance Trust
A general form of trust, created during the lifetime of the person who creates the trust, i.e. funded by insurance policies on the life of the trust’s creator or by the proceeds of such policies.
Insured
In the United States and Quebec, an individual whose life is insured by an insurance policy
Insurer
The party in an insurance contract that promises to disburse a benefit if a specified loss occurs.
Interest Option
A settlement option under which the insurer invests the proceeds of a term life insurance policy and disburses interest on these proceeds to the payee.
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 customer in question in order to solicit information regarding the consumer’s character, lifestyle, or common reputation.
Identity Theft Insurance
Coverage for expenses incurred as the result of an identity burglary.
Immediate Annuity
A product purchased with a lump sum, usually at the time retirement begins or afterwards. Payments begin within about a year. Immediate annuities can be either fixed or variable.
Income Date
The date on which an insurer starts or is scheduled to begin making annuity benefit payments under an annuity contract.
Income Protection Insurance
A kind of disability income coverage that provides an income benefit both, while the insured is totally disabled and not able to work and while he is able to work, but as of a disability, is earning less than he earned before being disabled.
Incontestability Provision
An insurance and annuity policy provision that limits the time within which an insurer has the right to shun the contract on the ground of material misrepresentation in the application for the policy
.Increasing Term Life Insurance
A kind of term life insurance that provides a death benefit that increases by some stated amount or percentage at stated intervals over the policy term. Contrast with decreasing term life insurance
Incurred But Not Reported Losses / IBNR
Losses that are not filed with the insurer or reinsurer until years after the policy is sold. Some liability claims can be filed long after the event that caused the injury to happen.
Incurred Losses
Losses happening within a fixed period, whether or not adjusted or paid during the same period.
Indemnify
Provide financial compensation for losses incurred.
Independent Agent
Agent who is self-employed, is paid on commission, and represents many insurance concerns.
Indeterminate Premium Life Insurance Policy
A kind of nonparticipating whole life policy that specifies two premium rates—both a utmost guaranteed rate and a lower rate.
Indexed Life Insurance Contract
An arrangement alike to a universal life contract. Death benefit amounts are based on the sum selected by the policyholder plus the account value.
Individual Retirement Account/IRA
A tax-deductible savings plan for those who are self-employed, or those whose earnings are below a definite level or whose employers do not proffer retirement plans. Others may make limited contributions on a tax-deferred basis.
Inflation Guard Clause
A provision added to a homeowner’s insurance policy that repeatedly adjusts the coverage limit on the dwelling every time the policy is renewed to reflect present construction costs.
Inland Marine Insurance
This broad kind of coverage was developed for shipments that do not entail ocean transport.
Institutional Investor
An organization such as a bank or insurance company that buys and sells large quantities of securities.
Insurable Interest
In insurance, a person exhibits an insurable interest in a latent loss if that person will suffer a genuine economic loss if the event insured against occurs. Without the presence of insurable interest, an insurance contract is not formed for a legal purpose and, thus, is not a valid contract.
Insurable Risk
Risks for which it is relatively simple to get insurance and that meet definite criteria. These include being definable, accidental in nature, and fraction of a group of similar risks big enough to make losses predictable. The insurance concern also must be able to come up with a reasonable price for the insurance.
Insurance
A system to make huge financial losses more affordable by pooling the risks of many individuals and business entities and transferring them to an insurance concern or other huge group in return for a premium.
Insurance Pool
A group of insurance concern that pool assets, enabling them to give an amount of insurance substantially more than can be provided by individual companies to ensure large risks like nuclear power stations.
Insurance Regulatory Information System / IRIS
Uses financial ratios to measure insurers’ financial strength.
Insurance Score
Insurance scores are top secret rankings based on credit information. This comprises whether the consumer has made timely payments on loans, the number of open credit card accounts and whether a bankruptcy filing has been made. An insurance score is a measure of how well customers manage their financial affairs, not of their financial assets. It does not include information about income or race.
Insurance-To-Value
Insurance written in an amount approximating the value of the insured property.
Integrated Benefits
Coverage where the distinction among job-related and non-occupational illnesses or injuries is eliminated and workers compensation and general health coverage are combined. Legal obstacles exist, however, as the two coverages are administered separately.
Interest-Adjusted Cost Comparison Index
A cost comparison index used to compare a life insurance policy cost that takes into account the time value of money. By comparing the index numbers derived for similar life insurance policies, a customer has few basis on which to compare the costs of the policies.
Interest-Sensitive Insurance
A common category of insurance products in which the face amount and/or the cash value vary according to the insurer’s investment earnings.
Intermediation
The method of bringing savers, investors and borrowers together so that savers and investors can obtain a return on their money and borrowers can use the money to finance their purchases or projects through loans.
Internet Insurer
An insurer that sells wholly via the Internet.
Internet Liability Insurance
Coverage designed to guard businesses from liabilities that arise from the conducting of business over the Internet, including copyright infringement, defamation, and violation of privacy.
Investment Income
Income produced by the investment of assets. Insurers have two sources of income, underwriting and investment income. The latter may offset underwriting operations, which are often unprofitable.
