Click on a term to see its definition: J

Lost in the terminology insurance companies use? Our quick-reference insurance glossary provides easy-to-understand definitions and examples of the terms insurance professionals use.

Joint and Survivor Annuity

The Joint and Survivor Annuity is an annuity that involves two annuitants and guarantees that annuity payments will continue while both or one of the annuitants are still living.

Also known as a joint life annuity, this is usually bought by spouses in an effort to provide each other with regular income, even in the event of the death of one. Most of these annuities pay annuity income for the lifetimes of either one of the annuitants. There may also be changes in the amount of annuity payment received upon the death of one of the annuitants.

With a joint and survivor annuity, it is not necessary for an annuitant to assign his annuity to the other by virtue of a will. Both partners own the annuity, thus both have a right to the income from it.

When both annuitants die at the same time, the annuity may pass the income payments to a beneficiary or may pay a lump sum to the annuitants' estate or to the beneficiaries.

Joint Underwriting Association (JUA)

The Joint Underwriting Association or JUA is a group of insurance companies that is formed in order to cover a unique risk or a very large risk. Such risks are not readily available in the regular market. These kinds of risks include coverage for a big property, such as a jumbo jet, or for insurance like medical malpractice, specific kinds of coverage for homeowners insurance, auto insurance and some commercial coverages.

The members of the Joint Underwriting Association, since they share in the risk, also proportionately share in the premiums, as well as the profits and losses associated with the JUA. JUA generally sets their own rates in premiums and use appropriate coverage forms for the different risks or exposures. But these may still remain subject to the state insurance commission's approval.

Those who get insurance with JUA will pay premiums, plus an assessment fee.

Junk Bonds

Junk Bonds are bonds that have low credit ratings, but provide a higher yield.

These bonds have a credit rating, which is equal to or less than BB. But, because the credit rating is lower than those of investment grade bonds and the risk is deemed to be higher, those who issue it provide higher rates of return to make it more attractive to the investors.

State insurance commissions usually pose a limit on the amount invested in junk bonds by insurance companies. This is because insurance companies have to be more liquid - the assets must be easily sold to pay for claims, especially after a disaster.

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