Savings insurance glossary (78 terms, English-Chinese): basics, bonuses, capital guarantees, annuities, premiums, illustrations, surrender, regulation and tax

A life policy whose main purpose is to accumulate cash value, with death cover attached, that pays out on maturity after a fixed term. Common terms are 10, 15 or 20 years, and premiums are usually fixed at the outset and do not increase (MoneySense). It is not a deposit, and early surrender may return less than the premiums paid.

An endowment that shares in the distribution of profits from the insurer's participating fund, also called a with-profits endowment. Benefits are split into a guaranteed part written into the contract and a non-guaranteed part paid as bonuses; bonuses are not guaranteed until declared and depend on the participating fund's investment, claims and expense experience.

An endowment whose maturity value and cash values are all written into the contract as guaranteed benefits, but which does not share in the participating fund's surplus and pays no bonuses (MoneySense). It offers more certainty, but the ceiling on possible outcomes is also fixed at the outset.

An endowment that pays out part of the sum assured at agreed intervals during the policy term, with the balance and bonuses paid on maturity; it can be participating or non-participating (MoneySense). Early payments reduce the policy's remaining value accordingly.

The basic amount of cover set in the contract, used as the basis for calculating the death benefit, maturity benefit and reversionary bonuses. Reversionary bonuses declared on participating policies are added to the sum assured. On an endowment, death cover as a multiple of premiums paid is usually lower than on protection-focused life insurance; refer to the benefit illustration for specifics.

The value a policy can be realised for at a given time, made up of the guaranteed cash value and the cash value of vested bonuses; surrenders, policy loans and partial surrenders are all calculated on it. In the early years of a policy, cash value is usually below the premiums paid.

The amount paid when the policy reaches its maturity date and the life assured is still alive, generally the sum assured plus vested reversionary bonuses and a terminal bonus, of which the terminal bonus is not guaranteed. LIA figures show that Singapore life insurers paid S$12.17 billion in maturity benefits in 2025 (LIA, 11 Feb 2026).

The amount paid to beneficiaries if the life assured dies during the policy term. Common formulas are the sum assured plus vested bonuses, or the higher of a percentage of premiums paid and the surrender value; the exact formula is set out in the Product Summary.

The party who owns the policy rights and pays the premiums, and who can surrender, take loans and nominate beneficiaries. Under the nomination framework of Singapore's Insurance Act, a nomination can be made only if the policy owner is also the life assured and is at least 18 years old (LIA, Mar 2026).

The person whose life is insured; events such as death, disability or maturity are assessed by reference to that person. Some products allow a change of life assured under certain conditions so that the policy can continue; this is a product-specific feature, subject to the Product Summary.

The policy term is the period from inception to maturity; the premium payment term is the number of years premiums must be paid, which can be shorter than the policy term. The end of the premium term only means no further premiums are due; it does not mean the maturity benefit can be drawn early.

A pool of assets that an insurer sets up and manages separately for participating policies, which may be invested in government and corporate bonds, equities, property and cash (MoneySense). Its investment, claims and expense experience determines bonus levels, and its governance and disclosure are regulated by MAS Notice 320.

A bonus declared yearly and added to the sum assured. Once declared and vested, it becomes a guaranteed benefit, usually paid in full on maturity or a claim, while only its cash value is paid on surrender (MoneySense). Future reversionary bonus rates are not guaranteed.

A one-off bonus calculated and paid only on maturity, a claim or surrender; it is not guaranteed in advance and its amount depends heavily on the state of the participating fund at that time. A large share of the non-guaranteed part of the maturity column in a benefit illustration often comes from the terminal bonus.

A bonus paid in cash rather than added to the sum assured, usually yearly; some insurers allow it to be used to buy paid-up additions, offset premiums or be left to accumulate (MoneySense). It is not guaranteed until declared, and the interest rate on accumulated amounts is generally not guaranteed either.

A bonus that has been declared and added to the policy, becoming a contractual right. The LIA guide notes that once bonuses are added to the policy, they cannot be reduced or taken back on a claim; the PPF Scheme also counts declared and vested bonuses when calculating guaranteed benefits (SDIC).

The practice of holding back part of the surplus in good years to support bonus levels in poorer years (MoneySense). MAS requires the smoothing approach to be disclosed in the Product Summary; smoothing reduces year-to-year volatility but delays the reflection of market changes.

The value obtained by accumulating a policy's premiums paid, less expenses and the cost of insurance, at the participating fund's actual returns; it is one of the reference benchmarks for setting bonuses. MAS stated in 2009 that Singapore life insurers already used this concept when setting bonuses.

The actuary an insurer appoints under regulatory requirements to advise the board on bonus distribution, smoothing and the financial soundness of the participating fund. Bonuses are declared only after board approval, taking the actuary's advice into account (MoneySense).

Under statutory rules, for every S$9 of bonus an insurer declares to policyholders, at most S$1 may be distributed to shareholders as compensation for managing the participating fund (MAS, 13 Aug 2009). If the participating fund is insufficient to pay guaranteed benefits, shareholders make up the shortfall (LIA).

A document the insurer sends each year to participating policyholders, setting out the bonuses declared that year, the participating fund's investment returns and expenses, the reasons for changes in bonus rates and the effect on future benefits. MAS Notice 320 requires it to be sent annually.

The participating fund's investment return after investment expenses. Under MAS Notice 320, the Product Summary must disclose the figures for the past three years and the 3-, 5- and 10-year averages. It is a fund-level measure, not the return on any individual policy, and past performance is not indicative of the future.

The participating fund's total expenses (including investment, management, distribution and tax, as defined in each insurer's disclosure) as a proportion of fund assets; the Product Summary must disclose the figures for the past three years (MAS Notice 320). It is already reflected in fund returns and overlaps with the total distribution cost in the benefit illustration, so the two cannot simply be added together.

Benefits written into the contract that do not change with the participating fund's performance, including guaranteed surrender values, guaranteed maturity values, guaranteed payouts and vested reversionary bonuses. They are what the PPF Scheme protects and the basis for assessing the worst case.

Benefits not yet declared that depend on the participating fund's future performance, including future reversionary bonuses, terminal bonuses and cash bonuses. A benefit illustration shows this part at two illustrated rates, and actual outcomes may be higher or lower than the illustrated figures.

The minimum amount the contract specifies you will receive on surrender at the end of each policy year, excluding non-guaranteed bonuses. The PPF Scheme caps protection of guaranteed surrender value at S$100,000 per life assured per insurer (SDIC, accessed Oct 2026).

A contractual term under which, from the end of a stated policy year, the guaranteed surrender value is not less than premiums paid, often subject to conditions such as not altering the policy, making no partial surrenders and paying premiums on time. It is a floor on the surrender value that does not cover inflation or opportunity cost; the policy contract prevails.

The first policy year in which the surrender value is not less than premiums paid. The guaranteed break-even year is based on the guaranteed surrender value, while the non-guaranteed break-even year includes illustrated bonuses, and the two may be years apart; only the guaranteed part written into the contract is binding.

The cash value a single-premium policy has immediately after issue, usually expressed as a percentage of the single premium, which varies by product. A higher day-one cash value means a smaller loss on early surrender, but does not imply a better long-term outcome.

An arrangement under which cover is issued without medical underwriting, subject to certain conditions and a sum assured limit. Guaranteed issuance is not unconditional issuance: the insurer still carries out financial underwriting and source-of-funds checks, and may ask for health information above the limit.

The insurer's process for assessing whether the premium and sum assured are proportionate to the applicant's income, assets and needs, usually requiring proof of income or assets and a source-of-funds explanation. Large single-premium policies and premium-financed policies are generally scrutinised more strictly.

An insurance policy that mainly pays a fixed amount at regular intervals, usually monthly (MoneySense). A participating annuity also includes a non-guaranteed part that depends on the participating fund's performance. MoneySense notes that you cannot take a loan against an annuity policy and that early surrender may result in a loss.

An annuity that starts paying out soon after the premium is paid, usually by single premium, suited to people who have retired or are about to retire and need to top up cash flow straight away. Once payouts start, loans are generally not available and losses on early surrender are usually significant.

An annuity with an accumulation period first, which starts paying out only at an agreed age or policy year. The longer the accumulation period, the longer the money is locked away; any bonuses in the accumulated amount during that period are non-guaranteed benefits.

The accumulation period is the phase in which premiums are paid and value grows; the payout period is the phase in which regular payments begin. A benefit illustration should show the guaranteed and non-guaranteed figures for each phase separately, together with the policy year in which payouts begin.

An annuity that pays out over an agreed period (MoneySense) and stops at the end of it. It suits filling an income gap for a specific period, for example from early retirement until CPF LIFE payouts begin, but cannot address longevity risk beyond the term.

An annuity that pays out until the life assured dies (MoneySense), used to hedge longevity risk. CPF LIFE is a type of life annuity. For a life annuity bought with SRS funds, the rule that 50% of each annual payout is taxable applies on withdrawal (IRAS).

The risk of living longer than expected and running out of savings before the end of life. SingStat figures show that life expectancy at birth for Singapore residents was 83.9 years in 2025 (SingStat, published 3 Jun 2026), and an individual's actual lifespan may be longer.

Singapore's national lifelong annuity scheme, offering the Escalating, Standard and Basic Plans; payouts on the Escalating Plan rise by 2% a year (CPF). Payouts can start from 65 and be deferred to 70 at the latest; a private annuity is only an optional supplement to it.

The CPF retirement savings benchmarks set for members at 55. For members turning 55 in 2026, the Basic, Full and Enhanced Retirement Sums are S$110,200, S$220,400 and S$440,800 respectively (CPF, 16 Jun 2026), corresponding to different levels of CPF LIFE monthly payouts.

A voluntary retirement savings scheme set up by the government. In 2026 the contribution cap is S$15,300 for Citizens and PRs and S$35,700 for foreigners, and contributions qualify for personal income tax relief (IRAS); for withdrawals after the statutory retirement age, 50% of the amount withdrawn is taxable.

Paying the entire premium in one lump sum. Early guaranteed cash values are usually relatively high, but it requires a sum that can be left untouched for a long time; endowments under CPFIS allow only single or recurrent single premiums (CPF).

Paying premiums yearly, half-yearly, quarterly or monthly over the premium term. Each payment is smaller, but upfront costs are recovered early, cash values are very low in the first few years, and stopping payments midway may cause the policy to lapse or to be surrendered at a large loss.

An arrangement in which the premium term is shorter than the policy term, for example five years of premiums with the policy lasting longer. The policy keeps accumulating value after premiums end, but surrendering before the capital guarantee point or maturity may still return less than premiums paid.

A rider that waives future premiums and keeps the policy in force if the payer suffers a specified event (such as death, total and permanent disability or a specified critical illness), often used on education plans. Coverage and waiting periods are set out in the rider terms.

The person who takes over the policy rights after the original policy owner dies. Some products offer this arrangement so that the policy does not have to end on the owner's death; it is a product-specific feature, subject to the Product Summary and the insurer's requirements.

An arrangement in which a bank loan pays a large single premium, with the policy as collateral. The borrower bears floating-rate, margin-call and roll-over risks, and the bank may realise the policy on default; the insurer does not guarantee that the loan will be rolled over.

The Singapore-dollar overnight interest rate benchmark administered and published by MAS, commonly used as the pricing basis for Singapore-dollar floating-rate loans. Interest on premium financing loans is usually SORA or the bank's cost of funds plus a spread, and moves with the market.

A bank's demand that the borrower add collateral or make a partial repayment when the value of the collateral falls below an agreed level relative to the loan balance. If the shortfall is not made up in time, the bank may realise the assigned policy under the loan agreement.

The legal document assigning the policy rights to the lending bank as security, common in premium financing. While the assignment is in place, surrenders, loans and changes of beneficiary usually require the bank's consent. CPFIS policies may not be assigned or pledged (CPF).

The document an insurer provides at the point of sale, showing the guaranteed and non-guaranteed benefits, surrender values, effect of deductions and total distribution cost for each policy year at two illustrated investment rates of return. Illustrated figures do not represent future results.

The document describing a product's main features, benefits, charges, exclusions and risks. For participating products, the Product Summary must disclose the participating fund's investment strategy, the past three years' net investment returns and expense ratios, the smoothing approach and more (MAS Notice 320).

The participating fund return assumption used in the benefit illustration. Since 1 Jul 2021, the two illustrated rates for Singapore-dollar participating policies have been capped at 4.25% and 3.00% (LIA); they are for illustration only and are not upper or lower limits on the fund's performance.

The difference between the value of premiums paid accumulated at the illustrated rate and the total surrender value, reflecting the cumulative impact of the cost of insurance, distribution costs, expenses, surrender charges and expected transfers to shareholders (LIA benefit illustration template).

The cumulative expected distribution-related costs up to a given year, including commission and other benefits and services paid to the distribution channel. The LIA template states that it is built into the premium and is not an additional charge.

The table in the benefit illustration listing guaranteed and non-guaranteed surrender values by policy year. When reading it, find the year in which the guaranteed surrender value first reaches the premiums paid, and compare the differences under the two illustrated rates.

The policy owner's decision to end the policy and take the surrender value. The surrender value is usually the guaranteed surrender value plus the cash value of vested bonuses, less any outstanding loans; surrendering in the early years often returns less than the premiums paid.

Taking only part of the cash value while keeping the policy in force, which proportionately reduces the sum assured, cash value and future bonuses. Some products set a minimum remaining amount or a limit on the number of withdrawals; the policy terms apply.

The cost deducted by the insurer from the cash value, or reflected in a lower surrender value, when a policy is terminated early. The LIA guide warns that early termination of a participating policy may mean losing all or nearly all of the premiums paid.

A loan from the insurer up to the policy's cash value, with the policy remaining in force. MoneySense cautions that the interest can be high, and outstanding loans and interest are deducted from claims or surrender proceeds; if the loan balance exceeds the cash value, the policy may be terminated.

An arrangement in which, when a regular premium is overdue, the insurer automatically pays it from the cash value and the policy stays in force. The amount advanced accrues interest as a loan and steadily erodes the cash value.

Stopping premiums and using the cash value at that point to buy a policy with a lower sum assured and no further premiums. It suits those who do not want to surrender but cannot keep paying; future bonuses and the maturity amount are reduced accordingly.

The period after a premium falls due during which it can still be paid without the policy lapsing; the length is set out in the policy terms. If a claim arises during the grace period, the insurer usually deducts the unpaid premium before paying out.

A policy lapses when premiums remain unpaid after the grace period and the cash value is insufficient for an automatic premium loan. Reinstatement can be applied for within a set period by paying the overdue premiums and interest, possibly with fresh health information.

Singapore life insurers offer a 14-day free-look period from the date the policy documents are received, during which the policy can be cancelled and premiums refunded, less medical and other expenses the insurer has paid (MoneySense, 11 May 2026).

Singapore's central bank and integrated financial regulator, responsible for licensing and supervising insurers and financial advisers, and providing consumer education through MoneySense. Regulation does not mean any policy's outcome is guaranteed.

The trade association of Singapore life insurers, which publishes consumer guides, the benefit illustration format and caps on illustrated rates, as well as quarterly industry data - for example, participating products made up 24% of weighted new business premiums in 2025 (LIA, 11 Feb 2026).

Administered by the Singapore Deposit Insurance Corporation (SDIC), it protects guaranteed benefits if a member life insurer fails: a cap of S$500,000 on guaranteed sum assured and S$100,000 on guaranteed surrender value, and S$100,000 of the value of guaranteed benefits for annuities, all per life assured per insurer (SDIC).

The deposit protection scheme administered by SDIC, covering Singapore-dollar savings, fixed and current account deposits up to S$100,000 in aggregate per member bank; foreign-currency deposits and structured deposits are not insured (SDIC). Endowments fall outside deposit insurance.

The independent body that handles disputes between consumers and financial institutions; awards are capped at S$150,000 per claim and filing is free for consumers (FIDReC website, accessed Oct 2026). Consumers normally complain to the financial institution first and file after receiving its final reply.

An irrevocable nomination made under the Insurance Act, with beneficiaries limited to spouse and children; once made, the policy owner loses the right to deal with the policy benefits, which include both living and death benefits. It is not available for CPFIS and SRS policies (LIA, Mar 2026).

A nomination made under the Insurance Act that can be changed at any time; it covers only the death benefit, can name any individual or organisation, and is available for CPFIS and SRS policies. Without a valid nomination, the death benefit may have to go through estate proceedings (LIA, Mar 2026).

The process a financial adviser must complete before recommending an investment product (including life insurance), covering knowing the client, a customer knowledge assessment, needs analysis and record-keeping, under MAS Notice FAA-N16 (revised 29 Dec 2025).

Singapore's insurance comparison platform, which lists CASE, LIA, MAS and MoneySENSE as partners; it covers categories including endowments, term life, whole life and investment-linked insurance, letting consumers compare guaranteed and non-guaranteed benefits on the same basis before buying.

An IRAS personal income tax relief that applies only if the previous year's CPF contributions were below S$5,000. The list of non-qualifying policies explicitly includes "Endowment policy", so endowment premiums cannot be used to claim this relief (IRAS, YA 2026).

The scheme that lets members invest CPF savings in specified products. Endowments under the scheme must be single or recurrent single premium, mature no later than the 62nd birthday or the prescribed minimum retirement age (whichever is later), and may not be assigned or pledged (CPF Annex A, Feb 2022).

The international standard for the automatic exchange of financial account information between jurisdictions. Insurance contracts with a cash value are reportable financial accounts, and insurers must report their cash value or surrender value (IRAS CRS e-Tax Guide, fifth edition, 11 Aug 2026).

Singapore has abolished estate duty for deaths on or after 15 Feb 2008 (IRAS). This does not mean policy payouts are free of tax in other jurisdictions or under other taxes; cross-border families should seek professional advice where they live.