Insurance glossary

Policyholder / life insured (Insured)

The person who buys the life policy and is covered under it. On death or survival to the end of the term, the insurer pays benefits as stated.

Beneficiary

The person named in the policy to receive the death or maturity benefit when the policyholder dies.

Insurance policy (Policy)

The life insurance contract listing cover, conditions, agreements, and exclusions.

Sum assured

The maximum the insurer will pay under the policy for covered events such as death or survival to term end.

Premium

The amount the policyholder pays the insurer to keep cover in force.

Application form

The form used to apply, stating policyholder, premium payer, and beneficiary details.

Policy term

How long the life policy remains in force under the contract.

Grace period

Extra time allowed to pay an overdue premium while the policy stays in force.

Cash surrender value

Money returned if you cancel before maturity; it usually grows the longer premiums have been paid.

Maturity benefit

Amount paid to the policyholder if they survive to the policy maturity date.

Cashback / survival benefit

Payments made when policy conditions are met, e.g. after premiums are paid as planned.

Health declaration

Answers about the applicant’s health used in underwriting.

Death benefit

Amount paid to beneficiaries when the policyholder dies while the policy is in force.