Wealth Management Education Series
Discover the World
of Insurance
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n Serie
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ent Ed
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Wealth
World
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of Insu
Managing your wealth well is like tending
a beautiful formal garden – you need to
start with good soil and a good set of tools.
Just as good soil has the proper fertility
to nourish a plant, the right foundation
in financial literacy should empower you
to cultivate a successful investment and
protection portfolio. Discover the World
of Insurance is part of our financial
education series to help educate you on
the fundamentals of investing and financial
protection as you tend to your very own
financial garden.
1
What is
Insurance?
Insurance can provide you with financial protection. It can
help you maintain your lifestyle in the event of serious illness
or accident. It can enable your loved ones to pay their
expenses if you can no longer provide for them. It can shield
you from losses if you experience an unexpected event like
a fire or theft.
In short, insurance can protect you from the things
that worry you most.
You can also use insurance to plan for large expenses that you
are anticipating later in life such as your children’s education
or your retirement. Some insurance plans are even designed
to help you meet your financial goals.
Most insurance plans are basically agreements between you
and the insurer. You pay the insurer a fee for assuming your
financial risk (premium). If a certain event occurs (insured
event), then the insurer pays you an agreed amount of money
(sum assured or benefit).
2
What is Insurance?
How can
Insurance help
you?
We live in an uncertain world in which we must constantly
adapt to difficult situations. Medical advances and improved
healthcare are helping us live longer.
You may find yourself asking:
What if I die too soon?
How will my family survive with food, medical, education and
other living expenses?
What if I live a long life?
Have I saved enough to live a comfortable life and pay my
bills after I retire?
What if I have an unexpected problem?
How will I cope with the costs and continue my lifestyle if a
serious accident causes my expenses to increase?
If you have these or other concerns, insurance can help
protect you, and the people and things that are dear to you,
from financial hardship.
Insurance Can Help
Dying too soon
Living a long life
Traditional Life Insurance
• Whole of Life
• Endowment
• Universal
Investment-Linked Life
Insurance
Term Life
Insurance
• Mortgage
Repayment
• Accidental Death
A
n
n
u
i
t
y
Unexpected problems
Health
• Disability Income Protection
• Total Permanent Disability
• Critical Illness Trauma
• Medical Expenses • Terminal Illness
General Personal
• Consumer Credit • Home Contents
• Unemployment • Motor Vehicle
• Helper • Travel • Golf • Pet
General Commercial
• Liability • Property • Employee Benefit
• Commercial Auto • Business Interruption
• Worker’s Compensation
3
What is Insurance?
A combination of the right insurance plans and features can
give you comprehensive coverage that
Helps shield you from the financial impact of events
such as accidents, critical illnesses or other unfortunate
incidents; and
Allows you to achieve your financial goals at the
same time.
The chart below shows how common types of insurance can
potentially address your concerns and provide investment
opportunities. You should consult your financial advisor,
who will be able to help you select insurance plans that can
best suit your needs and objectives.
Balancing Protection and Investment
Life Insurance
Key Functions of
Different Policies
Protection
How can insurance
address my concerns?
Term Life
Provide for your family if
you die too soon
Traditional Life
Provide for your family
when you are gone
Access to money when
no longer working
InvestmentLinked Life
Plan for retirement
Provide for children’s
education
Health & Medical
Hurt in an accident
Diagnosed with a serious
illness
General
Injured abroad
Credit card stolen
Get into a car accident
Fire or theft at home
Investment
Will there be any cash
returned to me during or at
the end of the policy term?
The cash surrender
surrend
urren
value
will depend
d on tth
the type of
policy and tenor
4
Life
Insurance
I am only looking for protection
against life’s unexpected events.”
5
Life Insurance
There are different types of life insurance plans. The one
that is right for you depends on your needs.
Term Life Insurance plans are the most straightforward
– they payout only when the insured event occurs (ie.
death).
Traditional Life Insurance plans payout when an
insured event occurs (ie. death) but they also include
a savings or investment component that allows part of
your premium to grow over time and provide you with a
return (if any) on your investment.
Investment-Linked Plans have a primary objective
of maximizing investment returns but they also provide
some insurance protection.
Life insurance policies may also have add-on plans,
which extend your insurance coverage for situations such
as serious injury or illness. Some add-on plans are free
while others you need to pay for. The section on Health
and Medical Insurance discusses common add-on
plans and additional policies that can help compliment
your life insurance coverage. Some common add-ons
are as follows:
Mortgage
Repayment
Insurance
This type of insurance is sometimes included with Term Life
Insurance plans. It pays off your mortgage if you pass away
so that your mortgage payments do not become a burden
on your family. The sum assured for Mortgage Repayment
Insurance can decrease each year by a set amount, or in line
with the amount that you owe on your mortgage.
Accidental Death
Insurance
Accidental Death Insurance is an add-on that may pay your
family an increased benefit if your death is caused by an
accident covered under the policy. Some plans pay out
extra benefits for specific accidents, such as if you die while
travelling on public transportation.
6
1
Term Life
Insurance
I want to make sure my family
is protected when I am no longer
here to do so.”
7
Term Life Insurance
These plans are generally considered in the market to be the most affordable life
insurance coverage. If you were to pass away, they protect your family when they
would be most vulnerable. The sum assured can stay the same or it can increase
by a fixed amount or percentage each year. Such plans do not have an investment
component, so you are not exposed to investment returns (or investment losses) if
the policy expires before the insured event occurs.
Some Term Life Insurance policies allow for all or part of the premium to be returned
to you if the insured event does not occur during the term of the policy.
Key Benefits…
Affordability
Premiums are lower than Investment-Linked Plans as
no investment component is included.
Security
These plans provide financial assistance when your
loved ones (and in some cases you) need it most.
Tax
These plans may provide certain tax advantages in
some countries.
Countries differ on the tax insurance benefits. Check with a tax advisor to
understand how your insurance plan will be taxed.
Points to consider…
Premiums
For Term Life Insurance plans, premiums are generally fixed for the term of the plan.
However, for some plans, the premiums may be subject to change.
Payment Interval
Premiums are usually payable at regular points in the policy term. However, “limited
pay” and “single premium” plans offer you the option of paying your premiums over
a shorter time or making a one-time premium payment.
Coverage Period
The policy term may be set to a specific number of years or to a certain age.
Prerequisites
Most life insurance products cannot be bought until the insurer decides you are
eligible and agrees to underwrite the risks of the plan as a result of your personal
circumstances which may require you to provide medical records or undergo a health
check. <see “Glossary” on page 27 > Insurers might offer a “Guaranteed Issue”
policy without a detailed review process, but they will not cover pre-existing medical
conditions.
Issuer Risk
The insurer must pay out the sum assured or accumulated cash value under the life
insurance policy. But, if the insurer faces financial difficulty then they may not make
the payments.
8
2
Traditional
Life
Insurance
My main objective is to seek
protection against unexpected life
events.”
9
Traditional Life Insurance
Traditional Life Insurance policies include an investment component, which
may allow you to achieve financial objectives while at the same time protecting
you. While the premiums for Traditional Life Insurance policies are higher than
Term Life Insurance, these plans potentially build up a cash value that you can
withdraw or borrow against. Your accumulated cash value (if any) usually depends
on how long you hold the policy. However, the exact calculation is set by the terms of
the policy you purchase. <see “Glossary” on page 27 “Accumulated cash value” >
Some common types of Traditional Life Insurance are Whole of Life, Endowment,
Universal Life and Annuity policies. Depending on your exact protection and
investment objectives, you can pick the type of policy that is right for you.
Whole of Life
(permanent
protection)
A Whole of Life plan provides cover for your entire life – it
never runs out. Upon death, the sum assured is paid to your
beneficiaries. These policies invest part of your premium,
which provides an accumulated cash value (if any) that you
can withdraw or borrow against.
Endowment
(limited time
protection)
Like other life insurance plans, an Endowment plan makes
a payout to your beneficiaries if you die while covered.
However, it also pays the sum assured to you on its maturity
date if you are still living. These plans have higher premiums
than other Traditional Life Insurance plans, but may be good
tools to help you prepare for large future expenses, such as
your children’s education or retirement.
Universal Life
A Universal Life plan generally consists of two components:
(i) life insurance and (ii) a cash account. The life insurance
portion of a Universal Life plan is actually an annual renewable
Term Life Insurance policy (see page 8). The cash account
builds up every year and earns a return at either a guaranteed
rate or at the current rate, whichever is higher.
Annuity
An Annuity gives you a regular stream of payments or a
lump sum payment in the future, usually at your expected
retirement age. Please note that such payments are not
guaranteed by the insurance provider. You must make
regular premium payments or a lump sum payment to your
insurer up front. An Annuity is usually offered as part of a
Traditional Life Insurance or Investment-Linked Plan.
10
Traditional Life Insurance
Key Benefits…
Cost predictability
Premiums are generally fixed for the duration of these
policies so you will know how much the insurance
will cost you each year. However, for some plans the
premiums may be subject to change.
Tax
These plans may provide certain tax advantage in some
countries.
Legacy planning
Beneficiaries receive a payout as long as premiums are
paid or there is sufficient value left to keep the policy in
force.
Access to Cash
These policies may build up a cash value, which you may
be able to borrow against or withdraw from the policy.
Cash value returned
If you wish, you can stop paying your policy premiums
and receive the cash value (if any) that has been
accumulated in the policy.
Cash Value put to work
You can use the cash value of the policy to transform the
policy into a Paid-Up insurance policy, which means that
you do not pay any additional premiums but the benefit
of the policy is reduced to reflect that. <see “Glossary”
on page 27 “Paid-Up insurance” >
11
Traditional Life Insurance
Points to consider…
Coverage Period
Life insurance cover is provided as long as the policy remains active. Whole of
Life, Universal Life, and Annuity plans generally cover you until the end of your life.
Endowment plans generally provide coverage for a set number of years, such as 10,
15, 20 or 25 years.
Customisable
Add-on Plans may also be available, giving you useful coverage for other events
such as serious illness or injury. (see page 19)
Cash Access
You may borrow against the cash value (if any) of your policy at the current loan rate.
You can also surrender the policy, which means that you no longer pay premiums and
the accumulated cash value is returned to you. But note that if you surrender your
policy early you will be charged high termination fees, and dividends will generally be
less than if the policy remained in force.
Issuer Risk
The insurer must pay out the sum assured or accumulated cash value under the life
insurance policy. But, if the insurer faces financial difficulty then they might not make
the payments.
Market Risk
The value of your investment may drop if the broader stock or bond market goes
down. It may also drop in response to common market risk factors, such as stock
prices, interest rates, foreign exchange rates, and commodity prices.
Sovereign Risk
Your investment returns may be affected by the political and economic events in the
country where the investment is made. For example, an issuer of a bond investment
may be forced to make payments in the local currency of the issuer’s country instead
of the original currency of the investment.
Foreign Exchange Risk
Some of your investments may be made in a foreign currency, which can change
in value when compared against your home currency. These foreign exchange
movements may reduce or wipe out your investment returns.
12
3
Life
Insurance
InvestmentLinked Plans
My main objective is to seek
investment returns but I would
also like some protection against
unexpected life events.”
13
Investment-Linked Plans
If your motivation for getting life insurance is geared more towards investment, then
Investment-Linked Plans (ILP) may be what you are looking for. These policies combine
investment and protection, to help you achieve your financial goals while providing
cover at the same time. Premiums are used to buy (i) life insurance protection and (ii)
investment units in professionally managed investment-linked funds, which may be
managed by the insurer or external fund managers.
Policies do not provide guaranteed cash values because the value of ILPs depends
on the price and performance of the underlying fund units and in some cases, the
value could be zero. Fees and expenses for ILPs are paid out of the premium or the
sale of purchased units.
Key Features of Investment-Linked Plans
Policy Features
Options
Premium
Single lump sum premium or
Regular premiums
Choice of Underlying
Investments
Insurer’s in-house investment funds
Third-party investment funds
Closed-end investment funds (single premium only)
<see “Glossary” on page 27 “Closed-end investment
funds” >
14
Investment-Linked Plans
Key Benefits…
Flexibility
ILPs offer you flexibility to:(i) top-up contributions on a regular basis or
whenever you wish;
(ii) withdraw from certain funds; or
(iii) switch investments among different funds.
Regular-premium ILPs also allow you to vary your level
of coverage or to pay premiums for short periods.
However, charges usually apply if you choose these
options.
Diversity
ILPs let you choose from a range of funds managed by
professional fund managers, allowing you to diversify your
investments and your risk.
Security
Once you buy an ILP, your insurance coverage is
guaranteed for the duration of the plan, even if your
health declines.
Points to consider…
Investment-Linked Plans can help grow your money but they can also expose you to investment risks. In some
cases, the value of your Investment-Linked Plan may be zero.
Issuer Risk
The insurer must pay out the sum assured or accumulated cash value under the life
insurance policy. But, if the insurer faces financial difficulty then they might not make
the payments.
Market Risk
The value of your investment may drop if the broader stock or bond market goes
down. It may also drop in response to common market risk factors, such as stock
prices, interest rates, foreign exchange rates, and commodity prices.
Sovereign risk
Your investment returns may be affected by the political and economic events in the
country where the investment is made. For example, an issuer of a bond investment
may be forced to make payments in the local currency of the issuer’s country instead
of the original currency of the investment.
Foreign Exchange Risk
Some of your investments may be made in a foreign currency, which can change
in value when compared against your home currency. These foreign exchange
movements may reduce or wipe out your investment returns.
15
Life Insurance
Which type of Life Insurance policy is right for me?
The chart below summarises the differences between the various types of common
life insurance policies. Your financial advisor can help you better understand the
specific differences between the plans and recommend a policy that best suits
your needs.
Comparison of Life Insurance Policies
Types
of Life
Insurance
Term Whole Universal
Life
Life
Life
Endowment
Plan
InvestmentLinked Plans
Death
Benefit
Flexible
Payments
Guaranteed
Cash Value
Depends on
the underlying
investment
Tax
Advantages
Maturity
Value
Optional
al
for sele
selected
plans
Optionall ffor
selected
ted plans
16
Life Insurance
How else do insurance policies differ from each other?
Each insurance policy may also offer different features, some of which are described
below
Common Policy Features and What They Mean
Types of Policy
Features
Explanation
Non-Participating
Whole Life
versus
Participating
Whole Life
Both offer fixed premiums through the policy term.
But they differ in their Cash Values:
• Most Non-Participating plans set a schedule of
fixed cash value at the start of the policy which
you receive upon policy anniversaries until the
maturity date.
• Participating plans pay you ‘dividends’, which
means you get a share of the insurer’s profits.
These ‘dividends’ may or may not be guaranteed,
and can:
- offset premiums;
- earn interest;
- increase insurance coverage; or
- be withdrawn as cash.
Limited Pay
Allows you to pay premiums for a set number of
years or up to certain age, while providing cover for
the entire policy term.
Premiums are generally higher given the shorter
period for premium payment.
Single Premium
Whole of Life plans where you pay the premium in a
single lump sum payment with no further payment
required.
These policies have immediate cash and loan values,
which can be significant but may decrease overtime.
17
Health and
Medical
Insurance
If I become seriously sick or
injured, I want to know that I have
financial protection.”
In their simplest forms, these plans provide cover for
a wide range of unforeseen personal events such as a
serious illness or accident. It should be noted that some
events may be excluded from certain plans. You can
purchase these plans on their own or together with life
insurance to expand your coverage.
Health and Medical Insurance plans do not have an
investment component. Some plans do, however, allow
for all or part of the premium to be returned to you if you
do not make any claims during the policy term.
18
Health and Medical Insurance
Common Health and Medical Insurance Policies and their
Key Features
Types of Policies
Total & Permanent
Disability
Disability Income
Protection
Critical / Trauma
Terminal Illness
Medical Expenses
Key Features
Pays benefit if you become disabled (e.g. loss of
limbs, blindness) or are unable to return to work
due to illness or injury.
Commonly available as an add-on to other life
insurance policies.
Pre-existing medical conditions or hazardous
occupations may disqualify coverage.
Adds to your income if you are unable to work
due to a disability from an illness or accident.
Benefits are usually paid monthly so that you can
maintain your standard of living and continue to
pay your expenses.
Can be tailored to meet your employment
situation.
Pays benefits if you are diagnosed with a
specified major illness or if you suffer a serious
injury, such as severe burns or loss of sight or
hearing.
Available as an add-on to other plans or standalone cover.
Premiums tend to be 3-4 times higher than
standard Term Life Insurance.
Offered as an add-on to life insurance or Critical
Illness Insurance.
Allows the policy to pay you the benefit if you
have less than 6 or 12 months to live.
The benefit is usually capped at a certain amount.
Covers the costs of hospitalisation, surgery, or
medical treatment.
Limits may apply to the amount of expenses that
are reimbursed.
The specific features of any plan will be determined by the insurance plan terms and conditions as provided by the
insurance provider and such features may not be consistent with the contents of the table above.
19
Health and Medical Insurance
Key Benefits…
Diversity
There is a wide range of products available that cover
serious illness and injury so you can tailor your insurance
plans to meet your needs.
Affordability
Premiums are lower than Traditional Life Insurance
because the policy does not usually cover death or
include an investment component.
Security
These plans provide financial assistance when you
need it most. They give you a financial safety net when
government or employer benefits and personal savings
may be inadequate.
Tax
These plans may provide certain tax advantages in
some countries.
Countries differ on tax treatment of insurance plans. Check with a tax advisor
to understand how your insurance plan will be taxed.
Points to consider…
Cost
For regular premium plans, premiums generally
(i) increase every year at each policy anniversary;
(ii) increase every five years; or
(iii) average out over the policy term.
Payment Interval
Premiums are usually payable at regular points in the policy term. But “limited pay”
plans enable you to pay your premiums over a shorter time.
Coverage Period
The policy term may be set to a specific number of years or to a certain age.
Customisable
Many products also allow several types of protection to be combined into one policy
and can extend coverage to several people at the same time.
Prerequisites
Most Health and Medical Insurance plans cannot be bought until the insurer decides
you are eligible and agrees to underwrite the risk of a plan as a result of a review
of your personal circumstances which may require you to provide medical records
or undergo a health check. <see “Glossary” on page 27> Insurers might offer a
“Guaranteed Issue” policy (usually in relation to accidents only) without a detailed
review process, but they will not cover pre-existing medical conditions.
20
General
Insurance
I don’t want to worry about
being inconvenienced when things
go wrong.”
21
Personal General Insurance
1
Personal General Insurance
Personal General Insurance plans protect you against losses arising from various nonlife events, for example, damage, theft, fire, natural disasters, or other emergencies.
There is no cash value to be returned at the end of the coverage period. General
Insurance plans may be renewed annually at the insurer’s discretion.
Common Personal General Insurance Plans and their
Key Features
Types of Policies
Home and Contents
Key Features
Covers your place of residence or home that you
lease to someone else.
Reimburses cost of repairs and third-party claims
for damages due to accidents.
Contents insurance covers theft or damage to
contents of insured property; usually as an addon to the main policy.
Motor Vehicle
Covers loss or damage arising from use of your
car or other motor vehicle (e.g. injury, property
damage, and medical payments)
(i) Property insurance covers damage to or theft
of car; and
(ii) Third-party liability insurance covers you
against claims from others.
Travel
Covers loss incurred during travel (e.g.
cancellation, delayed departures, loss of
baggage, theft, medical expenses, and accidental
death).
Available options include:(i) Single trip or annual policies; and
(ii) Personal or family member cover.
Certain hazardous locations, activities or medical
conditions may disqualify you from coverage (e.g.
skydiving or motor racing).
22
Personal General Insurance
Types of Policies
Consumer Credit
Insurance (or Payment
Protection Insurance)
Key Features
Repays loans in the event of death due to
accident, disability or job loss.
Covers wide variety of consumer loans (e.g. auto
loans, credit card debt, and personal loans).
Redundancy/
Unemployment Insurance
Directly pays specified companies that you owe
money to (eg. credit card debt or personal loans).
Maximum period of payment ranges from 12-24
months.
May also provide regular income during policy
period.
Coverage depends on terms of the policy.
Golf Insurance
Covers accidental loss or damage to golf
equipment and personal effects while golfing.
May even cover entertainment expenses following a
“hole-in-one”.
Domestic Helper Insurance
Provides comprehensive coverage for a domestic
helper employed in your home.
Protects against legal liabilities should helper or
third party suffer injuries in the course of his or
her work.
Pet Insurance
Covers veterinary costs when your pet is ill or
injured.
Some policies also include benefits in event of
pet’s theft or death.
The specific features of any plan will be determined by the insurance plan terms and conditions as provided by the
insurance provider and such features may not be consistent with the contents of the table above.
23
Commercial
General Insurance
2 Commercial General Insurance
Just like individuals, businesses need to protect themselves against risks or they
could face serious financial problems. Commercial General Insurance plans protect
businesses from many different types of risks. For example, malpractice or product
liability plans protect your business from lawsuits. Business interruption and property
insurance can cover losses from fire, flooding, or other natural disasters. General
Insurance plans may be renewed annually, at the insurer’s discretion.
I rely on the smooth running
of my business to serve my
customers and support my
employees. I want to keep it safe
from certain events.”
Common Commercial General Insurance Plans and their Key
Features
Types of Policies
General Liability
Key Features
Covers your business for personal injuries or
property damage that you cause other people
or businesses (e.g. a customer getting injured in
your store).
Includes the cost of defending and resolving
those lawsuits.
Errors and Omissions
Liability (“E&O”)
Covers mistakes that cause injury to other people
or businesses. (e.g. damages from an insurance
agent forgetting to file a policy application or a
notary filling out a notarization incorrectly).
Malpractice or
Professional Liability
Available for doctors, dentists, accountants, real
estate agents, architects, and other professionals.
Covers losses if a professional causes injury by
acting in a way other members of his profession
would not (e.g. a doctor making a mistake that
other doctors in his specialty would not have
made).
Pays the professional’s defence costs and any
judgment or settlement.
24
Commercial
General Insurance
Types of Policies
Directors’ and Officers’
Liability Insurance
Key Features
Bought by corporations and non-profit
organisations to cover the costs of lawsuits
against their directors and officers.
Property
Pays for losses and damage to real or personal
property (e.g. fire damage in your office).
You can insure your:
• Office including furniture, contents and fixtures;
• Commercial property building; Equipment
(e.g. computers and machinery); and Cargo/
Inventory (e.g. items shipped by air, sea or
land).
Commercial Auto
Covers the cars, vans, trucks and trailers used in
your business.
Pays if your vehicles are damaged or stolen or if
the driver injures a person or property.
Worker’s Compensation
Covers you for your employee’s on-the-job
injuries.
In some countries, businesses with employees
are required to carry some type of workers’
compensation insurance.
Business Interruption
Covers the cash flow and profit that is affected by
an interruption to your business.
For example, if key manufacturing machinery is
damaged by floods, the income that is lost due
to the two-month interruption to the production
schedule may be covered.
Employee Benefit
Covers health, dental, disability expenses, and
life insurance for employees and the company’s
directors or owners.
The specific features of any plan will be determined by the insurance plan terms and conditions as provided by the
insurance provider and such features may not be consistent with the contents of the table above.
25
General Insurance
Key Benefits…
Financial security and peace of mind
These policies provide financial protection against
unexpected events so you can continue to live your life
and run your business with limited consequences.
Affordability
Premiums are generally more affordable as there is no
investment component.
Tax
These plans may provide certain tax advantages in
some countries.
Broad range of coverage
Despite their lower premiums, these policies may still
provide a significant amount of cover, especially for
third-party liability claims.
Security
These policies may function as a financial safety net,
allowing you to potentially avoid out-of-pocket costs.
Customisable
Many products allow several types of protection to be
combined into one policy.
Countries differ on tax treatment of insurance plans. Check with a tax advisor
to understand how your insurance plan will be taxed.
Points to consider…
Payment Intervals
Premiums are typically paid once a year. They may increase on renewal or be raised
by the insurer if you make a large number of claims. If you do not make any claims
in the preceding year, then you may receive a “no claims discount”.
Coverage Period
Policy terms usually last one year.
Prerequisites
Underwriting <see “Glossary” on page 27> is usually required and the insurer will
assess your eligibility for cover based on potential risk factors.
No Cash Value
These policies do not carry a cash value.
26
Glossary of Insurance Terms
Benefit
Payout from the plan if the event that you have insured against
occurs. This is also known as “sum assured”.
Accumulated cash Some insurance policies have an accumulated cash value. This is
value
the balance that is left in your insurance policy after policy related
expenses are paid and interest is calculated. You may borrow against
the accumulated cash value (if any) without affecting your insurance
coverage. If you cancel the policy, you may take out the accumulated
cash value (if any), although you may need to pay penalties.
Claim
Request for the insurer to pay out the sum assured as agreed in the
policy.
Closed-end funds
These investment funds issue only a fixed number of shares, and
do not issue new shares even if investor demand grows. Share
purchases take place in the secondary market and prices are
determined by investor demand. Shares of these funds are often
traded at a premium or discount compared to the fund’s net asset
value. Further, such funds usually do not allow investors to redeem
prior to a stated maturity date.
Deductible/Excess First portion of claim amount that the insured must pay. The insurer
will pay out the remainder up to the claim limit.
Dividends/
Bonuses
Some plans, such as Traditional Life Insurance plans offer an annual
bonus payment that may be withdrawn at your discretion. Dividends
and bonuses usually take time to become available and if cashed
early they may not be worth their full value.
Paid-Up insurance This feature is only available for Whole of Life plans. When you have
accumulated enough cash value from your premium payments,
you can stop paying your premiums for a time and keep your life
insurance coverage.
Policy
Another name for your insurance plan.
Policy term
Length of time the insurance plan is in effect.
Premium
Fee that you pay to the insurer. Premiums may be regular or oneoff.
Add-on
Add-on plans (sometimes known as riders) extend the cover of your
insurance plan. Some add-on plans are available free-of-charge and
are a good way to help you gain more protection.
Underwriting
Way to determine the eligibility of the person to be insured. Commonly
determined through health check ups, personal background checks,
and previous claims history.
27
Important Legal Information
In Brunei Darussalam, Standard Chartered Bank (“SCB”) is registered as a branch office
and is licensed and regulated by Authoriti Monetari Brunei Darussalam.
This document contains material and information from sources that we believe are reliable.
The general products we describe are not suitable for everyone. We provide this document
for general information and educational purposes only and emphasize that you should not
use this information as the basis for making any decisions to purchase an insurance plan.
We can change the opinions we hold without notice.
This document is not an offer, solicitation or invitation to purchase any insurance products
and services. If you are in doubt about any of the contents, you should seek independent
professional advice.
You may not copy any part of this document in any manner without SCB’s written
permission.
28
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Contact your Relationship Manager, or any of our Standard Chartered Bank locations closest to you for
more information.
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