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- Financial protection for your family’s future
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- Dedicated claim assistance
- Customisable plans to suit your needs
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In summary
- Policyholder: Owns the policy and pays the premium.
- Life assured: The person whose life is covered by the policy.
- Nominee: The person designated to receive the death cover.
- Sum assured: The guaranteed amount payable under the policy, as applicable.
- Policy term: The period for which the policy remains in force.
- Premium: The amount paid to keep the policy active.
- Riders: Additional benefits that can be added to the base policy.
- Claim: A formal request for payment of a policy benefit.
- Free look period: A specified period to review the policy terms and cancel it as applicable.
Knowing these terms can help you understand your policy before making a decision. Explore the different types of life insurance policies and compare options based on your protection and financial needs.
Which life insurance terms should you know?
| Term | Meaning |
|---|---|
| Policyholder | The person who owns the policy and pays the premium |
| Life assured | The person whose life is insured under the policy |
| Nominee | The person designated to receive the death cover |
| Sum assured | The guaranteed amount payable under the policy, as applicable |
| Policy term | The period for which the policy remains in force |
| Premium | The amount paid to keep the policy active |
| Death cover | The amount payable to the nominee on the death of the life assured during the policy term |
| Maturity benefit | The benefit payable under eligible policies when the life assured survives the policy term |
| Riders | Additional benefits that can be added to the base policy |
| Claim | A formal request for a policy benefit |
| Free look period | The specified period during which the policy can be reviewed and cancelled as applicable |
Who is the policyholder?
The policyholder is the person who owns the life insurance policy and is responsible for paying the premiums to the insurance company.
The policyholder may also be the life assured, depending on the policy structure. The policy document specifies the respective roles.
Who is the life assured?
The life assured is the person whose life is covered under the insurance policy. If the life assured dies during the policy term, the insurer pays the applicable death cover to the designated beneficiary, subject to the policy terms.
This distinction is useful because the policyholder and life assured are not always necessarily the same person.
Who is a nominee?
The nominee is the person selected by the policyholder to receive the death cover in the event of the life assured's death.
Providing nominee details helps identify who is designated to receive the applicable policy benefit. You should keep these details updated when necessary.
What does sum assured mean?
The sum assured is the guaranteed amount specified under a life insurance policy that may be payable on the occurrence of the covered event, subject to the policy terms.
For a death claim, the applicable amount is paid to the nominee as per the policy conditions.
What is the policy term?
The policy term is the period for which the life insurance policy remains in force.
It determines how long the insurer provides coverage under the policy. When choosing a plan, consider a term that aligns with your financial responsibilities and protection needs.
What is a life insurance premium?
The premium is the amount you pay to the insurance company to keep your policy active, as specified in the policy.
Depending on the policy, premiums may be paid:
- Monthly
- Quarterly
- Annually
- As a lump sum
The applicable payment frequency and premium structure depend on the plan you choose.
What is death cover?
Death cover is the amount payable to the nominee when the life assured dies during the policy term, subject to the policy's terms and conditions.
This is a key feature of life insurance because it is designed to provide financial support to the nominee after the death of the life assured.
What is a maturity benefit?
A maturity benefit may be payable under certain life insurance policies when the life assured survives the policy term.
Whether a maturity benefit applies depends on the type of policy and its terms. Therefore, check the specific policy document to understand what is payable at maturity.
What are riders in life insurance?
Riders are additional benefits that can be added to a base life insurance policy for enhanced coverage.
For example:
- Critical illness cover
- Accidental death cover
- Waiver of premium
The availability and terms of riders depend on the policy. Review the rider conditions before adding one to your base cover.
Understanding rider options can help you decide whether additional protection is relevant to your needs. Compare available coverage options before selecting a policy.
What does a claim mean in life insurance?
A claim is a formal request made to the insurance company to receive a benefit available under the policy.
Depending on the policy and the event, the claim may relate to the applicable death cover or maturity benefit. The insurer processes the claim according to the policy terms and required documentation.
What is the free look period?
The free look period is a specified period after purchasing a life insurance policy during which you can review its terms and conditions.
If you are dissatisfied with the policy, you may be able to cancel it and receive a refund of premiums paid, subject to the applicable terms and conditions.
Conclusion
Understanding essential life insurance terminology can help you evaluate a policy with greater clarity. Terms such as policyholder, life assured, nominee, sum assured, premium, policy term, death cover, maturity benefit, riders, claim, and free look period explain the key parts of a policy.
Before choosing a plan, read the policy terms carefully and make sure you understand the coverage, payment requirements, benefits, and applicable conditions.
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Frequently asked questions
Life insurance terminology
What is life insurance terminology?
Life insurance terminology refers to the terms used in a policy to explain its structure, coverage, payments, benefits, and processes. Terms such as premium, sum assured, policy term, nominee, death cover, and maturity benefit help you understand what the policy covers and how it works.
What are the common terms of life insurance?
Common life insurance terms include policyholder, life assured, nominee, sum assured, policy term, premium, death cover, maturity benefit, riders, claim, and free look period. Understanding these terms helps you read policy documents and compare life insurance options based on your financial and protection needs.
How to choose the right life insurance policy?
You can start by assessing your financial responsibilities and protection needs, then review the policy term, sum assured, premium, and applicable benefits. You should also understand the nominee details, riders, claim process, and free look period before selecting a policy.
What are the factors that determine life insurance premium?
Several factors influence life insurance premium calculations, including age, gender, health condition, lifestyle habits (such as smoking), occupation, coverage amount, policy term, and medical history. Younger individuals in good health typically pay lower premiums, while older individuals or those with pre-existing health conditions may face higher premiums. Additionally, certain occupations or risky activities may result in higher premium rates. Insurers assess these factors to determine the level of risk associated with insuring the individual and adjust premiums accordingly.
What are the five different types of insurance?
The five common types of insurance are life insurance, health insurance, motor insurance, home insurance, and travel insurance. Each serves a different purpose, from providing financial protection to your family to covering medical expenses, vehicles, property, or travel-related risks.
