ML AIM Agency Sdn. Bhd.

THE BEST AND FASTEST WAY TO CLEAR YOUR DOUBTS IS TO CALL ML AIM AGENCY , CARRIAN LAI OR HER FINANCIAL PLANNERS FOR ACCURATE ADVISE AND ANSWER.

Q1: Do I get basic pay as a financial planner?
A1: You have two options : fully commission( no basic) or basic (up to RM2K) with commission. (selection interview with carrian lai )

Q2: What is financial planning?
A2: To plan for future financial security and peace of mind; according to yr own budget.

Q3: What is the differences between medical and critical illness plans?
A3: Medical Plan is a policy that covers the cost of medical treatment, such as hospitalization and
healthcare services. Included in the policy usually are hospital room and board, surgery fees and
medical supplies and services.

      Critical Illness Plan is a policy that provides financial support that is needed as a result of
      critical illness. The plan covers the insured for the 36 most common critical illnesses, death and
      total disability as well as permanent disability. The plan usually pays a lump sum assured in
      order to ensure expenses, such as rehabilitation, outstanding loans or mortgage, childcare and
      other household expenses are paid for.

Q4: If I have already owned a medical plan, should I buy another critical illness plan?
A4: YES. The value of investing in both policies is that the customers would then have sufficient
      coverage that protects them against financial hardship when faced with critical illness and their
      family will also financial assistance, without which will cause financial hardship and possibl
      emotional trauma. Having only one of either plans means that your customer has limited
      protection that is subject to policy type, coverage inclusion and sum insured.

Q5: Why retirement planning?
A5: Retirement is a major chapter in our lives. For many, our retirement days could make up as
      muchas 30% of our lifetime - almost as long as our working years. Given its importance,
      we should spend some time planning ahead carefully. Ask yourself:
      - Can you earn an income without working for it?
      - Can you risk putting your retirement investment into the equity market?
      - Which retirement portfolio works harder for you?
      Don't worry, all you have to do is to call us and we have all the solutions for you.

Q6: Why should I join AIM Agency?
A6: Success breeds Success. That's us. We have produced many achieves in the industry.
      Ordinary people who have gone on to become successful entrepreneurs in their own right.
      If you have the talent, drive and desire...we provide the right platform for you to realize
      your wildest dreams. In AIM, it has always been about you. It will always be.

Q7: Why should I choose AIA?
A7: American International Assurance Bhd (AIA Malaysia) began operations in Malaysia in 1948
      in Kuala Lumpur as a branch of American International Assurance Company, Limited (AIA).
      With AIA's 60 years of market presence in Malaysia, AIA Malaysia has now become one of
      the country's largest life insurers, with a network of 23 branches nationwide and over 1,000
      employees and 8,000 agents. AIA Malaysia markets a full line of life insurance products
      through a multi-channel distribution system, whose core franchise is an extensive agency
      force. The company's focus is on designing new, innovative products to meet the charging
      needs of the market.
      AIA is a wholly-owned subsidiary of American International Group, Inc (AIG), a world leader
      in insurance and financial services.

Q8: Why do I need life insurance?
A8: Insurance serves as a financial safety net should something untoward happen to you. Insurance compensation will help your dependents to tide things over in a time when funds are low. From The AIA Life Matters survey, ONE among almost every five Malaysians stand to face serious financial difficulties within just 3 months if he or she is forced to stop work through illness or accident. This is where insurance plays an important role in providing an emergency fund.

Q9: Which plan is right for me?
A9: It all depends on the person's financial objectives and affordability. For example, a traditional whole life plan emphasises on protection whilst a traditional endowment plan offers protection which comes with a savings element. Thus, the premium for endowment plan is much higher than a whole life plan for the same amount of coverage. Other than traditional life policies, there is also option for investment-linked type of insurance policies which allows policyholders to determine the level of participation in equity market via the choice of fund(s) based on the risk appetite of the individual. Therefore, it would be a good idea to discuss with your financial planner the different options available.

Q10: Am I insurable?
A10: Your insurability depends on three main risk factors:
i) Medical risk factors - built, personal medical records and family history
ii)Personal risk factors - occupation, moral hazard, avocations, hobbies, international residence
etc.
ii) Financial risk factors (insurance coverage applied vs financial needs / income)

The final decision of acceptance lies ultimately with the underwriters.

Q11: How much will it cost?
A11: It depends on factors such as your age, sex, health status, occupational risk, type of plan and sum assured purchased. Most importantly, you should satisfy yourself that the plan purchased will best serve your needs and that the premium payable is an amount you can afford.

Group Employee Benefits FAQs

1. My company is self-insured. Why should I get Group Insurance?
There are many benefits of group insurance.

2. What is the difference between Group Hospital & Surgical (GHS) and Managed Care?
GHS plans are on a pay and file basis. Members may go to any hospitals and they would have to pay first and claim back later. Members of Managed Care plans are provided with a health card and they may choose from a panel of pre-selected medical providers.

3. I do not want any of the packaged products. Any alternatives?
Depending on your group size, we can customise a plan to suit your needs.

4. Are there any exclusions in these plans?
Yes, all common exclusions are stipulated in the policy contract.

Home Loan FAQs

1. What is your interest rate?
Please refer to our Terms & Conditions section for more specific details. All packages are for a limited time period only.

2. What are the benefits of the Fixed Rate Loan?
Fixed Rate Loan offers peace of mind by locking in at a fixed rate so your monthly instalments are constant throughout the duration of the loan. Otherwise, fluctuating interest rates may exhaust your financial resources as an increase in monthly instalments can be a burden especially when other costs of living are on the rise too. Although some financial institutions do not increase your installments, when the interest rate rises, the duration of the loan is extended as your installments are insufficient to cover the increased monthly interest which will eventually increase your principal loan outstanding. In AIA HOME LOAN you are in absolute control of the interest rate and installment. So, personal financial planning can be charted for a clearer financial future for you and your family.

1. Does AIA charge prepayment fee?
There will be a prepayment fee levied should the loan be refinanced within the first five years from the date of the first drawdown. The prepayment is chargeable at the rate of 0.35% times the number of remaining years of Loan (not exceeding 4% subject to a minimum rate of 2%) times the amount prepaid. However, there is no prepayment charged when the loan is repaid with own savings, EPF or sale of property which makes it more cost-effective for customers who would like to settle their loan faster if they have additional cash.

1. What types of properties do you finance?
Completed landed residential properties e.g. single, double-storey link, semi-detached, bungalow, etc. We also financed properties under construction. This applies only for selected developers and projects. For further information, please refer to our terms and conditions.

2. Do you finance condominiums and townhouses?
Only selected condominiums and townhouses with or without strata title issued in Penang Island and Klang Valley.

3. Do you finance shop lots or industrial lots?
Our loan is currently open for residential properties only.

4. Can you finance a property located out of Klang Valley e.g. property in Melaka?
Yes, our program is tailored for properties within the Klang Valley, Penang / Seberang Perai, Johor Bahru, Batu Pahat, Seremban, Sg. Petani, Kulim, Ipoh, Kuantan, Malacca Town, Kota Kinabalu and Kuching Town.

1. Do you refinance properties?
Yes, we refinance properties that are encumbered or currently charged to another financial institution. Our margin of finance is between 70% - 80% of OMV (Open Market Value). The purpose for refinancing is to redeem the outstanding balance of your existing financier. Additional cashout for other purposes such as renovations, education and any other commitments are considered with the exception of business investments.

2. My property is currently encumbered, can I refinance the property for personal requirements?
Yes.

3. Do you finance construction of a house if my land has already been paid off?
Not at this present moment. Currently, our program finances completed landed residential properties and selected properties under construction by selected developers only.

1. If I am not an AIA policy holder, can I apply the loan?
Yes, as long as you are a Malaysian Citizen. However, you will need to purchase an AIA Group Mortgage Reducing Term Assurance or AIA Life Policy to secure the loan. The insurance policy is to provide protection and peace of mind to your family when calamity befalls such as death or permanent disability. In some instances, the savings from our low interest rate compared to other financial institutions helps to subsidize this repayment.

2. If I have existing Life policies with other insurance companies, can I assign them to AIA?
Since this is a unique HOME LOAN package from AIA, the policy must be from AIA.

3. I am married, can I apply as a single applicant?
It is one of our terms that your spouse be a joint applicant. Both husband and wife are to be joint borrowers. Exceptions can be considered.

4. Is a valuation report required?
Yes, a valuation report is required by our panel of valuers once the loan is approved.

Valuation is only waived for properties under construction or recently completed properties purchased from selected developers.

5. Can we have our own solicitor’s firm to prepare the loan documentation?
You are required to use the solicitors on our panel.

6. I am healthy and I do not wish to buy insurance.
Health is fragile. Our well-being cannot be guaranteed in the next five or 10 years time. Life insurance, either a Mortgage Reducing Term, Life or combination of both provides the necessary funds for your family to settle the mortgage in times of need. As such, the unique AIA HOME LOAN protects you from fluctuating interest rates, fire, life and permanent disability.

7. Can I assign my existing AIA policy instead?
Yes. However, the coverage of the policy must not be less than the mortgage loan amount.

8. You can always sell my house if anything happens to me. After all, is the house not sufficient security?
AIA would rather not recall the loan and the property. A home is needed as a means of shelter. We are in the business of helping homeowners to protect themselves and this is the reason the unique AIA HOME LOAN helps you to achieve this objective.

9. Is Life Insurance or Group Mortgage Reducing Term assurance expensive?
We have a variety of life policies to suit your needs and our agent will assist in planning according to your requirements.

You can even opt for Group Mortgage Reducing Term assurance which involves only one lump sum payment and this insurance will cover you for the entire loan period. It is the most affordable form of insurance. Depending on your age and loan amount, it can be as little as RM18 a month.

10. If this is a joint loan application, how must we insure ourselves?
Required insurance will be based on the income of both applicants. For example, if the husband is paying for the loan, then insurance on the loan amount is to be taken by the husband. However, the proportion on insurance will depend on the income earned.

Husband’s income RM8,000 (8)/10 RM200,000 x 8/10 = RM160,000
Wife’s income RM2,000 (2)/10 RM200,000 x 2/10 = RM40,000

Health Services FAQs

1. What are the services provided by AIA Health Services for the AIA Platinum Card / AIA Care Card?
AIA Health Services will facilitate the issuance of Guarantee Letter for hospitalization for eligible members and will answer telephone enquiry received on the AIA Health Services hotline.

2. Is AIA Platinum Card/AIA Care Card recognized by the hospitals?
Yes, AIA Health Services Panel Hospitals within Malaysia has close working arrangement with AIA Health Services.

3. What should I do when I have to be admitted for medical treatment?
Refer to the 4 simple steps at the back of your AIA Platinum Card/AIA Care Card.

Prior to your admission, contact AIA Health Services to inform them of your admission. Also inform the panel hospital that you have the AIA Platinum Card/AIA Care Card. You will be required to fill up the necessary documentation and the hospital staff shall assist to send it to Health Services in order for them to process your request. Once there is confirmation of your policy and eligibility, AIA Health Services will issue a guarantee letter to the hospital you will be admitted to enable a smooth admission process.

4. Will the hospital accept my AIA Platinum Card/AIA Care Card as a guarantee of admission deposits?
The AIA Platinum Card/AIA Care Card is not a credit card and therefore will not be accepted by the hospital as a guarantee. The card is to facilitate the hospital to recognize you as an AIA policyholder.

5. Do I have to place any admission deposit?
Some hospitals may require deposits upon admission. This is refundable by the hospital upon discharge after deducting the deductible or co-insurance amount and non-covered charges.

6 .Once AIA Health Services has agreed to settle my hospital bills, will I still incur any charges?
AIA Health Services will guarantee for the expenses incurred which fall within your policy’s benefit limit. You may be required to pay the deductible and co-insurance amount, any excess charges and charges that are not covered under your policy (telecommunication, extra meals, miscellaneous expenses, service tax, braces, special aids, etc.).

7. In an emergency, which hospital should I go to?
In case of emergency, please proceed to the nearest AIA Health Services Panel Hospital where possible, or any other hospitals. For admission to a non-panel hospital, you will have to settle the hospitalization bill and submit the claim to AIA for processing in accordance to the term and conditions of the policy contract.

8. Can I enjoy the services of AIA Health Services when I am abroad?
No. The AIA Platinum Card / AIA Care Card is only applicable to AIA Health Services Panel Hospitals in Malaysia. You would need to file a claim directly with AIA for claims incurred out of the country. This claim will be assessed in accordance to the terms and conditions of the policy contract.

9. Where can I obtain the hospitalization claim form?
This form can be obtained at the AIA Health Services Panel Hospital, or from your agent or any AIA branches. The fee charged, if any for the completion of the hospitalization claim form, shall be borne by the Insured.

10. How long before my admission must I inform AIA Health Services?
To provide sufficient time for AIA Health Services to process your request, it is recommended to request from your attending doctor to complete the Section II of the Hospitalization Claim Form, and furnish this completed form to AIA Health Services while you are still in the clinic.

11. If I am unable to provide the completed forms filled by the doctor, will AIA Health Services still assist to settle my hospital bills?
AIA Health Services would need the completed documentation to establish your eligibility. Without this requirement, we will not be able to process your request. You can seek the assistance of your agent or family members to provide this completed form while you are hospitalized and if confirmation can be obtained prior to discharge, AIA Health Services can still assist to guarantee your hospital bills where eligible.

12. Precisely how long do I have to wait in the hospital after the doctor has certified I am fit for discharged?
Normally, the attending doctor will need to settle the paperwork and to complete the Hospitalization Claim (discharged column) before hospital billing staff can prepare your hospitalization bills. This whole process averagely takes 1-3 hours before AIA Health Services receives the hospitalization bills.

13. How long will it take before AIA Health Services can confirm the settlement of my hospital bills?
The time taken to confirm the eligibility would depend on the documentation received. Normally, for straightforward cases with the complete documentation, confirmation of settlement can be given within 1 to 2 hours. However, if the documentation is not complete and information cannot be obtained, it may require a longer period or until we receive the necessary documentation

14. In the event I am discharged before any confirmation can be obtained, what should I do?
Under such circumstances, you have an option to either wait for AIA Health Services to approve the guarantee letter (your discharge) or you can settle the hospitalization bills and file the claim directly with AIA after your discharge. The claims will be adjudicated in accordance to the terms and conditions of policy contract.

15. Under what circumstances would I have to settle my own hospital bill?
There could be several reasons when you may have to settle your own bills.
Just to list a few :

16. Where can I obtain information regarding AIA Health Services Panel Hospitals?
Please contact our Customer Services Executive using the speed-dial as enclosed for assistance. Alternatively, you may view this information via our corporate website: - http://www.aia.com.my/prod_health.htm

Credit Life FAQs

1. Do I really need GMRTA?
Yes, the AIA GMRTA Plan is designed to settle any outstanding mortgage balance should untoward incidents like death or total permanent disability happen. Therefore, your family and your home will be securely protected.

2. What is the difference between GMRTA and Life Insurance Plans?
Currently, life insurance plans in the market do not specifically cover your progressively reducing outstanding mortgage balance. Instead, they work on fixed amounts of coverage. The GMRTA Plan is designed to handle the reducing mortgage balance, thereby helping you save on the premiums. However, this is only applicable to mortgage loans.

3. Will the GMRTA premium increase my loan repayment?
Yes, but only a little. In most cases, the single premium payment is added to the loan and amortised over the loan tenure period. You will hardly notice the difference.

4. What are the application procedures?
Simple. Just complete the application form and send it to AIA Credit Life Department for coverage processing.

5. Who will bear the cost of medical examination if it is required?
AIA will pay for the medical examination fees for policyholders only.

6. When does my protection start?
When your application is approved, a confirmation letter plus a request for payment will be sent to you by AIA. Protection is effective upon receipt of your payment.

7. How do I make a claim?
Once AIA accepts and approves your claim, the insurance proceeds will be paid directly to the financial institution to offset the outstanding mortgage loan.

Glossary
A

Absolute assignment. A procedure in which a policy owner transfers all rights of policy ownership to another person or organization. Absolute assignment is irrevocable.

Anti-selection. The tendency of people with a greater likelihood of loss to apply for or continue insurance to a greater extent than others.

Application. A form which must be completed by an individual or other party who is seeking insurance coverage. It provides the insurance company with information relevant to the decision to accept or reject the risk. It is usually attached to and forms part of the policy. Also called a proposal form.

Assignee. The party to whom all or certain rights are transferred under an absolute assignment.

Assignment. The legal transfer of ownership rights under a life insurance policy or other contract from one party to another.

Attained age. The current age of the insured. The age of the insured at the time the insured party's policy was issued plus the number of years elapsed since the policy was issued.

Attending physician's statement (APS). A report from a physician consulted by the proposed insured either for routine physical examinations or for specific health problems. The report provides the company with information relevant to underwriting the risk or settling a claim.

Automatic premium loan (APL). A policy loan authorized in advance by the policy owner to be used only to pay a premium which remains unpaid at the end of a grace period. Also see non-forfeiture options.

B

Basic policy (or coverage). The primary insurance coverage that must be purchased by the insured before any other coverage or supplementary benefits.

Beneficiary. The person/s or other entity designated to receive policy proceeds. See also irrevocable beneficiary and revocable beneficiary.

C

Cash surrender value (CSV). Subject to a policy being in force for a number of years, the amount of money which will be refunded if the policy owner cancels the coverage and surrenders the policy to the company. Also referred to as cash value or surrender value.

Cashout. The extra amount of loan requested in addition to the previous outstanding loan balance.

Certificate of insurance. A document which is given to insured members of a group insurance plan and which outlines the plan coverage and member's rights.

Conditional binding receipt. A premium receipt which immediately binds the insurance company to a temporary contract of insurance, provided the conditions stated in the receipt are fulfilled, until the insurer either rejects the application or approves it and issues the policy as applied for.

Contestable period. The time limit during which an insurer may contest or challenge the validity of a policy because of misrepresentation in the application. The length of the period is specified in the incontestability provision of the policy.

Conversion privilege. A provision in an insurance policy that gives an insured the right to convert coverage from one policy to another, such as from a term policy to a permanent plan of insurance.

Counter offer. The insurance company may issue an alternative offer to an applicant if it cannot accept the insurance as applied for but may offer insurance at a different plan, amount or higher premium on account of the applicant's health, occupation, income or living conditions.

Coverage. The guarantee against specific losses provided under the terms of an insurance policy. The terms coverage, insurance and protection are frequently used interchangeably.

D

Death claim. When an insured dies, the person entitled to the proceeds must complete certain claim forms giving due proof of the death and establishing the claimant's right to such proceeds. When filed with the company, the company is said to have a death claim.

Disappearing premium option (DPO). A premium payment option elected by a policyholder who is covered under a participating policy. Out of pocket premium payment is no longer required after a critical year is reached by automatic annual premium deductions from past dividend accumulations or future dividends. Also known as vanishing premium option.

Dividend. It is a share of the surplus earned which is apportioned for distribution and reflects the difference between the premium charged and the actual experience. Also called policy dividend.

Dividend option. One of several choices available to the owner of a participating policy concerning the disposition of the policy owner's share of the insurance company's divisible surplus. Common options are cash payment, premium reduction, dividend accumulation and paid-up addition.

Dread disease rider. This rider provides specified benefits in the event that the insured is diagnosed to be suffering from a dread disease, such as cancer or stroke, which is named in the policy.

E

Endorsement. A provision added to a policy, usually written on the printed page or in the form of a rider. No endorsement is valid unless signed by an executive of the insurer and attached to and forming a part of the policy.

Endowment insurance. This is a combination of protection and investment. Endowment periods are usually for 10, 15, 20, 25 or 30 years or until age 55, 60 or 65. Premiums are payable until maturity of the policy or prior to death of the insured. The face amount is payable at maturity or upon the death of the insured.

Evidence of insurability. The evidence describing the risk of the proposed insured. In life insurance, it is concerned mainly with the health details of the insured.

Exclusion clause. Provision of part of the policy contract limiting the scope of the coverage. Also refers to certain clauses and conditions listed in the policy, which are not covered.

Extended term insurance (ETI) option. A non-forfeiture benefit under which the net cash value of the policy is used to purchase term insurance for the amount of coverage available under the original policy for a limited period.

F

Face amount (FA). The amount stated in the policy as payable at the death of the insured or at the maturity of the contract. The amount is generally shown on the first page of the policy. Also known as face value or sum assured.

Flat extra premium. A method of rating a sub-standard life insurance risk when the extra risk is considered to be constant or temporary.

Future premium deposit fund (FPDF). Advance deposits made by the policyholder for future premium payments. Deposits will accrue interest at specified interest rates.

G

Grace period. The length of time (usually 31 days) after a premium is due and unpaid during which the policy including all riders, remains in force. If a premium is paid during this time, the premium is considered to have been paid "on time".

Group insurance. An insurance plan by which a number of employees (and their dependents) or other homogeneous group, are insured under a single policy, issued to their employer or leader with individual certificates given to each insured individual or family unit.

H

Health certificate. A statement which is filed together with a request for reinstatement of a lapsed policy. It is concerned with the health of the insured as of the date of the statement.

Hospitalization benefits (HB) rider. This rider provides a fixed daily income benefit when the insured is hospitalized.

Hospital & surgical (H&S) rider. This rider provides benefits related directly to hospitalization costs and associated medical expenses incurred by an insured for treatment of a sickness or injury.

I

Incontestability provision. A provision that specifies a time limit on the insurer's right to dispute the validity of a policy based on material misstatements in the application.

Insurable interest. A condition in which the person applying for an insurance policy and the beneficiary will suffer an emotional or financial loss if the event insured against occurs.

Insured. An individual or business organization protected in case of loss of property or life under the terms of the insurance policy. Also called assured.

Irrevocable beneficiary. A named beneficiary whose rights to life insurance policy proceeds are vested and whose rights cannot be revoked by the policy owner without the beneficiary's consent.

J

Juvenile lien endorsement. An endorsement attached to policies issued on children below four years of age. It states the graded death benefits payable at the time of claim, typically from 20% to 80% of the face amount for the insured in that age group.

Juvenile policy. An insurance policy which is issued on the life of a child.

K

Key-man insurance. Life insurance purchased by a business on the life of a person (usually an employee) whose continued participation in the business is viewed as necessary to the firm's success and whose death or disability would cause financial loss to the firm.

L

Lapse. Termination of a policy due to non-payment of renewal premiums. If the policy has cash value, then the coverage may remain effective as extended term or reduced paid-up insurance through the application of a non-forfeiture option.

M

Major medical insurance. A type of medical insurance for hospital, surgical and medical bills according to specified terms and conditions.

Master contract. A life insurance policy that insures a number of people under a single insurance contract. A contract between an insurer and a group policyholder in which the individuals insured are not parties to the contract.

Maturity date. The date on which a matured endowment policy has reached the end of its term and becomes payable.

Misrepresentation. The act of deliberately making false or misleading statements of material facts concerning an insurance application.

Misstatement of age or sex provision. Individual insurance policy wording which gives the insurer the right to modify the policy benefit amount if the insured's age or sex misstatement has resulted in an incorrect premium for the amount of insurance purchased.

Mortgage Reducing Term Assurance (MRTA). A type of reducing term insurance which covers the life of the person taking out the mortgage so that if death occurs during the term of insurance, the policy proceeds will approximate the remaining amount of the loan.

N

Net cash value. The cash surrender value available to the policyholder after adjustments have been made to account for policy loans and dividends.

Non-forfeiture options (NFO). The choices available to a policyholder to apply the cash value if the policy lapses. The typical options are cash surrender, extended term insurance and reduced paid-up.

Non-forfeiture values. The benefits that the insurer guarantees to the policy owner if premium payments are stopped as printed in a life insurance policy. These amounts may be used in a variety of non-forfeiture options.

Non-participating policy. A life insurance policy which does not participate in the company's surplus.

Non-smoker discount (NSD). A discount on premium granted to a healthy individual who is applying for specific life insurance policies.

O

Occupation class. Class of occupations that present a similar risk to an insurer. If all other factors are equal, people in the same occupation class will pay the same premium rates.

Offer and acceptance. In life insurance, the "offer" may be made by the applicant through signing of application, submitting to a medical examination and pre-payment of the first premium. Policy issuance, as applied for, constitutes "acceptance" by the insurer. Alternatively, the "offer" may be made by the insurer where no premium payment has been submitted with application and medical examination. Premium payment on the offered policy then constitutes "acceptance" by the applicant.

P

Package policy. A type of policy which contains permanent basic coverage, as well as other inherent coverages or supplementary benefits with insurance amounts, in a pre defined ratio to the basic amount. It must be sold as a package to the insured.

Paid-up additions (PUA). Additional amounts of insurance purchased using dividends. These amounts require no further premium payments.

Paid-up (PU) policy. An in-force policy for which no further premium payments are required.

Partial disability. Partial loss of function as a result of an injury or disease which partially incapacitates an individual from carrying out his or her work.

Participating policy. An insurance policy which shares in the company's surplus by way of dividends or bonuses.

Pay life (PL) policy. A modification of the whole life plan where the premiums are payable for a limited period. After expiry of the selected premium payment period, the policy continues in force as a paid up policy with the face amount payable at death.

Payor benefit (PB). A rider often included in juvenile policies which provides that the insurer will give up its rights to collect the policy premiums if the policyowner or payor dies or becomes disabled.

Policy. The contract between the insurance company and the policyowner under which the insurer agrees to pay the policy benefit when specific losses occur, provided the insurer receives the required premiums.

Policy anniversary. The anniversary of the date on which the policy was issued.

Policy change. A request from the policyowner for update to the policy record (change of name, address, beneficiary, face amount, type of coverage, mode of premium payment, etc.).

Policy information page (PIP). The first (face) page of an insurance policy. It normally contains the insured's name and age, policyowner's name (if different from the insured), premium, policy number, and policy issue date.

Policy loan. An advance made by an insurer to a policyowner. It is secured by the policy cash value and shall bear interest at a rate determined by the insurer.

Policyholder. The person or party who owns an individual insurance policy. The policyholder is not necessarily the person whose life is insured, but often is. The employer or other party that applies for and is issued a group insurance policy is also a policyholder. The terms policyholder and policyowner are used interchangeably.

Pre-existing condition. A condition which existed prior to policy issuance, usually health-related.

Premium. The payment or one of the regular periodic payments a policyholder is required to make to the insurer in order to put and keep a policy in force.

Premium notice. Notice of premium due sent out by the insurer to the policyholder.

Proceeds. The amount of money that the insurer is obligated to pay for the settlement of a policy.

Proof of loss. A written statement made by the insured complying with certain conditions and given to the insurer. The purpose is to provide sufficient information to the insurer concerning the loss in order to determine its liability under the policy.

Pure endowment (PE). A type of coverage that pays a benefit only upon the insured surviving a certain period of time; no payment is made in the event of the insured's death within that time period.

R

Rated policy. A policy issued to insure a person classified as having a greater risk than normal. The policy may be issued with special exclusions and / or a premium rate higher than for a standard policy.

Reduced paid-up insurance. A non-forfeiture option under which the net cash value of the policy is used as a net single premium to purchase life insurance of the same plan as the original policy but with reduced sum assured and for which no more premiums are required.

Reinstatement. The process by which a life insurance company puts back in force a policy which has lapsed because of non-payment of renewal premiums.

Reinsurance. Insurance that one insurer buys from another insurer to cover part or all of a risk that the original insurer will not or cannot undertake.

Renewable term insurance policy. A policy that gives the policyholder the option to renew the coverage at the end of the term. Common renewable periods are one year and five years.

Renewal provision. An individual life insurance policy provision that gives the policyowner the right to continue the coverage at the end of the specified term without submitting evidence of insurability.

Reversionary bonus (RB). A form of surplus sharing payable for selected permanent plans. It provides additional paid-up insurance at a stipulated percentage of the face amount (simple or compounded) on each policy anniversary.

Rider. An addition to the insurance policy which expands the benefits otherwise payable.

S

Sales illustration (SI). A printed proposal of a policy's rates, cash values and applicable dividends over a specified number of years. It is presented by the agent to the prospective client.

Settlement options. Choices given to the policyowner or the beneficiary of a life insurance policy regarding the method by which the insurer will pay policy proceeds. Instead of receiving the proceeds in a lump sum, the policyowner or the beneficiary may elect that the proceeds be retained by the insurer to be distributed under one of the following common options:
· earn interest
· pay out in specified installments
· pay out in equal installments for a specified period
· pay out in equal installments for life

Standard premium rate. The premium rate charged for insurance on a healthy individual.

Sub-standard premium rate. The higher premium rate charged for insurance on a person classified as having a greater likelihood of loss than normal.

Suicide clause. Life insurance policy wording which specifies that the proceeds of the policy will not be paid if the insured takes his or her own life within a stipulated time frame, usually one year from the policy issue date.

Surgical schedule. The part of a health insurance policy that describes the maximum benefits payable for specified surgical services.

T

Term insurance. Life insurance under which the benefit is payable only if the insured dies during a specified period and nothing will be paid if the insured survives to the end of that period. It contains no loan, cash surrender or non-forfeiture provisions. A number of term plans are convertible to permanent plans without the need for medical examination or other evidence of insurability.

Total and permanent disability (TPD). Total and permanent loss of function as a result of an injury or disease which totally and permanently incapacitates an individual from performing his work resulting in permanent loss of earning capacity. The actual definition would depend on the actual wordings in the policy contract.

Twisting. Practice of inducing a policyholder to lapse or cancel a policy for the purpose of replacing such policy with another to the detriment of the policyholder. The practice is considered unethical.

U

Underwriting. The process of assessing and classifying the degree of risk that a proposed insured represents. This is the duty of the underwriter.

V

Variable life insurance policy. A form of whole life insurance under which the face amount and the cash value of the policy vary according to the investment performance of a separate account fund.

Void. A term used in law to describe something, such as a contract, which never had validity.

Voidable contract. A contract that can be legally rejected (avoided) by a party to the contract.

W

Waiver of premium. A rider or a policy provision under which the insurer promises to give up its right to collect the policy premiums if the conditions are met, as laid down in the contract, with coverage and benefits still offered as normal.

Whole life (WL) insurance. Life insurance coverage which remains in force during the insured's lifetime, provided premiums are paid as specified in the policy.

Y

Yearly renewable term (YRT). One-year term insurance providing the right to renew at the end of the year without evidence of insurability. The premium rate increases at each renewal as the insured's age increases.

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