» Act of God
An event arising out of natural causes with no human intervention or could not have been prevented by reasonable care or foresight. Examples are floods, lightning, and earthquakes.
» Activities of daily living (ADL)
a. Transfer : Getting in & out of a chair without requiring physical assistance.
b. Mobility : The ability to move from room to room without requiring any physical assistance.
c. Continence : The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.
d. Dressing : Putting on and taking off all necessary items of clothing without requiring assistance of another person.
e. Bathing/Washing : The ability to wash in the bath or shower(including getting in or out of the bath or shower) or wash by any other means.
f. Eating : All tasks of getting food into the body once it has been prepared.
» Adjuster
A person who carries on the business of investigating the cause and circumstances of a loss and ascertaining the quantum of loss.
» Agent
One who solicits, negotiates or effects contracts of insurance on behalf of an insurance company.
» Annuity
A contract that provides for a stream of periodic income for a term dependent upon human life.
» Assignment
The transfer of ownership rights of a life insurance policy to another party.
» Automatic premium loan
A loan granted by a life insurance company to a policyholder using the cash value of the life policy to pay any premiums due at the end of the grace period of the same policy. The loan is automatic as allowed under one of the provisions in the life policy.
» Average Clause
Stipulates that an insurer is only liable for such proportion of the loss as the sum insured bears to total value at risk.
» Backdating
The procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the age at issue lower than it actually was in order to get a lower premium.
» Bonus
This is the extra money paid with the final benefit for participating policies. However bonuses are not guaranteed and depend on the performance of the insurance fund.
» Broker
One who represents an insured in the solicitation, negotiation or procurement of contracts of insurance, and who may render services incidental to those functions.
» Claim
Notification to an insurer that payment of an amount is due under the terms of the policy.
» Co-payment
A provision in a medical and health policy which requires the policyholder to bear the difference in room charges as well as other eligible benefits (usually 10% - 20%) described in the policy contract if the rate charged by the hospital is higher than the policyholder's eligibility.
» Contribution
The monetary consideration payable once or periodically by a participant to a takaful operator for his participation in the takaful scheme.
» Deductible
The portion of an insured loss to be borne by the policyholder before he is entitled to recover from the insurance company. Also known as excess.
» Disability
A condition that affects to some degree a person's ability to carry on his normal pursuits. A disability may be partial or total, and temporary or permanent.
» Disability benefit
The benefit payable upon the disablement of the life insured under a disability income policy or a provision of some other policy such as life insurance or takaful family plan.
» Dividend
Money made available to policyholders based on an insurance company's earnings and monetary surplus.
» Duty of disclosure
E.g. 'Full Disclosure of Material Fact', refers to revealing all your relevant details in your insurance application to the insurance company. Failure to do so may render your policy invalid.
» Endowment Insurance
A combination of protection and savings whereby the money will be paid at the end of a specific period upon your demise or if you suffer total and permanent disability.
» Excess
See deductible.
» Exclusion
A contractual provision that denies coverage for certain perils, persons, property, or locations.
» Expiry
The termination of a term life Insurance policy at the end of its period of coverage.
» Free look
A period of time (usually 15 days) during which a policyholder may examine a newly issued individual life or health insurance, and surrender it in exchange for a full refund of premium less expenses incurred for the medical examination of the life policyholder, if not satisfied for any reason.
» Grace period
A prescribed period, usually 30 days from the premium due date, during which an insurance contract is kept in force despite non-payment of premium. If premium is not paid within the grace period, the policy may lapse or be subject to reduced paid-up or automatic premium loan.
» Group Life Insurance
Life insurance covering a group of people under a master policy. The policy is issued usually without the requirements of medical examination on the lives assured. It is typically issued to an employer for the benefit of employees, or to members of an association.
» Incontestable Clause
A clause in a life insurance policy providing that after a policy has been in effect for a given length of time (one or two years), the life insurance company shall not be able to contest the statements contained in the application unless fraud can be proven.
» Indemnity
Restoration of the claimant to the same financial position immediately before a loss by payment, repair or replacement.
» Insurable interest
A basic principle of insurance that requires the person purchasing insurance to have an interest in the insured item or life insured in that the loss or damage to the item or life insured would result in a financial loss to the person.
» Insurance company
A company licensed under the Financial Services Act 2013 to carry on life or general insurance business or both life and general insurance business.
» Insured
The person whose life or health is covered by a specific policy.
» Investment-linked Insurance
A life insurance policy where the policy value at any time varies according to the value of the underlying assets at the time.
» Issue date
Also known as "Effective Date". The date that an insurance policy is approved.
» Lapse
Termination of a policy because of failure to pay the premium. This generally happens because the policy has yet to develop any cash value.
» Life insurance
An agreement that guarantees the payment of a stated amount of monetary benefits upon the death of the insured, or under other circumstances specified in the contract, such as total disability.
» Maturity Date
The date at which a life insurance policy has completed its full term and the face amount becomes payable usually with the condition that the life insured survives to that date.
» Maturity value
The amount payable to a living insured at the end of an endowment period or to the owner of a whole life policy if he lives past a certain age.
» Medical and health insurance
Insurance which provides specified benefits to cover medical expenses incurred against risks of persons becoming totally or partially incapacitated or hospitalised as a result of sickness or infirmity.
» Mortgage reducing term assurance
A policy that covers the repayment of the outstanding loan in the event of untimely death, disability or critical illness of the borrower.
» Multiple Insurance
Coverage from two or more policies which duplicate coverage of certain risks.
» Nomination
The act of naming someone as the nominee of a life or personal accident policy.
» Nominee
A person or persons named in a life or personal accident policy to receive the benefits under the policy.
» Non-participating policy
A type of life insurance policy or annuity for which the policyholder does not receive dividends or bonus.
» Paid-up Policy
A policy which does not require any future premium payments but which is not yet terminated by either death or maturity.
» Participating Policy
A policy which shares in the distributable surplus of a life insurance company by acquiring bonuses or dividends.
» Payer benefit
A rider or provision often found in juvenile policies under which premiums are waived if the person paying the premium, usually one of the parents, becomes disabled or dies while the child is still a minor.
» Policy Loan
A loan made by an insurance company to a policy owner of a part or all of the cash value of the policy assigned as security for the loan.
» Pre-existing condition
A coverage limitation included in many medical and health policies which states that conditions or illnesses that exist before the effective date of a medical and health policy, for which the insured is still receiving treatment or shown symptoms will not be covered under the policy. It doesn't matter whether or not the insured is aware of this condition.
» Premiums
The monetary consideration payable once or periodically by a policy owner to an insurance company in return for the insurance coverage provided.
» Pro Rata Rate
A rate charged for a period of coverage shorter than the normal period. An example, if an insured had coverage for only one quarter of a year, his premium would be only one quarter of the annual premium.
» Qualifying/Waiting Period
Most medical and health policies contain a waiting period for illness and disease, which means that eligibility for benefits under the policy will only start, says 30 days as the waiting period after the effective date of the policy.
» Reduced paid-up
A paid-up policy with a lower value of sum assured compared with the initial sum assured purchased. A policyholder with a policy that has acquired a cash value can opt to stop paying future premiums and convert his/her policy to a reduced paid-up policy.
» Reinstatement
Revival of a policy that has lapsed within a period of time under certain conditions.
» Rider
An attachment to a policy that modifies its conditions by expanding benefits.
» Scale of benefits
The scale of benefits refers to the amount of compensation payable by an insurance company in the event of injury to or loss of limb, sight or hearing. It determines the proportion of compensation vis-a-vis the loss suffered.
» Surrender
To give up a life policy. The insurance company pays the insured the cash value, if any, which the policy has built up if it is surrendered.
» Surrender Value
The amount available in cash upon voluntary termination of a policy before it becomes payable on death or maturity. Also called cash value.
» Term Insurance
Insurance payable only on death within a specified period.
» Total Loss
A loss of sufficient size so that it can be said there is nothing left of value.
» Twisting
The act of, or attempt threat, which induces a policyholder, to drop an existing policy and take another. A policyholder is usually worse off when his/her policy is twisted.
» Utmost good faith
One of the basic principles of insurance that essentially requires the policyholder to disclose all the material facts to the insurance company when proposing for a policy. This is in view that the insurance company normally takes on the risk by relying on the information given by the policy owner in the proposal form.
» Waiver
A rider waiving (excluding) liability for a stated cause of injury or sickness or a provision or rider agreeing to waive premium payments during a period of disability of the insured.
» Whole life insurance
Life-long protection and premiums are paid throughout your life and the money including any bonuses will be paid when you pass away or suffer total and permanent disability.