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- IASA
- See Insurance Accounting and Statistical Association.
- IBNR
- See Incurred-but-not-reported.
- ILLUSTRATION
 
- A sale ledger or proposal that shows how a policy might perform under specific sets of assumptions. The ledger shows both guaranteed and non-guaranteed premium payments, cash values, death benefits, policy loans and withdrawals.
- IMMEDIATE ANNUITY
- An annuity for which the income benefit begins within a one-year period after the payment of a single premium.
- IMMEDIATE VESTING
- A form of vesting where the employee has full and immediate rights to all the money in the retirement plan. Examples of retirements plans with immediate vesting include the following:
- IMSA
- See Insurance Marketplace Standards Association.
- INCONTESTABLE CLAUSE
- A section of a life insurance policy that states that after the policy has been in force for two years (in most states) the company cannot void the contract because of misrepresentation or concealment by the insured.
- INCURRED-BUT-NOT-REPORTED (IBNR)
- The liability account on an insurance company balance sheet that reflects the claims that have been incurred but have not been report as of the date of the statement. This reserve is based upon statistical projections.
- INDIVIDUAL RETIREMENT ACCOUNT (IRA)
- A type of retirement plan established in 1974 by Congress to encourage people to save towards their retirement. The plan allows for an individual to contribute 100% of earned income or $2,000, whichever is less. For a spousal account (non-income producing spouse), 100% of earned income or $2,250 (divided between two accounts with the a maximum of $2,000 to any one of the account) whichever is less. Depending on income level and pension fund eligibility the IRA contribution may be tax deductible. Also see The Power Of An Early Start In Investing.
- INFLATION
- The effect of generally rising prices of goods and services. The Consumer Price Index or CPI is often used to measured the rate of inflation. Inflation is an important factor to consider in evaluating investment alternatives. See Example of the effects of inflation on an investment.
- INFLATIONARY RISK
- A form of investment risk that measures the effect of inflation on an investment. If the after-tax return on an investment is lower than the rate of inflation, the investor will have less purchasing power at the maturity of the investment. Also see inflation.
- INFORCE LEDGER
- A computer generated illustration of the current, projected and guaranteed values of an existing cash value life insurance policy. Generally the illustration begins with the current year and shows the values over the next 20 years. Assumptions about premium payments, interest and withdrawals from the policy are made in preparing the illustration.
- INFORCE
- Policies that are active.
- INITIAL PUBLIC OFFERING (IPO)
- A company's initial sale of stock to the public generally by young, small companies seeking to raise equity capital and create a public market for their stock.
- INSPECTION REPORT
- A statement prepared for a life or health insurance company by an inspection bureau that is used in the underwriting process. The statement may contain financial information, physical condition, habits and other information use to evaluate and classify the risk.
- INSTALLMENT REFUND ANNUITY
- An annuity contract where if the annuitant dies before receiving an income benefit equal to at least the premiums paid, the beneficiary will receive the difference in installments payments. If the annuitant lives beyond this point, the insurance company will make the income payments for the life of the annuitant and no payments will be made to the beneficiary.
- INSURABLE INTEREST
- This is an important concept in life insurance. At the time a life insurance policy is purchased, there must be an expectation of a monetary loss by the person purchasing the insurance that would result from the death of person that is insured. The insurable interest need not necessarily exist at the time of the death of the insured. An individual has an unlimited insurable interest in his/her own life. An insurable interest may not only exist between family members, like husband and wife, parent and child, but also between business partners, creditor and debtor and employer and employees.
- INSURANCE
- Contractual means of shifting the burden of pure risks through pooling to minimize financial loss. Individuals and businesses therefore pay premiums to insurance companies in exchange for the reimbursement in the event of loss.
- INSURANCE ACCOUNTING AND STATISTICAL ASSOCIATION (IASA)
- An organization of life insurance company statisticians and accountants. Also see the IASA Home Page.
- INSURANCE COMMISSIONER
- See Commissioner of Insurance.
- INSURANCE GUARANTY FUNDS
- A fund established in several states that is used to guarantee benefits of policies issued by insurance companies that become insolvent.
- INSURANCE INSTITUTE OF AMERICA (IIA)
- A professional organization that develops and publishes educational material and administers national examinations in the areas of general insurance, claims, supervisory, risk and loss control management, underwriting, premium auditing, accounting and finance and research and planning. Also see the IIA Home Page.
- INSURANCE MARKETPLACE STANDARDS ASSOCIATION (IMSA)
- An industry organization that promotes high standards of ethical market conduct in the development, sale and servicing of individual life insurance and annuity products. Also see the Insurance Marketplace Standards Association Home Page.
- INSURANCE SERVICES OFFICE (ISO)
- An organization of property and casualty insurance companies that develops insurance policies and calculates rates for its members. The rates may be used by smaller companies that do not have the loss experience to accurately develop rates. They may also be modified by larger companies to better fit their own loss experience.
- INSURANCE MARKETING SYSTEM
- Insurance is marketed in many different ways. Some of the more common distribution systems are as follows:
- INSURED
- The person or persons that are covered by an insurance policy.
- INTEREST-RATE RISK
- A form of investment risk whereby changes in interest rates adversely affect the value of a security portfolio. For example the value of bond holdings will decline should interest rates increase.
- INTEREST SENSITIVE WHOLE LIFE INSURANCE
- A form of cash value life insurance in which dividend rates are linked to changes in interest rates.
- INTER VIVO TRUST
- A type of trust established by people still living.
- INTESTATE
- A condition where an individual dies without a valid will. A court will ultimately decide how the estate of the deceased will be settled by following the state law.
- INVERTED YIELD CURVE
- The economic condition were the yield on short-term treasury issues is greater then the yield on long-term securities. In theory, this scenario could lead to further declines in interest rates and possible recession.
- INVESTMENT GRADE SECURITY
- A security with a credit rating of BBB/Baa or above as assigned by Standard & Poor's or Moody's. These bonds may be contrasted with high-yield corporate bonds (Junk Bonds).
- INVESTMENT INDEXES
- A means of measuring the rises and declines of the stock, bond and commodities markets. The most common include the following:
- INVESTMENT PYRAMID
- A model that is commonly used in financial planning to show the relationships among various types of financial service products and how they can be used to develop financial security.
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- The foundation of the pyramid is built to provide financial security and includes such items as basic life, health and disability insurance, a cash reserve and very safe investments such as money market funds and Treasury Bills. Without a strong base the entire pyramid could be undermined by an uninsured illness, disability or unexpected death.
As you move up the pyramid, the type of investments can become more growth oriented, with a longer time frame and the level of risk can be increased. At the top of the pyramid, the smallest area is for speculative investments such as options, limited partnerships or commodities.
- IPO
- See Initial Public Offering.
- IRA
- See Individual Retirement Account.
- IRREVOCABLE BENEFICIARY
- A beneficiary that can only be changed by the policy owner with the written authorization of the irrevocable beneficiary. Also see revocable beneficiary.
- IRREVOCABLE LIVING TRUST
- A type of trust whereby the grantor (donor) surrenders all control over the trust's assets and the right to change its terms in order to transfer assets from his estate to the estate heirs and avoid Federal Estate Tax and probate expenses.
- ISO
- See Insurance Services Office.
- INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS (IARFC)
- The IARFC was incorporated in 1994 to recognize practicing professionals who are capable of providing services to the public. See IARFC home page
- INTEREST SENSITIVE WHOLE LIFE INSURANCE
- A form of cash value life insurance in which dividend rates or cash values are linked to changes in interest rates.
- INVESTMENT-GRADE CORPORATE FUND
- A category of mutual fund with an investment objective of investing in corporate bonds with a credit rating of BBB/Baa or better as assigned by Standard and Poor's or Moody's.
- ISSUE DATE
- The date from which the insurance coverage begins. Also known as effective date.
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