Policy Servicing Glossary

Term

Definition

Assignment

Transfer of ownership and rights of the policy to a natural person or corporation. Assignments will override nominations/trust.

Auto-Trustee/Statutory Trustee

An individual nominated by a non-Muslim policyholder as a beneficiary becomes an automatic trustee if he/she is the:

1. spouse or child;

2. parents, if there is no spouse or child at the time of nomination.

Surrender of Reversionary Bonus

Surrendering of accumulated Reversionary Bonus of an insurance policy.

Endorsement

The process to change or update a policy's coverage and details that might affect the coverage and premium of the policy.

Fund Switching

Change of investment portfolio from moving some or all units of an existing fund to a new one or more funds, subject to switching charges (if any).

Lapse

Termination of a policy due to unpaid premiums within the required period.

Nominee

The person nominated by the policyholder to be the beneficiary and to receive the proceeds of an insurance policy upon the death of the insured.

Policy Loan

A loan made by an insurance company to a policyholder on the security of the cash value of the policy.

Premium Redirection

Change of future premium investments towards a different fund or set of funds.

Re-Assignment

Transfer of ownership and rights of the policy from existing Assignee back to the policyholder.

Revival

A process of reactivating lapsed/out-of-coverage policies by remitting full or partial repayment of outstanding premiums subject to the type of revival.

Surrender

Termination or cancellation of an insurance policy for its cash value before maturity date or due to death of the insured, subject to a sum of surrender charges (if any).

Top-Up

One-time payments; an additional amount of premium that is put into the policy.

Trustee

An individual appointed by a non-Muslim policyholder to manage the policy monies with the beneficiary's interests in mind.

Withdrawal

Cancellation of units partially from an insurance policy which will result in a reduction in the account value to the extent of the amount withdrawn and withdrawal charges (if any).

Paid Up

Reduction of sum assured with conversion of cash value into payment for future premium.

Survival Benefit

An amount payable at the end of specified durations which is fixed and predetermined.

Maturity Value

The time when an insurance company will pay a sum of maturity value to the policyholder, if the policy has not been previously invoked to cover contingencies like death.

Maturity Benefit

The sum of maturity value paid to the policyholder when the policy matures.