Impaired risk:
In life insurance, a person who has an unfavorable health condition, or is exposed to an above-average occupational hazard, which makes him/her a substandard risk.  A risk that is substandard or below average.

Incontestable clause:
In life insurance, a contract clause which provides that for certain reasons, such as misstatements on the application, the company may not contest payment of benefits (assuming premiums have been paid) and the policy has been in force during the lifetime of the insured for a certain period, usually two years after issue.

Independent agent:
In life insurance, an agent who does not work for one insurance company, but rather represents one or more companies on an independent contractor basis.

Initial premium:
In life insurance, the first mode premium, generally payable with the application or upon delivery of the policy.

In life insurance, a term denoting that a policy has been issued, premiums are current and  coverage is in place.

Inspection report:
In life insurance, the report of an investigator containing facts required in order for the insurer to make a proper decision on an application for new insurance or reinstatement.

In life insurance, all conditions pertaining to an individual which affect his or her health, susceptibility to injury, as well as expectancy of life.  These factors are considered in determining the amount of risk.  If the risk is too high, the insurer will refuse coverage.

Insurable interest:
The interest arising when one person has a reasonable expectation of benefiting from the continuance of another person’s life or of suffering a loss at his or her death.  In life insurance, a person generally is considered to have an unlimited insurable interest in himself or herself.  However, a person must have an insurable interest in another person at the time of application in order to insure the other’s life.

Protection, through specified monetary compensation or reimbursement for loss, provided by written contract against the happening of specified chance or unexpected events.  The contractual relationship which exists when one party, for a consideration, agrees to reimburse another for loss caused by designated contingencies (e.g. death).  The first party is called the insurer; the second, the insured; the contract, the insurance policy; the consideration, the premium; the property in question, the hazard or peril.  The term assurance, common in England, is ordinarily considered identical to, and synonymous with insurance.

Insurance contract:
The legally binding unilateral agreement between an insurance company and a policyowner.

Insurance coverage:
The total dollar amount of insurance carried by an individual.

Insurance policy:
The printed form prepared by insurers to serve as the contract between the insurers and insureds.  See Insurance contract.

The individual or group covered by the contract of insurance.

The company granting the insurance.

One who dies leaving no will.  Also, the condition of dying without a will.

Irrevocable beneficiary:
A beneficiary that cannot be removed from an insurance policy without his or her formal (written) consent.

Irrevocable Life Insurance Trust (ILIT):
An irrevocable trust is a trust which cannot be terminated by the donor (grantor).  The ILIT is used to own an insurance policy for the purpose of keeping the life insurance proceeds free of federal estate tax upon the death of the insured.  Once the trust is established, it is irrevocable, which means it can never be changed, except by the courts and then only under very special circumstances.

The ILIT is both the policyowner and beneficiary.  The proceeds received by an ILIT can be used to pay the death expenses, including taxes of the insured.

Issue age:
The age of an insurance application or an insured as used for insurance purposes.  In some companies, the issue age is the age at last birthday.  In others, it is the age at the nearest birthday

Issue date:
The date upon which the life insurance application is approved and the policy is issued by the insurer.  This is not necessarily the same as the date of the policy or the date the insurance becomes effective.  However, life insurance policies frequently provide suicide and incontestability clauses, measured from the issue date.

(back to main Life Insurance Glossary page)

Visit these links to learn about:

Get instant life insurance quotes:

To speak with a licensed representative, contact us or call 866-691-0100

Latest News

Affordable Life Insurance with Asthma
life insurance with asthma

Something quite interesting about today’s life insurance market is that very few people pay more premium for being affected by asthma. In the grand scheme of things, only the worst cases of asthma are rated sub-standard by most life insurance companies. Yes, there is affordable life insurance with asthma. When someone is shopping for life […]

Read More
What is the Medical Information Bureau?
medical information bureau

The Medical Information Bureau (MIB) provides a collection of private medical and non-medical (hazardous avocations, hobbies, and driving violations) data. The primary purpose of the MIB is to furnish the exchange of underwriting information between its member companies. Member companies are compelled to report a coded summary of conditions and conclusions which may be important […]

Read More
6 Life Insurance Tips for Millennials
insurance tips for millennials

Although we grow into adults year by year, there can still be a shock to our systems when we find ourselves out of school and out of our parents’ home. Regardless of how prepared we may believe we are, complicated issues are thrown at us every day and in every manner. Yes, there is the […]

Read More