Some definitions or explanation related to investment and insurrance.

Absolute Return

The actual profits gained through an investment.

Annual Management Fee

The annual fee required to pay fund managers for overseeing a fund's holdings.

Annual Return

The total annual return on an investment, including dividend payments and capital.

Asset Allocation

A distribution of capital invested among different assets (such as stocks, bonds, real estate and cash) to optimize the risk/reward balance.

Asset Under Management (AUM)

The market value of assets that an investment company manages on behalf of investors.


All legal and beneficial rights under an insurance policy are designated to another party.


A quantitative standard which allows a fund's performance to be measured, usually in the form of a well-known market index or a combination of indexes.


A beneficiary of a life insurance policy is the person or people chosen and who will receive the death benefits when the insured passes away.

Bid Price

The amount a buyer is willing to pay for an investment option. The opposite would be the ask price, which is the amount that the seller is looking to receive.

Bond Fund

A fund that invests in debt securities, usually issued by governments and corporations. Their primary objective is to provide a stable income with minimal capital risk. They carry advantages such as often higher returns compared to money market funds and fund managers can trade and take advantage of interest rate movements, they also carry disadvantages such as a risk of rising interest rates and credit risk of the issuer.


Monetary investments to a savings or investment plan. Often they are either regular contributions (a fixed sum contributed over a specific period) or lump sum contributions (one time investments) so long as the amount meets the minimum fund's requirements.

Contribution Payment Term

The specific period that the policyholders need to pay the contributions, including additional regular contributions (if any).

Cooling-off Period

When purchasing a long-term insurance policy, customers are given a cooling-off period to review the terms and conditions of the policy before they finalize the purchase. During this period, the policyholder has the right to cancel the policy and obtain a refund of the insurance premium paid (may subject to market value adjustments), should the policyholder change their mind.

Customer Protection Declaration

A form that must be completed and signed by customers. It serves as evidence that an insurance intermediary has clearly explained to a policyholder the consequences and potential disadvantages of replacing an existing policy.

Death Benefit

Proceeds payable upon death of the insured by the insurer.

Direct fund approach

Direct Fund Approach is an approach to operate investment choices by insurance companies, which ensures that its corresponding underlying funds are in line with the investment exposure, fees and charges, and investment returns of the chosen investments.


The strategy of allocating investment capital across different asset types in order to minimize the overall volatility and risk of the portfolio.


Non-guaranteed payments derived from an insurance company's surplus and distributed to participating policies. The amount of each dividend is determined by the company and depends on the company's overall performance.

Dollar Cost Averaging

The strategy of investing a fixed amount of money at regular intervals, regardless of the share price. This helps investors to average out the cost of units throughout an overall investment period, which may minimize the effects of short-term market fluctuations and unfortunate timing.


A written document attached on the original policy to amend or supplement the original provision.

Equity Fund

A fund that invests primarily in stocks, often with the goal of providing long-term capital growth. Equity funds have a higher historical return and are good hedges against inflation, but may require higher management fees.

Fixed Income Fund

An investment that offers regular returns by investing in fixed-income securities such as bonds.

Grace Period

A specified period of time in which a policy remains in effect despite a due renewal premium.

Illustration Document

A document that clearly outlines the surrender values over the term of the policy, based on several assumed net rates of returns.

Insurable Interest

A legal right to insure an individual’s life and is a must for an insurance to commence.

Investment-linked Assurance Scheme

An insurance policy that provides policyholders with life insurance plus investment features. Its policy value is generally connected to the performance of the investments chosen by the policyholders.

Level Premium

Premium rates are based on the insured's attained age and remain the same for the duration of the contract.


When a policy expire.

Mirror fund approach

An approach applied by an insurance company for operating its investment choices, under which investment exposure, fee and charges and investment returns of the chosen investments may differ from the corresponding underlying funds.

Money Market Fund

A money market fund's invests in short-term securities and offers a safe place to invest easily accessible, cash-equivalent assets.

Mutual Fund

A fund that is comprised of the funds of many investors to invest in stocks, bonds, money market instruments and similar assets.

Net Asset Value (NAV)

Fund’s total assets minus its total liabilities.

Policy Term

The time period in which an insurance policy stays in force.


The person or business that owns an insurance policy.


The entire set of financial assets. This includes stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held by investors and/or managed by financial professionals.


When an investor's principal in an investment scheme, such as preferred stocks or bonds, is returned, or units in a mutual fund is sold.

Redemption Fee

The amount that is charged to investors when they sell or redeem shares.


A provision that allows policyholders to resume the coverage of a policy in which the renewal premium has not been paid, if certain requirements are fulfilled.


An amendment or addition to an insurance policy that can expand or limit the benefits payable under the contract.

Sum Insured

The maximum amount that is payable in the event of a claim.


When a policyholder decides to terminate their insurance policy.


The ability for policyholders to transfer investment choices or make changes to their investment portfolios.


The process of evaluating the risk represented by the proposed insured. The proposed insured's health and financial status are assessed to determine the insurable coverage and the corresponding premium rate for the proposed insured.

Unit Trust

A fund structure in the form of collective investment that is set up under a trust deed. Profits are passed to individual owners, rather than reinvested, meaning the investors are the beneficiaries under the trust.

Waiting Period

A specific amount of time required before some or all insurance coverage will begin.


The ability for policyholders to take out a part of the value of the policy, as long as certain conditions are fulfilled.