In the spirit of making every day better, we have created a glossary to help explain some of the unfamiliar terms of the industry that we have to use to ensure accuracy.
Our glossary will explain the meaning of the most commonly used terms in plain language, and is intended to help you understand insurance terms we use better. However, it is not intended to replace conversations with our agents or partners, who are equipped to help you make the right decisions for your needs.
The value of your investment in any or all the funds you own. This is equal to the number of units you own multiplied by the unit price of the fund.
Age Next Birthday
The age at your next birthday.
Attained Age
The age of the person at the current point in time
Automatic Premium Loan
This feature allows you to stay covered even if you have missed a premium payment. The money and interest are deducted from your cash value, which means that your benefits will be reduced if you don't restart your payments.
Beneficiary
This refers to someone who is entitled to receive money from an insurance policy. There are two main types of beneficiaries - primary and secondary.
For example, Mr. Wong takes a life insurance policy. He selects Mrs Wong (his wife) as the primary beneficiary and his only child, Alice, as the secondary beneficiary.
When Mr. Wong passes away, Mrs. Wong is entitled to receive the proceeds of the policy (or the 'death benefit'). If Mrs. Wong has also passed away then Alice, the secondary beneficiary, is entitled to the death benefit.
Benefit
The amount of money that Manulife will pay according to the terms of the insurance policy.
Cash Value
If your policy has cash value, this is the amount of money Manulife will pay you when your policy terminates, which is either upon maturity or surrender. .
Crediting Interest Rate
This is a rate declared by Manulife for Universal life policies.
The crediting interest rate is not guaranteed and may fluctuate depending on the investment performance.
Cool-off period / Cooling off period
This means you can cancel your policy if you change your mind without any financial penalty. It's usually limited to a short period of time e.g. 15 days.
Cover / Coverage
This is the amount of protection provided by the insurance policy.
Critical Illness
This expression has different meanings in different industries. When we refer to 'critical illness', we mean it refers to a serious physical or health issue (for example cancer, a heart attack, kidney failure or Alzheimer disease).
Different policies will cover different critical illnesses, so it's 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.
Death Benefit
The insurance benefit payable to the nominee in the event that the insured dies.
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.
Face Amount
The amount stated on the insurance policy that is payable as a benefit in the event of claim.
Free Look Period
The period that you are given to review your policy contract and may choose to return it to Manulife without any charges if you decide to cancel your insurance policy, typically within 15 days.
Grace Period
This is the period that insurance benefits remain payable after your premium due date, typically within 30 days. If the premium remains unpaid after the grace period, the insurance policy may lapse.
Group Insurance Policy
A type of insurance policy that insures a group of people such as employees of a company or members of an association under a contract.
Guaranteed Cash Payment
This is a fixed amount of money paid to you as the policy owner at regular intervals.
Guaranteed Issuance Offer
This is a hassle-free program that allows insurance application without having to answer any medical questions or provide any medical reports, if conditions are met.
Guaranteed Renewal Policy
This means that as long as you pay the premiums on time for your policy, Manulife will continue to insure you up to the end of the policy term.
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
Immediate family
The legally recognised parent, child or spouse of the insured.
Incontestability Clause
A clause that stipulates a given length of time (typically 2 years) during which the insurer may contest the claims if there is any misrepresentation in your insurance policy.
Individual insurance policy
A type of insurance policy that insures an individual life under a contract.
Initial premium
This is the premium required for the first payment under a new insurance policy.
Insurability
This refers to the eligiblity of you being insured by Manulife. It is typically based on consideration factors like health, age and risk profile before making a decision.
Investment-linked insurance
An insurance plan that combines investment and protection elements in one policy. The premiums payable are used to purchase investment units based on the fund(s) chosen. The charges of the policy would be deducted from the account value.
Issue age
The age use as basis to determine your premium when you buy an insurance policy.
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
Lapse
This means that you are no longer covered by your policy. It happens when you stop paying your premium after the grace period or when your policy's cash value is insufficient to pay for the applicable premiums or charges
Level premium
This is a type of life insurance where premiums stay the same throughout the contractual term of the insurance policy.
Life insurance policy
It is a contract between an insurer and a policy owner in which the insurer guarantees payment of benefit in the event of Total & Permanent Disability or loss of life.
Life insured
The person who is covered under an insurance policy.
Limited premium payment term option
This allows you to pay your premium for a specified period of time for your insurance coverage.
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The extra premium payable by the individual due to the higher risk.
Loyalty reward
This feature allows Manulife to reward your loyalty by giving additional units to the Investment Linked policy, subject to the policy meeting the terms and conditions set.
Maturity date
This is the pre-agreed date on which a policy term ends. A policy is no longer effective after its maturity date.
Net Asset Value (NAV)
The investment value of the insurance policy. The NAV per unit is determined by dividing the value of the fund by the number of units held in the fund.
Nominee
This refers to the person who is named to receive/administer the death benefit payable from the insurance policy.
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
Paid-up additions
When we issue dividends, you may wish to use these to get additional coverage instead of paying an additional premium. This is a good way for you to increase your protection without increasing your premiums. This is sometimes called paid-up additional insurance.
Participating policy
A participating policy is an insurance contract where you 'participate' in the profits of the insurance investment, which means that you may receive dividends. These profits are not guaranteed.
Permanent partial disability vs Permanent total disabilit
The term 'disabilities' can be classified as temporary or permanent, and as partial or total, depending on circumstances.
Temporary disabilities means that you are either unable to work full-time (this is called 'temporary partial disability') or unable to work at all for a period of time (this is referred to as 'temporary total disability'). In either of these situations, you are expecting to make a full recovery and return to work as normal at a later stage.
In the case of a permanent disability, you would never be able to work in the same capacity as before you were ill and/or injured. A permanent disability would prevent you from being able to work full-time for the rest of your life (this is called 'permanent partial disability'), whereas a permanent total disability means that the you will never work again.
It is important for you to understand which of these 4 types of disabilities are covered by your policy, so be sure to read and understand the terms and conditions.
Policy loan
A life insurance policy loan is just a loan from the 'cash value' of your policy. It is important that you keep up the payments on your loan so that we do not need to reduce the final pay-out.
Policy owner
A policy owner is the person in whose name the insurance policy is held and has full rights to the policy. Another term for this is 'policyholder'. So, if you buy an insurance policy under your own name, you’re the policy owner
Policy year
This refers to every 12-month period, starting from the day the policy becomes effective.
Policyholder
A policyholder (also known as 'policy owner') is the person in whose name the insurance policy is held. So, if you buy an insurance policy under your own name, you’re the policyholder.
Pre-existing condition
This is a health condition (either physical or mental) that is diagnosed before your 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
The amount required to be paid for your insurance policy.
Premium holiday
The option where you may choose to stop paying premiums for a period of time given that the account value of the policy is sufficient to cover the policy charges. In such event, the benefits payable under the insurance policy shall continue to apply.
Premium paying term
The term of the insurance policy (eg. years) that a policy owner will need to pay premiums.
Premium rate
The amount charged for your insurance policy which is typically calculated based on your age, gender and smoking status. The premium rate of a policy is non-guaranteed, unless stated otherwise.
Projected account value
The projected value that you may receive if you surrender the insurance policy and is net of policy charges.
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
Reduced Paid-Up Insurance
The use of available cash value to continue the insurance policy for a reduced amount of coverage
Reinstatement
The process of reviving a terminated insurance policy within a certain period, typically 6 months.
Rider
This refers to an additional and optional benefit to your insurance policy. A rider increases the level of your coverage and will usually increase premiums.
Risk Excluded
The coverage that is excluded from the policy benefit payable. It is important that you read your insurance policy terms and conditions to fully understand what are the benefits covered and excluded.
Risk profile
A tool used to determine your willingness and ability to take risks with the way you invest your money. It helps Manulife invest your money in a way that is appropriate for you.
Simple interest
There are two types of interest: simple and compound.
Simple interest calculates the interest on the initial sum invested, every year.
With a compound interest, Manulife will pay interest on the interest already earned and the initial sum invested, helping you grow your savings faster. This is the type we use to project Account Values in a variable life policy.
For example, you invest RM100 at 5% annual interest. In the case of a simple interest, Manulife will pay you RM5 every year. With a compound interest, Manulife will pay you RM5 in the first year. In year 2, you will earn an interest of RM5.25 (5% on RM105), and so on.
Surrender
This simply means to cancel your insurance policy and to receive any cash value of the policy.
Surrender value
The value that you will receive if you surrender the policy and is net of charges such as tax and surrender penalty. This means that the cash value received could be lesser than the total amount paid for your insurance policy if you surrender your policy prior to the maturity date.
Term life insurance
An insurance contract that provides death benefit and/or Total and Permanent Disability coverage to the insured for a defined period of time (example: 10 years).
Total and Permanent Disability
Totally unable by reason of accident or illness to independently perform activitites of daily living without the frequent attention of a third party, and in the opinion of Manulife such disability will remain permanent.
Total and Temporary Disability
A condition where the insured is totally unable, by reason of accident or illness, to independently perform activitites of daily living without the frequent attention of somone helping, and in the opinion of Manulife such disability is irrecoverable.
Underwriter
A person who evaluates the risk and makes the decision to accept or decline the insurance application. The underwriter typically impose a loading or extra premium to the insurance policy if the foreseeable risk is slightly higher than a normal healthy person.
Underwriting
The process that the underwriter takes to assess insurability and the level of risk Manulife can accept.
Universal life insurance
An insurance plan that combines investment and protection elements in one policy. The premiums payable are invested into a universal life fund and returns are in the form of crediting rate. The charges of the policy would be deducted from the account value.
Valuation Date
The date to determine the Net Asset Value.
Waiting period
The period where the insured must wait before being able to claim under the policy.
Waiver of premium
In the event that the insured is disabled or diagnosed with any covered critical illness, Manulife will waive all the premiums payable in the future.
Whole life insurance
An insurance contract that provides life insurance coverage for the entire life of the insured, typically up to age 80
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
We do not have entries at the moment. If you think we should include any term here, send us a note on insurancemadesimple@manulife.com and we’ll add it to our glossary.
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.
