In this blog, we will compare and contrast to help you make an informed decision.…
Navigating the world of the glossary of insurance terms in Singapore can be like wandering through a jungle filled with strange words and confusing concepts. Don’t worry – you’re not alone! Insurance terms in Singapore form their own specialized language. This glossary is here to help you hack through the overgrowth of jargon and get financially savvy.
Understanding the terminology behind your insurance policies is crucial for making informed choices about your coverage. Getting it right means protecting yourself, your loved ones, and your hard-earned assets. This glossary’s your machete!
Understanding these terms empowers you to make the best insurance decisions. Here’s your quick-reference guide:
| Term | Definition | Simple Example | Insurance Type |
|---|---|---|---|
| Premium | The regular payment you make to keep your insurance policy active. | Think of it as your monthly subscription fee for protection. | All |
| Deductible | The amount you pay out-of-pocket before your insurance coverage kicks in. | If your deductible is $500 on a health insurance claim, you’ll pay the first $500 of costs yourself. | Health, Critical Illness |
| Co-insurance | The percentage of a claim’s expenses you share with your insurer. | With a 10% co-insurance, you pay 10% of a covered medical bill, and your insurance covers the remaining 90%. | Health, Critical Illness |
| Sum Assured | The maximum amount your insurance policy will pay out in the event of a claim. | If your life insurance has a sum assured of $200,000, that’s the maximum payout your beneficiaries would receive. | Life, Critical Illness |
| Rider | An optional add-on to your base insurance policy for enhanced, specialized coverage. | A critical illness rider on your health insurance provides extra coverage if you’re diagnosed with a serious condition. | Many (Life, Health, Disability) |
| No-Claim Discount (NCD) | A reward for safe driving that reduces your car insurance premiums. | Maintaining a clean driving record for a year might earn you a 10% NCD. | Car |
| Exclusion | Specific situations or events that your insurance policy does not cover. | Most travel insurance policies have exclusions for pre-existing medical conditions. | All |
| Underwriting | The process your insurer uses to assess your risk and determine your premiums. | Factors like age, health, and occupation are considered during underwriting. | All |
| Surrender Value | The amount of money you might receive if you cancel certain types of life insurance policies before their maturity date. | Not all life insurance policies have a surrender value, so check the terms carefully. | Life (Cash Value Policies) |
| Term | Definition | Simple Example | Insurance Type |
|---|---|---|---|
| Annuity | A financial product that provides you with a steady stream of income payments, typically in retirement. | An annuity can convert your retirement savings into guaranteed monthly payouts. | Retirement |
| Payout Period | The duration for which you’ll receive regular income payments from your annuity. | You might choose a 10-year payout period for your annuity. | Retirement |
| Maturity Date | The date when your annuity contract reaches its end, and payments may stop (depending on the type of annuity). | Some annuities have a maturity date, while others might offer lifetime income guarantees. | Retirement |
| Term | Definition | Simple Example | Insurance Type |
|---|---|---|---|
| Co-payment | A fixed amount you pay for certain covered medical services, like a visit to a specialist. | You might have a $20 co-payment for a doctor’s visit. | Health |
| Pre-existing Condition | A medical condition you had before you purchased your health insurance policy. Coverage for pre-existing conditions may be limited or excluded. | If you have diabetes before getting health insurance, there might be a waiting period before coverage applies. | Health |
| Outpatient Treatment | Medical care you receive without an overnight stay in a hospital. | Your health insurance might cover outpatient surgery or specialist consultations. | Health |
| Inpatient Treatment | Medical care you receive with an overnight stay in a hospital. | Your health insurance can help cover hospital room and board charges. | Health |
| Critical Illness | A severe illness covered by your insurance policy, such as cancer or heart attack. | A critical illness rider on your health insurance can provide a lump sum payout if you’re diagnosed with a covered critical illness. | Critical Illness |
[Please note, these are just some common Health & Critical Illness terms. Your specific policy may have additional terms]
| Term | Definition | Simple Example | Insurance Type |
|---|---|---|---|
| Disability Benefit | A monthly payment you receive if you’re unable to work due to illness or injury. | Disability insurance can replace a portion of your income if you become disabled. | Disability |
| Waiting Period | The period you must wait after becoming disabled before you start receiving benefits. | You might have a 30-day waiting period on your disability insurance policy. | Disability |
| Own Occupation Disability | Coverage that pays benefits if you’re unable to work in your own occupation, even if you can still work in another occupation. | If you’re a surgeon who can no longer perform surgeries (but could do another medical job), your own occupation disability insurance would likely provide benefits. | Disability |
| Any Occupation Disability | Coverage that only pays benefits if you’re unable to work in any occupation for which you’re reasonably suited based on your education, training, or experience. | To be considered fully disabled under this definition, you’d have to prove that you can’t perform any related job, making it more difficult to qualify for benefits. | Disability |
Key Points:
There you have it! Consider this glossary your secret tool to becoming insurance-savvy here in Singapore. Understanding these key terms will help you avoid surprises and make the most of your insurance protection. Now, go forth and insure with confidence!
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