Glossary

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I

Immediate annuity
An annuity under which income payments begin one annuity period, e.g., one month or one year, after the annuity is purchased.

Implied contract
A binding contract created by the actions of the principals, rather than by written or oral agreement of the parties.

Income protection insurance policy
A type of disability income policy which specifies that an insured is disabled if that person suffers an income loss caused by a disability.

Incompetent
A person not legally qualified to reach proper decisions, e.g., a minor, an insane person or

Incontestability provision
Life insurance policy wording that provides a time limit on the insurer's right to dispute a policy's validity based on material misstatements in the application.

Increasing term insurance policy
A term insurance policy that provides a death benefit which starts at one amount and increases at stated intervals by some specified amount or percentage.

Indexed life insurance
A whole life plan of insurance in which the face amount of the policy and, correspondingly the premium rate, increase automatically every year based on an increase in the Consumer Price Index (CPI).

Individual Retirement Account (IRA)
A savings plan which allows citizens to accumulate funds for retirement on a tax deferred basis.

Informal contract
A legally binding agreement whose enforceability does not depend on the form in which it is written, but rather on whether it meets certain prerequisites that give rise to an enforceable contract.

Inspection receipt
A receipt stating that an insurance policy has not been "delivered" even though it has been placed in the hands of the prospective policy owner. Insurance protection generally is not in effect under this receipt.

Inspection report
The results of an agency's investigation of such underwriting factors as an insurance applicant's lifestyle, activities, occupation, and economic standing.

Installment refund annuity
A life income with refund annuity under which the refund is made in the form of a series of payments to the designated beneficiary. See also cash refund annuity.

Insurable interest
In life insurance, a person's interest, financial or emotional, in the continuing life of the insured.

Insurance
A contract under which, for a consideration, one party (the insurer) agrees to indemnify another (the insured) for a possible loss under specific conditions. These conditions may be loss of life, health, property, property rights, etc.

Insurance agent
A sales person who represents a life insurance company for the purpose of soliciting applications, collecting initial premiums, and servicing insurance contracts. Also known as field underwriter or life underwriter.

Insurance, casualty
Insurance against losses on property caused by fire, flood, theft or other disaster.

Insurance, mutual mortgage
The insurance provided by the FHA to insure lenders against loss through foreclosure.

Insured
The person whose life is insured under the policy.

Interest
1. A charge for the use of another's money, sometimes referred to as rent for the use of money.
2. A right in or a share of something. Partial ownership reflects an interest in real property; a mortgage is evidence of a lender's financial interest in property and a lease expresses the lessee’s rights in connection with the property.

Interest, compound
Interest computed both on the principal and on its accrued interest.

Interest, prepaid
Interest on a loan which is prepaid at the time of closing or settlement, sometimes called interim interest.

Interest, simple
Interest that is computed on the principal amount of the loan only.

Interpleader
A method for settling a claim under which the insurance company 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.

Intestate
Term used to describe a person who died without leaving a valid will.

Intestate succession
Transfer of property of a decedent who has not left a will; controlled by statutes.

IRA
Individual Retirement Account. A fund established by an individual for retirement purposes as authorized by Congress. Some or all of the money placed in the fund is tax deferred until withdrawal after age fifty-nine and one-half.

Irrevocable beneficiary
A name beneficiary whose rights to life insurance policy proceeds are vested and whose rights cannot be cancelled by the policy owner unless the beneficiary consents.