The Jargon of Big 4

All of us are exposed to the risk of death, terminal illness, disability, and accident.

To date, no one able to answer whether tomorrow comes first or one of these "Big 4". Worse, we might have 1 free 1. Therefore, we sign Insurance policies to be financially secure in case of emergency.

Before you go "Haiya insurance ah?" and close this article, please be rest assured that there will be no hard-selling, cross-selling, or any form of conduct that you need to take out of your wallet.

Every industry has its special words used that others might not understand. Insurance is the same. However, insurance applies to everyone, and we would get ourselves at least an insurance coverage whether we like it or not.

There will be words in the policies that you may not understand but should know. This can save you plenty of time when you read the contract. Get to know these insurance's jargon beforehand so you can spend more time with your family instead:

1. Activities of Daily Living (ADL) - The main everyday basic routine that involves eating, dressing, mobility, transferring, toileting, and washing (bath).
2. Accidental Death Benefits - Extra money payable to us in our life insurance policy on top of the death benefit.
3. Annuity - This is almost the same as a pension. Insurance companies will pay policyholders regularly every year when we retire.
4. Beneficiary - A person who is eligible to get the benefits of the policy when it matures or in case of the death of the policyholder.
5. Bonus - Additional amount of money paid by the insurance company on top of the basic sum assured.
6. Capital Guaranteed - Confirm to receive the initial amount of your money on the maturity date.
7. Date of commencement - The day when our policy starts to cover us.
8. Dependant - Someone who depends on us for financial support. Example: Child younger than 18 years old.
9. Exclusion - A condition where benefits are not payable. Situations where insurance companies will not pay us. For example, self-inflicted injuries or hazardous sports.
10. Free Look Period - We can review the terms and conditions again even after signing a policy for a period of time (14 days).
11. Grace Period - Our policies continue to be in force even though we did not pay for the premiums. Additional time is given to pay back the premiums.
12. Guaranteed Issuance - Regardless of our health status, we are eligible to purchase the policy. However, it is common that pre-existing illness will be excluded.
13. Inforce - It means that we are covered by the policy from the start date to the end date of the policy.
14. Lump-Sum Benefits - "All out", everything will be paid back to us.
15. Maturity - The end date of a policy, time to collect money.
16. Nominee - Someone that was nominated to act on your behalf.
17. Non-Participating Policy - Policy that does not share the surplus of earnings. It would not get any bonus.
18. Participating Policy - Policy that has share earnings and pays a dividend to the policyholder.
19. Policyholder - The owner of the policy.
20. Policy Loan - Loan issued to the policyholder by the insurance company as collateral. Note that there will be interest charged for the loan.
21. Premium - Payment for the insurance cover.
22. Premium Waiver - Policyholders do not have to pay the premium under certain conditions., usually the Big 4.
23. Rider - Not our usual motor ride. It is an add-on benefit that allows policyholders to choose whether if they wanted to upgrade their policy coverage. The Rider cannot be bought as a stand alone plan.
24. Single premium - One lump sum payment to the insurance company.
25. Sum Assured - a guaranteed amount that the beneficiary would receive in case of the death of the insured.
26. Surrender - Canceling our insurance coverage.
27. Surrender Value - The amount of money that is paid back to us after cancelation. Usually, it would be much lower than what we have paid. Not recommended to do.
28. Total Permanent Disability - prevented and unable to work to get wages due to injury or illness.
29. Underwriting - It is a process that determines whether an insurance company wants to insure us or not. Pre-existing conditions normally will not pass.
30. Yield - Rate of return in the policy investment in percentage terms.

Much other insurance jargon was not stated above, the list goes on. However, these 30 should be able to get us through the basic understanding of an insurance policy. All jargon stated are interpreted in the simplest way to understand. By the way, jargon that used in investment plans are excluded in this article. It is best to clarify with your insurance agent if you are still having queries.

Hope this article helps in clarifying the jargon in your insurance policy. Take care and stay safe.

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About the author:

Felix Wong is a casual writer who writes about his experiences and thoughts in simple words. He believes in storytelling and views it is a powerful tool to get in touch with people. He enjoys listening to others' stories as he perceives that one cannot learn or have enough time to experience everything by themselves. We can learn from other's mistakes.

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