Whole life insurance glossary: 80+ terms in English and Chinese

Long-term life insurance that provides cover until the life assured dies (or to the maximum age written in the contract), with part of the premium used to build cash value; for the same sum assured it usually costs more than term insurance. In Singapore, whole life insurance comes in participating and non-participating forms.

Life insurance that provides death (and, where the contract includes it, disability) cover only for an agreed period, usually with no cash value, and generally cheaper than whole life for the same sum assured. If the term expires without a claim, the contract ends.

Also called a "par" policy. Premiums are pooled in the insurer's participating fund and policyholders share in the fund's surplus through non-guaranteed bonuses, alongside guaranteed benefits. Bonuses depend on the fund's investment performance, claims experience and expenses.

A policy that provides only the guaranteed benefits and guaranteed cash values written in the contract, with no bonuses. The benefits are fixed at issue; the policy neither shares in the participating fund's surplus nor is affected by bonus cuts.

A fund the insurer sets up specifically for participating policies, pooling their premiums and investing them collectively in government and corporate bonds, equities, property and cash. Its assets are not accounted for separately for each policyholder, which distinguishes it from an ILP.

The amount the contract promises to pay when the insured event occurs, also called the sum insured or face amount. The actual payout under a participating policy may add declared bonuses to the sum assured and may deduct outstanding amounts owed.

The contractual sum assured excluding any multiplier layer, bonuses and riders; it is the base on which reversionary bonuses and the multiplier layer are calculated. Some products express reversionary bonuses as so many dollars per S$1,000 of basic sum assured.

The value of a policy that can be surrendered or borrowed against; in a participating policy it usually consists of a guaranteed part and a part corresponding to declared bonuses. Most whole life policies acquire cash value only after a minimum period, and in the early years it may be below the premiums paid.

The amount the insurer actually pays on surrender. Early surrender often carries a high surrender charge, and you may get back only part, or very little, of the premiums paid; the surrender value of a participating policy has guaranteed and non-guaranteed components.

The part of the surrender value written in the contract that does not vary with the participating fund's performance. The PPF Scheme caps the aggregated guaranteed surrender value per life assured per insurer at S$100,000 (SDIC).

The amount paid to the beneficiaries (or the estate) when the life assured dies. For participating whole life it is usually the sum assured plus declared bonuses, less any outstanding policy loan and interest; the exact formula is in the policy contract.

A condition, as defined in the contract, in which life expectancy is severely limited. Some whole life policies pay the death benefit early on terminal illness; the criteria and time frame are set by the policy terms, for example one Product Summary defines it as death expected within 12 months.

Disability from injury or illness that, under the contract's definition, prevents the person from working or caring for themselves and is not expected to improve. MoneySense notes that TPD cover under direct purchase whole life ends at age 65; other products follow their own terms.

Cover that pays a lump sum on diagnosis of a serious illness listed in the contract, often added to whole life as a rider. CI definitions are standardised under LIA's framework, and a rider's claim conditions are independent of the basic policy.

The person whose life is covered and whose death or disability triggers a payout. May differ from the policy owner, for example when a parent insures a child: the parent is the policy owner and the child the life assured.

The person who contracts with the insurer, pays the premiums and holds the rights under the policy, including surrender, loans, assignment and nomination of beneficiaries. After a trust nomination these rights are restricted.

The person entitled to receive the payout under a statutory nomination, the policy terms or a will. Singapore's statutory nominations are either trust nominations or revocable nominations, which differ in who can be named and in the policy owner's rights.

The actuary an insurer appoints under regulatory requirements to assess the financial condition of its business. For participating business, the appointed actuary analyses the fund's performance each year and recommends bonuses, which the board approves before they are declared.

A bonus added to the policy at regular intervals (such as yearly), usually as an increase in the sum assured; once added it forms part of the guaranteed benefits and cannot later be reduced by the insurer. On surrender, usually only a proportion of it is paid.

A non-guaranteed bonus that may be paid on surrender, claim or maturity; it is separate from reversionary bonuses and is not added to the policy in advance. Whether it is paid, and how much, depends on the fund's position at the time and is not guaranteed.

A bonus paid in cash when declared, rather than added to the sum assured. Whether it is offered and how it is distributed follow the Product Summary and the insurer's bonus notice.

A bonus that has been declared and formally added to the policy, forming part of the guaranteed benefits. When the PPF Scheme calculates the guaranteed benefits of a participating policy it includes declared and vested bonuses, still subject to the caps.

Not paying out all of the excess return immediately in good years but holding some back as a buffer, so that bonuses do not fall sharply in poor years and do not track short-term market movements exactly. Smoothing aims to even out over the long term; it is not a withholding.

An actuarial concept: the premiums paid by a class of policies plus investment income, less claims, expenses and other outgo, representing the value that in theory belongs to that class; commonly used as a reference in setting bonuses. The method differs by insurer.

The insurer's annual announcement, approved by the board, of the reversionary bonus, terminal bonus and other bonuses for participating policies for that year. The timing, vesting date and form of notice follow the insurer's bonus notice.

The information that must be sent to participating policyholders each year after sale, explaining the fund's performance and outlook, the year's bonuses and when they vest, and bonus rates for previous years, with a full Policy Illustration available on request (as required by MAS Notice 320).

The participating fund's allocation across asset classes such as bonds, equities, property, loans and cash, which may change over time. The Product Summary must disclose the current investment mix under regulatory requirements.

The participating fund's annual investment return after investment expenses. The Product Summary discloses, as required, each of the past 3 years and the 3-, 5- and 10-year averages; these reflect the past only, do not indicate the future, and are not the return on the policy.

The participating fund's total annual expenses as a proportion of fund assets. The Product Summary discloses the past 3 years' figures and the average, which can be used to compare funds' expense levels, but the TER is not the policy's total cost.

In participating business, the profit allocated to shareholders is capped at one-ninth of the value of the non-guaranteed bonuses allocated to participating policyholders: at most S$1 to shareholders for every S$9 of bonuses. The cap is not the actual split.

A non-participating layer of cover added on top of the basic sum assured that multiplies the death and other benefits by a chosen factor up to a selected age, then steps down. The multiplier layer accumulates no bonuses, and the payout is often the higher of the multiplier layer and the basic sum assured plus bonuses.

The age or policy anniversary at which the multiplier layer stops fully multiplying the cover. How it steps down afterwards differs by product; one Product Summary example reduces it by 10% a year for 5 years and then holds it level. The Product Summary prevails.

A design in which premiums are paid in full over a fixed term (such as 5, 10, 15, 20 or 25 years) while cover continues for life. LIA's guide notes that whole life premiums can be arranged over a limited term. Bonuses remain non-guaranteed after premiums are paid up.

The number of years, or the age up to which, premiums must be paid; it can be shorter than the cover period. The shorter the term, the higher the annual premium; after the term ends no further premiums are due and cover continues.

A contractual guarantee that the premium stays level throughout the premium term and does not rise with age or changes in health. The guarantee covers the premium, not the bonuses or the level of cash value.

Stopping premiums and using the existing cash value to convert the policy into one with a lower sum assured that stays in force with no further premiums (YGTLI). Whether it is offered, and how the reduced sum assured is calculated, follow the contract.

Borrowing from the insurer up to the cash value, repayable with interest. Any outstanding amount is deducted from the death benefit or surrender value, and if the loan plus interest grows too large the policy may terminate. Term insurance usually has no such feature.

When a premium is overdue and the grace period has passed, the insurer automatically advances the premium as a loan to keep the policy in force if the cash value is sufficient, with interest accruing daily; if the cash value is insufficient, the policy terminates.

An additional period after the premium due date in which to pay, usually 30 days according to LIA's guide. The policy remains in force during the grace period and the insurer still expects the premium for that period.

Termination of the policy, and of cover, because premiums are unpaid and there is not enough cash value to advance them, or for similar reasons. Most contracts allow reinstatement within a stated period (usually about two years, per LIA's guide) if conditions are met.

Restoring a lapsed policy within the period the contract allows. It usually requires payment of the arrears and satisfaction of the insurer's conditions, and may involve re-underwriting; periods such as the suicide clause may restart after reinstatement.

Withdrawing part of the cash value while the policy continues. The sum assured, bonuses and subsequent cash value usually reduce accordingly, and some products impose limits such as a minimum retained value; the policy terms prevail.

Additional cover attached to the basic policy, such as critical illness, premium waiver or accident. Riders have their own terms and claim definitions; the PPF Scheme applies different cap rules to accelerated-benefit riders and other riders.

Early payment of part or all of the basic sum assured on an event listed in the contract (such as critical illness), with the death benefit reduced accordingly. Different from a rider that adds extra cover on top.

Future premiums are waived, and the policy stays in force, when the life assured or the payer suffers an event listed in the contract (such as critical illness or disability); mostly offered as a rider. IRAS's Life Insurance Relief does not cover this type of rider.

A provision that the insurer will not pay if suicide occurs within a stated period after the policy takes effect or is reinstated. The length of the period follows the contract; one Product Summary example is 12 months.

Features in some products that allow the life assured to be changed to another person, or a successor to be named in advance to take over the policy after the policy owner's death, so that the policy continues across generations. Availability, conditions and limits follow the Product Summary.

A document prepared at the point of sale for the applicant's circumstances, showing premiums, guaranteed benefits, non-guaranteed benefits at assumed rates of return, the surrender value table, effect of deductions and total distribution cost. It is an illustration, not a forecast.

The two assumed rates of return used in a Policy Illustration to illustrate non-guaranteed benefits. For Singapore-dollar participating policies they have been capped at 4.25% and 3.00% since 2021-07-01 (LIA); they are for illustration only and are not upper and lower limits on the participating fund's performance.

Guaranteed benefits are those the contract promises to pay, such as the guaranteed death benefit, guaranteed cash value and declared and vested reversionary bonuses; non-guaranteed benefits are future bonuses and similar items that depend on the participating fund's performance and may be higher or lower than illustrated.

The sum of expected distribution-related costs up to a given policy year, disclosed in the Policy Illustration without interest, including commission and the benefits and service costs paid to the distribution channel. It is already built into the premium and is not an additional charge.

The section of the Policy Illustration showing the difference between the value of premiums paid and the policy's total surrender value, covering the cost of insurance, distribution cost, expenses and surrender charges. It helps explain why early surrender loses so much.

The insurer's document summarising a product's main benefits, features, risks, charges and surrender terms. Before buying a participating policy, read it together with the Policy Illustration and Your Guide to Life Insurance.

A page provided with the insurance documents to highlight important information, helping the reader grasp the key points before reading everything else. It does not replace the Product Summary or the policy contract.

The 14 days after receiving the policy documents during which you can decide to cancel and recover the premiums paid, less costs the insurer has already incurred such as medical examination fees (MoneySense, 2026-05-11). Notice must be given to the insurer in writing within the period.

Borrowing from a bank or other financial institution to pay premiums, with the policy value as collateral. The interest rate, loan-to-value ratio and margin-call terms are set by the bank; if rates rise or the policy value falls you may be asked to top up, and if you cannot repay you may lose the cover. The bank's and insurer's documents prevail.

The insurer's process of assessing an applicant's risk and deciding whether, and on what terms, to accept it; the outcome may be standard acceptance, a loading, an exclusion, postponement or decline, and it covers both medical and financial aspects.

Assessing an applicant's health risk from the health questionnaire, medical history, examination and medical reports. LIA publishes a guide to medical underwriting that explains the general framework.

Assessing whether the sum assured is in proportion to the applicant's income, assets and source of premiums and whether the purpose of the insurance is reasonable, to prevent over-insurance and improper use. Particularly important at high sums assured.

The amount of cover, within given age bands, that can be accepted on the health questionnaire alone without a medical examination. The figures differ by insurer and do not remove the duty to disclose medical history.

An extra premium added to the standard premium after underwriting because the risk, for health, occupational or other reasons, is above standard. Before accepting, understand the size and duration of the loading and whether it can be reviewed later.

Circumstances the contract expressly does not cover, including specific exclusions for particular conditions and general exclusions such as suicide within the suicide clause period. Read the scope carefully before accepting the offer.

An arrangement under some products to accept specified groups without fresh medical underwriting. Financial underwriting, sum assured and age limits may still apply; it is not unconditional acceptance, and the product terms prevail.

The applicant's obligation to disclose truthfully and completely the information the application form asks for. LIA's guide states that if you are unsure whether a fact is material, disclose it; an omission may make the policy void or lead to a claim being declined.

The legally recognised interest the policy owner must have in the life or health of the life assured, such as oneself, a spouse, a child or a financial interest, without which the contract may not stand. The test is set by law.

The adviser's fact-find (Know Your Client form) assessing income, liabilities, family responsibilities, protection gap and risk tolerance, as the basis for recommending a sum assured and product type; advised sales in Singapore follow a needs-based process (YGTLI).

Terminating or reducing an existing policy and buying a new one. It may involve a surrender loss, the early-year costs of the new policy and re-underwriting. MAS Notice 318 sets mandatory requirements for the replacement of life policies.

A nomination in which the policy owner can name only a spouse and/or children; once made, the policy owner loses ownership of the policy, and any change, revocation, loan or surrender needs the written consent of the trustee or all beneficiaries (LIA YGTNIN).

A nomination in which anyone can be named and the policy owner keeps all rights under the policy, with the nomination changeable or revocable at any time; only the death benefit goes to the beneficiaries, while living benefits stay with the policy owner (LIA YGTNIN).

An arrangement in which a trustee holds the policy or its proceeds and distributes them to beneficiaries under a trust deed. Unlike a statutory nomination it can set conditions such as staged payments; it must be drafted by a lawyer and costs money to set up and maintain.

A person or institution that holds property or policy proceeds under a trust deed or a statutory nomination and manages them for the beneficiaries. A trustee may also need to provide a CRS self-certification.

The court process that confirms a will is valid and authorises the executor to deal with the estate. Where there is a valid nomination, insurance proceeds can be paid directly without probate (LIA YGTNIN).

All the property a person leaves on death. Proceeds paid under a valid trust nomination or revocable nomination are generally not distributed as part of the estate; the effect in a specific case should still be confirmed with a lawyer.

Transferring the rights under a policy to another person or institution; the insurer must be notified in writing, otherwise the assignment may not be effective at claim time (YGTLI). The insurer is not responsible for verifying whether an assignment is valid.

A scheme that protects policyholders if a PPF member insurer is unable to continue; it covers guaranteed benefits only and is capped: for individual life policies, S$500,000 of aggregated guaranteed sum assured and S$100,000 of guaranteed surrender value per life assured per insurer (SDIC).

The body that administers deposit insurance and the Policy Owners' Protection Scheme; it is a company limited by guarantee established under statute, not a government department (SDIC FAQ). Policyholders are covered by the PPF Scheme automatically, with no application or payment.

Singapore's central bank and integrated financial regulator, which supervises insurers, advisers and distribution channels and issues rules such as Notice 318 and Notice 320. Regulatory status is not an endorsement of any product.

The trade association of Singapore's life insurers, which publishes guidelines on policy illustrations, the illustration rate caps, consumer guides and industry statistics. An insurer's membership is not an endorsement of its products.

An independent body for mediating and adjudicating financial consumer disputes; lodging a complaint is free, and the award limit for insurance claims is S$150,000 per claim (for cases filed from 2024-07-01). Awards bind the financial institution but not the consumer.

Lower-cost term and whole life insurance sold without financial advisers, with product names carrying the prefix "DIRECT". Whole life DPI offers S$50,000 to S$200,000 of cover per insurer, and term and whole life DPI are capped at S$400,000 in total (MoneySense, 2026-09-28).

An insurance comparison portal run jointly by CASE, LIA, MAS and MoneySENSE, covering DPI, term, whole life and endowment products. It provides information only and does not sell insurance; comparisons still need to be aligned on sum assured, term and currency.

The OECD standard for the automatic exchange of account information. Insurers that issue Cash Value Insurance Contracts are Reporting Financial Institutions and must identify account holders' tax residency and report to IRAS.

A person's status as a taxpayer under the tax law of a jurisdiction, which determines where they file and to which jurisdiction information is exchanged under CRS. It is not the same as nationality or visa status.

A relief under Singapore personal income tax, available only when compulsory CPF and similar contributions in the preceding year total less than S$5,000, and subject to a cap; endowment policies and riders do not qualify (IRAS, 2026-08-10).

A tax on a deceased person's estate. IRAS states that Singapore has removed estate duty for deaths on or after 15 February 2008 (page updated 2026-03-09); cross-border families still need to know other countries' rules.