Singapore Insurance and Wealth Glossary (60 Terms, English and Chinese)

The person who receives the insurance proceeds when the life assured dies. In Singapore, where a valid nomination has been made under the Insurance Act 1966, the proceeds are generally paid directly to the nominee or trustee; without a nomination, the proceeds generally go into the policy owner's estate and are distributed under the will or the intestacy rules.

The value built up in a policy with a savings or investment element. The surrender value is the amount actually received on ending the policy early, usually after surrender charges and any outstanding policy loan. In the early years, the surrender value is often below the premiums paid. Term life insurance generally has no cash value.

Guaranteed benefits are the part the contract promises to pay regardless of investment performance. Non-guaranteed benefits (such as bonuses, ILP fund values and IUL crediting) depend on investment performance, charges and claims experience, and may be higher or lower than illustrated. When reading a Policy Illustration, look at the guaranteed part first.

A policy whose premiums go into the insurer's participating fund to be invested together, with policy owners sharing in the surplus; all bonuses are non-guaranteed. For Singapore dollar participating policies, the upper illustrated rate may not exceed 4.25% p.a. and the lower rate 3.00% p.a., with the lower rate at least 1.25 percentage points below the upper (LIA, from 2021-07-01). Hong Kong's illustration cap is based on the policy internal rate of return, a different measure.

A person or institution that holds and manages assets for beneficiaries under a trust deed or a statutory trust. Under a trust nomination, the proceeds are held by the trustee for the spouse and children. Professional trustee services in Singapore are provided by trust companies licensed under the Trust Companies Act 2005 (MAS); where family members overseas are beneficiaries, the trustee distributes as agreed.

Basic hospitalisation insurance covering all Singapore citizens and PRs, with a claim limit of S$200,000 per policy year (MOH, 2024-10-15). For new residents, the key point is who it covers: EP and Dependant's Pass holders are outside it, and PRs are included automatically.

A hospitalisation plan offered by private insurers on top of MediShield Life, which can cover private hospitals or higher ward classes. Because it is built on MediShield Life, pass holders generally cannot buy one and usually use private medical or international medical insurance instead. About 71% of residents held an IP as at the end of 2025 (LIA, 2026-02-11).

Additional cover bought on top of an Integrated Shield Plan to pay for out-of-pocket amounts such as the deductible and co-insurance, with premiums payable in cash. From 2026-04-01, newly sold IP riders may not cover the minimum deductible, and the annual co-payment cap rises to at least S$6,000 (MOH, 2025-11-26).

Long-term care insurance for citizens and PRs that pays monthly in the event of severe disability. Those starting a claim in 2026 receive S$689 a month (CPF Board); payouts rise by 4% a year from 2026 to 2030, after which the Council will review them (MOH, 2025-08-27), and they increase each year until the insured reaches 67 or makes a successful claim.

A term life scheme run by the CPF Board that covers citizens or PRs automatically only when they make CPF work contributions; it does not apply to pass holders. Cover is S$70,000 up to age 60 and S$55,000 from 60 to 65. It is currently administered by Great Eastern Life, with the contract extended to 2028-09-30 (CPF Board, 2025-05-26).

Singapore's compulsory social security savings system. Employers must pay CPF contributions for citizen and PR employees earning more than S$50 a month, while foreign employees are exempt (CPF Board). CPF savings do not form part of the estate and cannot be dealt with by will, so a separate CPF nomination is needed; without one, the Public Trustee distributes them under the intestacy rules.

The CPF account for medical expenses, which can be used within limits for hospital bills, some outpatient treatment, and premiums for MediShield Life and the base plan portion of an Integrated Shield Plan. IP rider premiums cannot be paid with MediSave. Usage limits follow the latest CPF Board and MOH rules.

The period after taking out a policy during which it can be cancelled and premiums refunded. In Singapore it is at least 14 days from receipt of the policy documents, except for travel, motor and domestic helper insurance (MoneySense, 2026-05-11); for Hong Kong life policies it is 21 calendar days (IA GL29). The two markets count it differently, so for cross-border policies the rules of the place of contract apply.

The proposer and life assured must disclose truthfully and fully at application any facts that may affect the insurer's underwriting decision, such as medical history, occupation, hobbies, existing policies and financial position. Non-disclosure may lead to the policy being avoided or a claim being rejected. Information you are unsure about should generally be declared.

A legal arrangement by which the policy owner transfers all or part of the rights under a policy to another person or institution, commonly to pledge the policy as security for a loan, for example to a lender in premium financing. After assignment, surrender, policy loans and changes of beneficiary usually need the assignee's consent; policies with a trust nomination are subject to further restrictions.

A document in the format prescribed by LIA that projects a policy's guaranteed and non-guaranteed benefits, surrender values and charges year by year at assumed rates of return; it does not represent future results. The main ILP illustration shows three scenarios at 0%, B% and C% (LIA, 2026-07-28). When comparing policies from different markets, illustration formats and assumptions differ, so the figures should not be compared directly.

A measure in the Policy Illustration of charges and costs, equal to the value of premiums paid accumulated at the illustrated rate of return less the total surrender value (LIA MU 22/24 appendix, 2026-07-28). A higher figure means charges and the cost of protection weigh more heavily on returns; it can be compared between similar policies.

Distribution-related costs shown year by year in the Policy Illustration, including remuneration paid to intermediaries. The LIA format states that it is not an additional charge and is already built into the premium (LIA, 2026-07-28). It shows how much of the premium goes towards distribution.

The assumed rate of return used in a Policy Illustration, for illustration only, with no effect on actual returns. For Singapore dollar participating policies, the upper rate may not exceed 4.25% p.a. and the lower rate 3.00% p.a. (LIA, from 2021-07-01). Hong Kong caps the policy internal rate of return in the point-of-sale benefit illustration (6.0% for HKD, 6.5% for non-HKD, IA, from 2025-07-01), a different measure.

The difference between the offer price and the bid price of ILP fund units: units are bought at the offer price and redeemed at the bid price. MoneySense notes that the spread is usually about 5% (2026-09-28); some funds have no spread, and the product documents prevail.

A document that summarises in plain format the nature of a product, its main risks, charges and key terms, to help buyers understand the product quickly before signing. Insurance products also come with documents such as the Product Summary, which should be read together with the Policy Illustration and the contract terms; the contract prevails.

Exchange rate risk arising when assets, liabilities and future spending are in different currencies. It is common with US dollar policies matched against Singapore dollar or renminbi spending, or in premium financing where the loan currency differs from the policy currency; exchange rate movements may offset policy growth or trigger a call for more collateral. The Hong Kong dollar is pegged to the US dollar (HKMA); there is no similar peg between the Singapore dollar and the US dollar.

(Applies to: Singapore / Hong Kong) A separate loan arrangement in which a borrower borrows from a lender to pay premiums and assigns the policy rights as security. Hong Kong has a standardised Important Facts Statement – Premium Financing, which states that the actual net benefit after financing will be lower than the illustration (HKMA, 2022-04-01); Singapore has no equivalent mandatory document, and the loan agreement governs.

The ratio of the loan balance to the value of the collateral. In premium financing, the lender sets an advance ratio and a maintenance ratio based on the policy's cash value; a fall in cash value or a rise in the loan balance pushes up the LTV, and reaching the threshold may trigger a call for more collateral. The ratios are set by each lender.

When the collateral is no longer enough to support the loan, the lender asks the borrower to add cash or other assets, or to repay part of the loan. If the shortfall is not made up in time, the lender may restructure or terminate the loan and may exercise the policy rights, for example by surrendering the policy (HKMA IFS-PF, 2022-04-01).

The legal document that assigns the policy rights to the lender as security. Once signed, collecting benefits, surrender, withdrawals, policy loans and changes of beneficiary usually need the lender's consent (HKMA IFS-PF). After the loan is repaid, a reassignment is generally needed.

A loan from the insurer to the policy owner, limited by the policy's cash value and charged interest; term life insurance generally has no such option (LIA, Your Guide to Life Insurance, May 2020 edition). Unpaid principal and interest are usually deducted on a claim or surrender, and the interest rate and loan ratio follow the policy terms. Unlike premium financing, it involves no third-party lender.

A mechanism by which, if a premium remains unpaid after the grace period and the policy has enough cash value, the insurer automatically advances the premium from the cash value to keep the policy in force, with interest charged (LIA, Your Guide to Life Insurance, May 2020 edition). It generally does not apply to term life insurance, and the contract determines whether it applies.

A nomination under the Insurance Act 1966 that can name only a spouse and children as beneficiaries, creating a statutory trust over the proceeds for the nominees; changes, surrender or policy loans need the consent of the trustee or beneficiaries (LIA, 2026-03). Parents, siblings and other family members overseas therefore cannot be beneficiaries under a trust nomination.

A nomination that can name anyone as beneficiary, with the policy owner keeping control and able to change it at any time (LIA, 2026-03), including parents or siblings living overseas. When an overseas beneficiary claims, proof of identity and relationship must be notarised or authenticated and translated into English (LIA, 2025-11).

A close family member or similar person to whom, where there is neither a nomination nor a will, the insurer may pay up to S$150,000 under section 150 of the Insurance Act 1966 without a grant of probate or letters of administration (LIA, 2026-03). Family members overseas still need authenticated proof of relationship, and any amount above the limit goes through the estate process.

A court document confirming that a will is valid and authorising the executor to administer and distribute the estate. If insurance proceeds go into the estate, the insurer generally requires the executor to produce a grant of probate issued by the Singapore courts before paying (LIA, 2025-11). How a foreign grant can be used in Singapore should be checked with a lawyer.

Where there is no will, the court document authorising the administrator to manage the estate and distribute it under the Intestate Succession Act. For example, where a spouse and children survive, the spouse receives half and the children share the other half equally (MoneySense, 2026-09-28); Muslim estates are governed by separate rules.

Under the Mental Capacity Act, a person aged 21 or above who has mental capacity can appoint donees to make decisions on personal welfare and property if they later lose mental capacity. The LPA must be certified by a certificate issuer, who may be a doctor accredited by the Public Guardian, a practising lawyer or a registered psychiatrist (MSF / OPG, accessed 2026-10).

A company licensed under the Trust Companies Act 2005 and regulated by MAS to carry on trust business in Singapore; some institutions such as banks are exempt trust companies. Whether a company holds a trust business licence can be checked in the MAS Financial Institutions Directory (MAS, 2023-09-29).

The person named in a will to apply for a grant of probate and to wind up and distribute the estate. If insurance proceeds go into the estate, the insurer generally requires the executor to produce a grant of probate issued by the Singapore courts (LIA, 2025-11). An executor living overseas usually needs to appoint a local lawyer to handle the Singapore procedures.

A grant of probate or letters of administration issued by the courts of certain jurisdictions can be resealed by the Singapore courts for use in Singapore, without a fresh application. Which jurisdictions' grants qualify, and what documents are needed, depend on current Singapore law and legal advice.

Singapore permanent residence status, approved by the Immigration & Checkpoints Authority (ICA). PRs are covered automatically by MediShield Life, start CPF contributions (at graduated rates for the first two years), and join the DPS with their first CPF work contribution (CPF Board). Buying insurance or opening an account is not a basis for a PR application.

A work pass issued by the Ministry of Manpower (MOM) to foreign professionals, managers and executives. The minimum monthly salary starts at S$5,600 for general sectors, rising with age, and at S$6,200 for financial services; from 2027-01-01, new applications move to S$6,000 and S$6,600 respectively (MOM, 2026-04-28).

A pass issued by MOM to the spouses and children of eligible pass holders, with salary thresholds as currently published by MOM. DP holders do not join CPF and are outside MediShield Life; their medical cover usually depends on whether the main pass holder's employer group insurance covers dependants, or on private medical insurance they buy themselves.

MOM's points-based framework for EP applications, scoring salary, qualifications, workforce diversity and support for local employment; applicants must score 40 points. Exemptions apply in cases such as a fixed monthly salary of at least S$22,500 (MOM, 2026-04-28).

A personalised pass issued by MOM to top talent in business, the arts and culture, sports, academia and research, not tied to a single employer. One condition is a fixed monthly salary of at least S$30,000 in the previous 12 months, and each renewal lasts five years (MOM, 2026-09-14).

EDB's route to permanent residence for investors. Since 2023-03-15 there have been three options: invest at least S$10 million in a Singapore business, invest S$25 million in a designated fund, or set up a single family office with at least S$200 million in assets under management (EDB, 2023-03-02); check the latest factsheet.

An individual to whom resident tax rates and reliefs apply under IRAS rules. A foreigner who stayed or worked in Singapore for at least 183 days in the previous calendar year is tax resident, with administrative concessions covering three years and two consecutive calendar years (IRAS, 2026-05-12). The top marginal rate for residents is 24%, and non-residents' employment income is taxed at 15% or the resident rates, whichever is higher.

A voluntary retirement savings scheme whose contributions qualify for income tax relief in the following year. The annual contribution cap is S$15,300 for citizens and PRs and S$35,700 for foreigners (IRAS, 2026-08-14). Contributions are not refunded, and part of each withdrawal is taxable, with the proportion and conditions set by IRAS.

Two concepts in financial institutions' anti-money laundering checks. Source of funds is where the money for a particular transaction comes from, such as a salary account or the proceeds of a property sale; source of wealth is how the client's overall wealth was built up, such as running a business, inheritance or investment. Large policies and private bank accounts usually require written evidence.

The OECD standard for the automatic exchange of financial account information for tax purposes. Singapore has exchanged information since 2018-09; licensed insurers issuing cash value insurance or annuity contracts must report the year-end cash value or surrender value, and the amended CRS takes effect from 2027-01-01 (IRAS, 2026-09-09). For cross-border families, policy information is exchanged with the jurisdiction of tax residence the owner declares.

Insurance taken out by a business on an employee or shareholder who contributes significantly to its profits, to cover the loss of profits caused by their death or disability. Under the IRAS e-Tax Guide (2026-01-30), premiums are deductible only if five conditions are met together, including that the policy has no surrender or investment value; where premiums have been deducted, claim proceeds are taxable.

A form completed when opening an account or applying for a policy, declaring all of the holder's jurisdictions of tax residence and tax identification numbers; the financial institution uses it to decide where CRS information is exchanged. IRAS states that knowingly providing false information may lead to a fine or imprisonment (IRAS, 2021-10-19). Update it promptly after a change of residence.

A US law requiring foreign financial institutions to identify and report accounts held by US persons, implemented in Singapore through an intergovernmental agreement. Insurance claim forms and account opening forms usually include both FATCA and CRS self-certification (LIA, 2025-11); family members with US citizenship or a green card must declare it truthfully.

An agreement between two tax jurisdictions to prevent the same income from being taxed twice, usually including tie-breaker rules for dual tax residents. Singapore has agreements with many countries and territories; how they apply depends on the text of each agreement and the determinations of the tax authorities on both sides, and tax advice is needed.

An arrangement for managing the assets of a single family, which may apply for the 13O or 13U fund tax incentives: designated investments of at least S$20 million or S$50 million respectively, and for those approved on or after 2026-08-01, a private banking account with an MAS-licensed institution (MAS FDD Cir 05/2026). More than 2,000 enjoyed the incentives as at the end of 2025 (MAS, 2026-08-05).

Administered by SDIC, it protects policy owners if a Singapore insurer fails: for individual life policies, up to S$500,000 of guaranteed sum assured and S$100,000 of guaranteed surrender value per life assured per insurer, with ILP fund values excluded (SDIC). As at 2026-10, no bill for Hong Kong's equivalent scheme has been seen introduced into the Legislative Council.

An independent body that handles disputes between consumers and Singapore financial institutions. You must first complain to the financial institution and may file within 6 months of receiving its final reply; filing is free, and adjudication is capped at S$150,000 per claim (for disputes filed from 2024-07-01, FIDReC announcement of 2024-06-24). Hong Kong's counterpart for insurance claims disputes is the Insurance Complaints Bureau.

A process to assess whether a client has relevant qualifications, investment experience or work experience, required under current rules before buying unlisted Specified Investment Products such as ILPs (MoneySense, updated 2026-07-02). On 2026-05-15 MAS responded to consultation feedback, stating that the CKA and CAR will be merged and "Specified Investment Products" renamed "Complex Products", with the effective date set by MAS's revised notices.

A category of investor to whom fewer retail investor protection rules apply. One test for individuals is net personal assets above S$2 million, or income of at least S$300,000 in the previous 12 months; new clients are treated as retail investors by default, and those who qualify must opt in to be treated as Accredited Investors (MAS, 2015-09-22).

(Applies to: Hong Kong) The statutory regulator of Hong Kong's insurance industry. It authorises insurers and licenses insurance intermediaries, and issues guidelines such as the cooling-off period (GL29, 21 calendar days for life policies) and the illustration rate caps for participating policy benefit illustrations.

(Applies to: Hong Kong) Hong Kong's standardised risk disclosure document for premium financing (HKMA, 2022-04-01). It sets out risks such as the financing being separate from the insurance contract, restricted rights after assignment, an actual net benefit below the illustration, and calls for additional collateral. Singapore has no mandatory document of the same name, but it can serve as a reference.

(Applies to: mainland China) The annual facilitation quota for foreign currency purchases and conversions by domestic individuals, equivalent to US$50,000 per person per calendar year. Purchased foreign currency may not be used for capital account items not yet opened, such as buying property overseas, securities investment, life insurance and investment-type, return-of-premium or participating insurance (SAFE Xiamen Branch, 2021-10).

(Applies to: mainland China) Under the Individual Income Tax Law, resident individuals, meaning those domiciled in China or who have resided in China for an aggregate of 183 days or more in a tax year, are taxed on income from inside and outside China, and overseas income must be reported between 1 March and 30 June of the following year. How overseas policy gains are characterised should be checked with a mainland tax professional.