Manulife Singapore

Welcome to our Glossary

We are passionate about making insurance simpler and easier for everyone to understand. So we thought it would be helpful to explain some of the unfamiliar terms that we have to use to ensure we are accurate.

We would love this to become the most comprehensive glossary in the industry so if you spot a term not listed here, please send a note to insurancemadesimple@manulife.com.

Simplifying the language we use is critical to our mission. We found that we couldn’t avoid using some technical terms because it’s the language of our industry and changing them might cause confusion. Instead, we have explained each using plain language. This glossary is intended to help you understand insurance terms which may be confusing or complex. It isn’t intended to replace conversations with our agents or partners, who are equipped to help you make the right decisions for your needs.

Speak to our financial consultant today!

Schedule now

Account value

Account Value is the prevailing net value of all units under the funds invested by you from time to time.

Attained age

Life insured's age last birthday at any time.

Automatic premium loan

This feature allows you to stay covered even if you have missed a premium payment. The premium and interest are deducted from the cash value of your policy when it is due.

This means that your benefits will be reduced if you don't restart your payments.

Cash value

Cash value comprises of guaranteed benefits and/or non-guaranteed bonuses.

When you surrender your policy, you will only receive the cash value (also known as surrender value) of the guaranteed and vested bonuses, which may be less than the total death benefit of the policy.

Cancelling the policy in the early years might result in penalty charges. This means that the cash surrender value could be smaller than the total premium you have paid so far.

Cool-off period / Free-look period

This mean you can cancel your policy by writing to us within 14 calendar days after you receive the policy.

Cover / Coverage

This is the amount of protection under your insurance policy. You pay us a premium to protect you against such unexpected events.

It is important that you discuss your needs with us before choosing a policy. It's also critical that you read your policy terms and conditions to understand what is included and what is excluded.

Critical illness

The Life Insurance Association Singapore (LIA) has standard definitions for the severe stage of 37 Critical Illnesses.

Examples: Major Cancer, Heart Attack of specified severity, end stage kidney failure.

Critical Illness insurance pays out a lump sum in the event that the life insured is diagnosed to be suffering from one of the CI if it meets the standard definition in the policy contract.

It is important that you discuss your needs with us before choosing a policy. It's also important that you read your policy terms and conditions, so you know both what is included and what is excluded.

Exclusions

The coverage (or cover) of a policy defines what is included in a policy whereas an exclusion provision defines what isn't.

This is why it is important that you discuss your needs with us before choosing a policy. It's also critical that you read your policy terms and conditions to fully understand what is included and what isn't.

Grace period

This is the amount of time that we continue to cover you if you missed out paying your premium. It is really important that you pay your premium before this period ends so that you continue to be protected.

It is a period of 30 calendar days from the premium due date.

Group insurance policy

A group insurance policy is which a single legal entity is named in the policy contract as the policy owner on behalf of the group members, who are named as the life insureds (e.g.: employees of a company)

Guaranteed renewal

This means that as long as you pay the premiums on your policy, we'll continue to insure you up to a pre-agreed age / policy terms as per the policy contract.

Immediate family member

Immediate family member usually refer to a spouse, a child, an adopted child, a stepchild, a sibling or a parent.

Incontestability provision

Except for fraud, non-payment of premium or exclusion, if you have made a mistake in your policy details during the policy term, this clause prevents us from denying a claim after a certain period of time, typically 2 years.

Individual insurance policy

This is a personal insurance policy that you choose to buy as a Policyowner.

It is different from a group insurance policy which is typically provided to you by your employer.

Initial premium

This is the first premium payment made under a new insurance policy.

Insurability

This refers to how eligible you are for insurance. We take into consideration factors like health, age and risk profile etc before making a decision.

Investment-linked policy (ILP)

It has both a life insurance and an investment component. Investment returns are based on the sub-fund's performance, so you need to select one that meet your investment objectives and risk profile.

There is no guaranteed returns. Insurance charges are paid for by the investment portion of the policy. Such charges rise with age and there is a risk that your units may not be enough to pay for them.

Issue age

This is the age we use as basis for your (life insured) premium when you buy a policy. This is computed as your age on your last birthday on the policy start date.

Typically, the older you are, the higher the premium.

Lapse

This means that you are no longer covered by your policy. It happens when you stop paying your premium and any potential grace period has expired. If this has happened please contact us immediately.

Level premium

This is a type of life insurance where premiums stay the same throughout the term of the policy.

Life insurance policy

The primary reason people buy life insurance is for protection - it can provide financial back-up during emergencies when you(life insured) passes on or become totally and permanently disable.

Some life insurance products bundle insurance with an investment component.

Life insured

This describes a person who is covered by an insurance policy. He/She may also be the policyowner.

Limited pay option

This means you pay a premium for a number of years but still have the benefits of the policy till end of policy term.

This can be especially helpful if you buy a policy later in life and only want to pay premiums for a limited period of time.

Loyalty bonus

This feature allows us to reward your loyalty by giving you additional units if the conditions are met.

Typically, loyalty bonuses are not guaranteed.

Participating policy

A participating policy share in the profits of the Company 's participating fund. Your share of profit is paid in the form of bonuses or dividends to your policy.

Bonuses or dividends are not guaranteed as they depend mainly on the investment performance of the participating fund.

Payout

This is an amount of money paid to you as the policyowner according to the policy contract.

Policy loan

A policy loan can be taken against the cash value of a policy. Interest are charged on the policy loan. Any unpaid amount from the loan will be offset from the policy's cash value

Policyowner/Policyholder

A policyowner is the person in whose name the insurance policy is held. Another term for this is 'policyholder'. So, if you buy an insurance policy under your own name, you’re the policyowner.

Policy year

This refers to a consecutive 12-month period, starting from the day the policy becomes effective.

Pre-existing condition

This means any medical condition or illness which existed before policy becomes effective.

It is important that you declare these conditions, so that we can confirm whether we can cover them. If you do not declare these conditions upfront, your policy may become invalid.

Premium

This is the amount of money you need to pay for your insurance policy, which may be paid on a monthly, quarterly, semi-annually or annually basis.

Premium paying period

This is the length of period (eg. years) that you (policyowner/policyholder) will need to pay regular premiums. It will vary depending on the type of policy you choose.

Premium rate

This may vary from year to year, depending on the level of cover and your risk profile.

Premium rates can be fixed, we call these 'level premiums'.

Rider

Another term for Rider is Supplementary benefit

Riders are extra benefits that a policyowner can buy to add on to a life insurance policy.

A rider increases the level of your coverage and will usually increase premiums.

Risk profile

Your risk profile refers to how much investment risk you are willing to bear. It varies from individual to indivdual, and changes as you grow older, as your finanical situation iand investment objectives change.

This glossary has been created for informational purposes and should not be considered as legal or financial advice. Contractual terms and conditions will prevail should any of the content in this glossary conflict with your policy documents.