Insurance Handbook - Alaska Department of Community and ...

Glossary
INTERNET INSURER
An insurer that sells exclusively via the
Internet.
INTERNET LIABILITY INSURANCE
Coverage designed to protect businesses
from liabilities that arise from the conducting
of business over the Internet, including
copyright infringement, defamation and
violation of privacy.
INVESTMENT ANNUITY
See Deferred annuity.
INVESTMENT INCOME
Income generated by the investment of
assets. Insurers have two sources of income,
underwriting (premiums less claims and expenses)
and investment income. The latter
can offset underwriting operations, which
are frequently unprofitable.
*IRREVOCABLE BENEFICIARY
A life insurance policy beneficiary who has
a vested interest in the policy proceeds even
during the insured’s lifetime because the
policy owner has the right to change the
beneficiary designation only after obtaining
the beneficiary’s consent. Contrast with
Revocable beneficiary.
J
JOINT AND SURVIVOR ANNUITY
An annuity with two annuitants, usually
spouses. Payments continue until the death
of the longest living of the two.
JOINT UNDERWRITING
ASSOCIATION/JUA
Insurers that join together to provide
coverage for a particular type of risk or size
of exposure, when there are difficulties in
obtaining coverage in the regular market,
and which share in the profits and losses
associated with the program. JUAs may be
set up to provide auto and homeowners in-
104 I.I.I. Insurance Handbook www.iii.org/insurancehandbook
surance and various commercial coverages,
such as medical malpractice. (See Assigned
risk plans; Residual market)
JUNK BONDS
Corporate bonds with credit ratings of BB
or less. They pay a higher yield than investment
grade bonds because issuers have
a higher perceived risk of default. Such
bonds involve market risk that could force
investors, including insurers, to sell the
bonds when their value is low. Most states
place limits on insurers’ investments in
these bonds. In general, because property/
casualty insurers can be called upon to
provide huge sums of money immediately
after a disaster, their investments must be
liquid. Less than 2 percent are in real estate
and a similarly small percent are in junk
bonds.
JOINT AND SURVIVOR ANNUITY
An annuity with two annuitants, usually
spouses. Payments continue until the death
of the longest living of the two.
K
KEY PERSON INSURANCE
Insurance on the life or health of a key individual
whose services are essential to the
continuing success of a business and whose
death or disability could cause the firm a
substantial financial loss.
KIDNAP/RANSOM INSURANCE
Coverage up to specific limits for the cost
of ransom or extortion payments and
related expenses. Often bought by international
corporations to cover employees.
Most policies have large deductibles and
may exclude certain geographic areas.
Some policies require that the policyholder
not reveal the existence of the coverage.