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Glossary of Insurance Terms - I

Glossary of terms used in insurance - I

  1. In Network: This includes health care personnel and care providers who are within the network of a particular insurance company. The company usually negotiates with the providers to provide services at a discounted price. A person usually pays less when he visits a health professional within a network.
  2. Indemnity Health Plans: These are also called” fee for service” plans. In these plans, the individual pays a certain percentage of the health care costs and the insurance company pays the rest. For e.g. an individual pays 20% of the cost for a service and the insurance company pays the remaining 80%. The fee for services is determined by the company and it differs with physicians.
  3. Independent Practice Associations: These are similar to HMOs. The difference is that the care is provided in the physician’s office rather than the HMOs office.
  4. Individual Health Insurance: Health insurance provided at the individual level, not at a group level. The premiums are usually higher than a group plan. It is usually bought if you don’t qualify for a group plan.
  5. Inpatient: This is the word referring to a person admitted to a hospital for at least 24 hours. It also refers to the care provided at the hospital.
  6. Identification Card: It is an identification provided to the member and his covered dependants. It explains the benefits to be provided to the members and is used by the company to identify the members.
  7. Indemnity: Benefits of a predetermined amount to be paid in case of a loss. The costs are reimbursed by the company on the basis of bills submitted.
  8. Immunizations: Therapy provided to prevent particular diseases.
  9. Infertility: The failure to conceive or to carry to term a normal pregnancy. It also includes diagnosis of the condition by a physician.
  10. Investigation Procedures: Particular procedures which have been put to limited use on humans and have not been admitted as effective by the medical community.
  11. Incurred Claims: This is the sum total of claims paid during a policy year after the reserves have been suitably subtracted.
  12. Independent Agent: An agent who deals with the plans offered by many companies. He offers services and sales procedures for several companies. He is paid on a commission basis.
  13. Individual Contract: A health insurance contract made with an individual. This usually covers him and his family.
  14. Insurance: This is a system where individuals and entities can guard against the risks of financial loss by paying a certain amount of money as premium on a regular basis.
  15. Insurance Commissioner: The topmost regulatory official dealing with insurance at the state level.
  16. Insured: This refers to the person or entity covered by the company. This may include the individual and any other parties covered by the plan.
  17. Insurer: The party which agrees to pate costs covered. It also refers to an entity engaged in providing insurance to people.
  18. Individual Deductible: It is a minimum amount to be paid by an individual and his family members before he can receive cover from the company.
  19. Insurability: The ability of a member to receive insurance from a company.
  20. Insurable Risk: These are the conditions that let a company accept certain risks of the member at the time of giving insurance.
  21. Identity Theft Insurance: This is the coverage provided against losses due to the theft of identity. This cover may include expenses for notarizing affidavits that are fraudulent, certified mail, the income lost due to taking leave from work in order to meet with law enforcement officials etc. It also includes fees for reapplication of loans ad fees of attorneys dealing with lawsuits and civil, criminal judgments.
  22. Immediate Annuity: This refers to a product that is bought with a certain amount of money at the time of retirement or later. The payments usually start off within a year. These annuities can be either fixed or variable.
  23. Income Date: This is the particular date on which annuity payments are supposed to begin under a contract. It is also referred to as the maturity date or annuity date.
  24. Income Protection Insurance: This is a form of disability income. The only difference is that in this form of insurance, coverage is provided even if the person is earning a lesser income because of his disabilities. Normal disability income coverage is also provided.
  25. Incontestability Provision: This is a kind of provision included in insurance and annuity plans which restricts the time period within which the insurer can reject an application because of deliberate mistakes made by the applicant in his application. It is also known as incontestable clause.
  26. Increasing Term Life Insurance: This is a type of life insurance that increases the amount of benefits at death by a particular amount every particular period of time. It is the opposite of a decreasing term life insurance.
  27. Incurred but Not Reported Losses/IBNR: This refers to the losses which have been incurred but are not reported before years have passed after it has been sold. Certain liability costs are of this type. For e.g. illnesses related to asbestos exposure do not show up before years have passed since the exposure. It also refers to cases where claims have been made but the extent of the disease is not clear yet. This is particularly true in case of injuries suffered by workers at the workplace. Reserves are adjusted by insurance companies according to new information becoming available.
  28. Indemnify: This refers to the provision of financial compensation for losses suffered.
  29. Indeterminate Premium Life Insurance Policy: It is a type of non participating whole life policy. It basically provides two kinds of premium rates. A maximum guaranteed rate is specified as well as a minimum rate. The insurance company charges the lower rate when the policy is bought and guarantees that the rate will continue for a specified period of time. After this period, the company may establish a new premium which may be higher or lower than the existing rate. This type is also known as non guaranteed premium life insurance policy. It is also called variable policy life insurance policy.
  30. Indexed Life Insurance Contract: This is similar to a universal life contract: the death benefits to be provided depend on the account value and the amount selected by the policy holder. The account value is linked to cumulative returns based on some tied indexes. This does not include dividends. Additional restrictions may apply on the final amount to be paid.
  31. Individual Retirement Account: This refers to a tax deductible savings plan for self employed individuals. It also refers to people whose earnings are below a minimum level or for people where employers do not offer any retirement plans. Certain others offer fixed contributions on a tax deferred basis. A type of retirement account was created in 1997 and it offers tax benefits to a class of individuals.
  32. Inflation Guard Clause: This refers to a particular facility in a home owners’ insurance policy. This type of a policy automatically adjusts to the current costs of construction whenever a policy is renewed.
  33. Inland Marine Insurance: This type of plan covers shipments not involving transportation by oceans. The plan covers transit by land and air. It also covers bridges, tunnels and other ways of communication and transportation. These plans also include floaters covering personal, expensive items like jewellery and expensive musical instruments.
  34. Insolvency: This refers to the condition of the insurance company by which it becomes unable to pay debts. The standards and regulations vary from state to state. When the regulators find indications of an impending insolvency, they do one of three things. (1) They place the company in a sort of rehabilitation. (2) The company is put into conservatorship. (3) If it is impossible to save the company, it is liquidated. The difference between the first two is that in conservatorship, the companies are merely guided. However, in rehabilitation, they are directed by the regulators. Perhaps one of the symptoms of a problem is when the companies fail to clear routine tests to check for trouble.
  35. Institutional Investors: This term refers to organizations such as insurance companies and banks which buy and sell large amounts of securities.
  36. Insurance Pool: This refers to a collection of insurance companies that gather assets to provide insurance to large risk groups like nuclear power stations. It enables them to offer insurance on a collective basis to those areas which would be impossible to cover individually. These gatherings may be voluntary in the information or be state mandated. These covers are usually offered to applicants who would find it difficult to secure coverage in the voluntary market.
  37. Insurance Regulatory Information System (IRIS): This is a system which uses financial ratios in order to gauge the financial strength of an insurer. It was developed by The National Association of Insurance Commissioners. The decision on how to use IRIS depends on the individual judgment of a state.
  38. Insurance Score: These are private rankings derived from credit ratings. Details like timely payments of loans, number of open credit card accounts and bankruptcy filings are taken into account. It is basically taken as an indicator of the financial health of the individual. Information about race and income are not included.

    These types of records are taken out as they indicate how well an individual might manage his insurable assets. Some companies also use these tools to underwrite and rate the applicant.
  39. Insurance to Value: This refers to the insurance that is fixed to approximate the value of the insured property.
  40. Integrated Benefits: This is a type of coverage where no differentiation is made between illnesses contracted during a job or otherwise. In this type of plan, workers’ compensation and coverage for general health is combined. There are legal problems to this type of plan because they are usually administered separately. These plans were previously referred to as twenty four hour coverage.
  41. Interest Adjusted Cost Comparison Index: This is a type of cost comparison index that is used to compare various life insurance plans. A customer can decide on the plan he wants by comparing the price indices of the various plans.
  42. Interest Sensitive Insurance: This is a type of plan where the cash value or the face amount of the plan varies according to the investment earnings of the insurer.
  43. Intermediation: This refers to the process by which investors and savers are brought together to ensure that they obtain a return on their money. Borrowers often use the funds to purchase or to finance loans.
  44. Internet Insurer: This refers to an insurer who sells his products through the internet only.
  45. Internet Liability Insurance: This refers to coverage that is provided to safeguard businesses against hazards arising out of conducting their business online. It includes defamation, violation of privacy rules and copyright infringements.
  46. Irrevocable Beneficiary: This refers to the beneficiary of a life insurance plan who stands in a special position because the policy owner can change the name of the beneficiary only with his prior consent. It is the opposite of a revocable beneficiary.
  47. Impaired Insurer: This a term used to describe an insurer who is in financial difficulties to the extent that he is unable to meet his regulatory or financial obligations.
  48. Independent Insurance Agents and Brokers Of America (IIABA): This is an association of independent brokers and agents who affect and monitor issues of the industry. Many state associations have IIBA affiliations.
  49. Income Taxes: These are the income taxes that are incurred and shown in the annual statement of a year.
  50. Inflation Protection: This is an optional coverage provided on property insurance. It increases the limits of the insurance to keep pace with changing rates of inflation.
  51. Insurance Attorneys: This refers to an attorney who studies law related to insurance. They may be practicing on a solo basis or as part of a plan. Insurance companies may hire lawyers to represent them on an in house basis or on a case by case basis.
  52. Insurance Institute of America (IIA): This is an organization developing programmes and conducting national examinations in risk management, underwriting, general insurance and other related topics.
  53. Interest Crediting Methods: There are about 35 methods used by insurers to credit interest. They are usually a combination of annual reset, point to point and high water mark.
  54. Investment Income: This refers to the income earned by insurers from their investments. It includes dividends, interests and capital gains on stocks that have been realized. It does not include prices of stocks that the company is still holding.
  55. Investments in Affiliates: These refer to the stocks, bonds and collateral loans and short term investments in real estate and affiliated properties held by the company.
  56. Insurance Regulatory Information System (IRIS): This was started by the national association of insurance commissioners in 1974. Its purpose was to find out which insurance companies needed further regulatory review.

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