IUL glossary (100+ terms, English and Chinese)

A long-term life policy with an account value. The interest on the account value is not declared by the insurer but calculated by a contract formula that references the movement of an index over the crediting period, subject to parameters such as a floor, a cap rate and a participation rate.

Life insurance in which protection and an account value coexist, and in which premiums and the sum assured can be adjusted within the contract. The account earns a crediting rate and has charges deducted continuously. MoneySense calls it a bundled product that provides insurance protection and an investment return together.

A universal life policy whose crediting rate is declared by the insurer from time to time and has a guaranteed minimum. It differs from an IUL in the source of its interest; protection, charges and lapse mechanics are essentially the same.

A universal life policy whose account value is invested in sub-accounts chosen by the policy owner. The owner bears the investment outcome, and there is usually no floor at the contract level. Interest is not credited in the way it is for an IUL.

A policy in which premiums buy fund units and the policy value moves with unit prices. In Singapore the LIA prescribes different benefit illustration formats for ILPs and for universal life.

A policy that does not share in the profits of the insurer's participating fund. Its benefits come from the guaranteed part of the contract and possibly a non-guaranteed part. IUL plans in Singapore usually describe themselves as non-participating universal life.

A policy that shares in the profits of the insurer's participating fund, with bonuses that are not guaranteed. The LIA consumer guide explains that bonuses depend on the fund's investment performance, claims experience and expenses.

The amount the insurer pays under the contract formula when the life assured dies. It is commonly the higher of the basic sum assured and the account value, or the basic sum assured plus the account value, with any outstanding loan and charges due deducted before payment.

The amount of cover agreed in the contract, which is the basis for determining the death benefit and the cost of insurance. Whether it can be reduced, and what a reduction does to the guarantee conditions, is as set out in the contract.

The death benefit less the account value, that is, the amount of risk the insurer carries outside the account. The cost of insurance is calculated on it, and its size depends on the death benefit formula.

The policy owner is the party to the contract and pays the premiums. The life assured is the person on whose life the policy is taken out. The beneficiary is the person who receives the death benefit. They may be one person or different people.

An arrangement under which the life assured of a policy is replaced by another person, often used for multi-generation ownership. The insurer's consent is usually needed; the number and timing of changes vary by product, and a change may affect the no-lapse guarantee.

Single premium means the whole premium is paid at once. Flexible premium allows payment in instalments within the contract limits and adjustment of the amounts. Flexible-premium versions usually carry a minimum premium requirement, and keeping them in force is more complex.

The balance of the accounts after interest has been added and charges deducted; it is the base for crediting and for deductions. It is not the same as the amount that could be taken out by surrendering now.

The amount that can be taken out by surrendering now, usually the account value less the surrender charge and any outstanding loan. In the early years the surrender value may be zero or below the premiums paid.

The part of a premium that actually enters the fixed account, holding account or index account after the premium charge is deducted. It is the starting point for crediting and later deductions in each account.

An account credited at a rate declared by the insurer, with a guaranteed minimum crediting rate stated in the contract; it is not linked to an index. The current rate can be higher than the guaranteed minimum but is not guaranteed.

A transitional account in which net premium waits before a segment starts, credited at the holding account rate. Not every product has one; the points to check are the rate during the transition and the longest time money can stay there.

An account credited by an index formula. It holds no shares or funds and is only the unit in which interest is calculated. It usually has a floor, combined with a cap rate or a participation rate.

The unit in which a sum of money in the index account earns interest over one crediting period, with its own start date, end date and applicable parameters. Several segments often exist in one policy at the same time.

The period from the start to the end of a segment. One year is the term of the benchmark index account in US AG 49-A; for Singapore products the segment term is as set out in the contract.

The date on which the starting index level and the applicable parameters of a segment are fixed, usually several working days before the segment start date; the exact number of days is as set out in the contract.

A method that compares only the index level at the start and at the end of the crediting period to calculate the gain or loss, so that movements in between and the highest level reached do not affect the result. The SEC bulletin describes it in the same way.

A method used within a multi-year crediting period, which compares the index each year from that year's starting level and then adds up the credits. Whether a product uses it is as set out in the product summary.

A method that credits interest by comparing the average of the index values at several points in the crediting period (for example monthly) with the starting value. The SEC bulletin calls this averaging, and it is calculated differently from point-to-point.

The rate at which the insurer credits the account under the contract. For traditional universal life it is declared by the insurer; for the index account of an IUL it is calculated by the contract formula.

A crediting rate written into the contract that the insurer may not go below. The fixed account and the index account (the floor) each have one. The current rate can be higher than it but not lower.

A rate added on top of the crediting rate after a certain number of years' holding. Whether it is guaranteed, from which policy year it counts and which accounts it applies to vary by product.

The proportions in which net premium is divided between the fixed account and the index accounts, and among several indices. When and how often it can be changed is as set out in the contract.

Reallocating existing account value between the fixed account and index accounts, or between different indices. There are usually limits on the windows in which this can be done and on the minimum interval between changes.

Spreading the money entering the index account over several consecutive segments to diversify the entry date. Whether it is offered, and over how many months, is as set out in the product summary.

A crediting period in which index interest is 0%. The cost of insurance and policy fee are deducted as usual, the account value usually falls, and several such years in a row can erode the account value.

The maximum index interest that can be credited for a single segment. With a 10% cap rate, for example, an index gain of 20% still credits only 10%. It is a non-guaranteed parameter unless the contract states a guaranteed minimum.

The proportion of the index gain that is used for crediting. With a participation rate of 80% and an index gain of 9%, 7.2% is credited (an example from the SEC bulletin). A rate of 120% means the gain is multiplied by 1.2, not that 20 percentage points are added.

A fixed number of percentage points deducted from the index gain first. With an index gain of 9% and a spread of 3%, 6% is credited (an example from the SEC bulletin). It is part of the crediting formula and is not a fee deducted from the account value.

The minimum index interest credited for a single crediting period, commonly 0%. It guarantees only that index interest is not negative and does not protect the account value after charges. The floor of an individual product may be above 0%.

A design in which index falls within the buffer range are not credited, while any fall beyond it may still be recorded as negative. Its risk profile differs from that of a 0% floor; the calculation is as set out in the product summary.

A design that applies a factor on top of the index interest settled, usually at the price of a lower cap rate. Whether it is worthwhile depends on how the index moves.

An index account with no cap rate, usually paired with a participation rate and mostly corresponding to a volatility-controlled index. Such indices are volatility-managed and cannot be compared directly with a traditional price index.

A rate added on top of the crediting rate of a certain type of account. For example, the Prudential product page (12 October 2026) adds 0.25% a year for the uncapped index, subject to the participation rate for the period; whether it is guaranteed and the conditions that apply are as set out in the product summary.

The floors on cap rates and participation rates written into the contract. The insurer can adjust the current values but not below these, which should be checked together with the guaranteed column.

The sequence in which the participation rate, cap rate, spread and floor are applied in the formula. A different order can give a different result for the same index gain; the contract formula prevails.

A stock index compiled by S&P Dow Jones Indices covering about 500 large US companies, and one of the most common reference indices for IUL in Singapore. Most products use its price return.

Price return reflects only the movement in the index level and excludes the dividends of the constituents; total return assumes dividends are reinvested. The Singlife product page states that its index interest calculation excludes dividends.

An index that deducts a cash benchmark rate from the return of the underlying assets. Other things being equal, it performs below a similar index that does not deduct that rate.

An index that adjusts its exposure to the underlying assets dynamically according to forecast volatility, so as to keep overall volatility near a target. Its path differs from that of a traditional price index, and it is often paired with an uncapped design with a participation rate.

The annualised volatility target in the design of a volatility-control index, for example 6%. Exposure is reduced when forecast volatility is above the target and raised when it is below. The target does not indicate a level of return.

The index's holding in the underlying assets (such as S&P 500 futures), adjusted with forecast volatility. There is usually a ceiling; the details are as set out in the index methodology.

The index adjusts its exposure several times within a trading day so that it tracks the volatility target more promptly. Great Eastern's indices page (as at 21 November 2025) uses this description for its Engle 6% index; the more often it rebalances, the more simulated transaction cost is reflected in the index.

A deduction of simulated transaction costs in the calculation of the index, so that the index level is slightly lower than it would be without them. It is an internal rule of the index, not a policy charge.

An index made up of several asset classes, such as equities, bond futures and gold futures, and rebalanced by rule. For example, the constituents of the UBS Multi Asset Engle 6% index are described on Great Eastern's indices page (as at 21 November 2025).

A hypothetical history calculated by applying the rules before an index was published. It is not what actually happened, does not represent future performance and should be read separately from live data.

The date on which an index was formally published and began to be calculated in real time. Data after it are live data and data before it are back-tested, and the two should be read separately. For example, S&P DJI discloses that the S&P 500 Engle 6% VT TCA index was launched on 7 March 2025 (as relayed in a Great Eastern brochure).

Under US AG 49-A, the number of whole years between the index's earliest start date and the illustration date. For a policy sold from 1 April 2026, if the historical period is under 10 years, the historical table for that index may not be shown.

The institution that compiles, calculates and publishes an index, such as S&P Dow Jones Indices or UBS. The counterparty to the policy contract is the insurer. The index sponsor is not a party to the contract, and its disclaimer usually states that it gives no assurance about policy outcomes.

The money the insurer can use to buy hedging options, usually the general account earned rate less default cost, expenses and the profit target (SOA, August 2022). When interest rates rise the budget increases and can support higher cap rates.

A combination of buying a call option with a lower strike and selling a call option with a higher strike, whose payoff increases as the index rises and stops increasing at the upper limit. Insurers use it to match a capped crediting structure.

The market's expectation of future volatility, inferred from option prices. Higher volatility generally makes options more expensive and, with the budget unchanged, may depress the participation rate.

The insurer's own pool of assets supporting policy liabilities, mainly fixed-income assets such as bonds. The index interest of an IUL comes from the options bought with its earnings, not from shares held in the account.

A term used in AG 49-A: for each index account, the annualised amount assumed to be used to generate index interest, expressed as a percentage of the account value, which must be consistent with the insurer's hedging programme.

A percentage deducted first from each premium paid, leaving the net premium. The percentage varies with the payment method and policy year, and single premium and instalments may be charged differently; the product summary prevails.

A fee set by sum assured or as a fixed amount and deducted monthly from the account value. Most are charged only for the first several policy years, and the term is as set out in the product summary.

The charge for death cover, equal to the net amount at risk multiplied by the unit rate for the attained age, usually deducted monthly. MoneySense notes that such charges generally increase with age.

A charge to cover the cost of administering the policy. Its name and the way it is collected vary by product, and in some it is folded into the policy fee, as set out in the contract. When checking, confirm how long it is charged and whether it is subject to a maximum.

A charge deducted on surrender within the term set by the contract, usually declining by policy year and removed when the term ends. The length of the term varies by product.

A charge that may apply when part of the account value is withdrawn. MoneySense notes that insurers may charge for partial withdrawals and that the sum assured may also be reduced as a result.

Maximum charges are the upper limits stated in the contract that may not be exceeded; current charges are the levels now being charged, which the insurer can adjust within the limits. The guaranteed column of a benefit illustration uses maximum charges and the illustrated column uses current charges.

The total distribution-related cost the insurer expects to incur on the policy, including commission, benefits paid to the distribution channel and servicing cost. The LIA explains that it is already built into the premium pricing and is not an extra charge.

A document issued by the insurer under regulatory or industry guidelines which shows, on assumptions, how the policy values may change. In Singapore it is governed by the LIA guidelines; it is an explanation, not a contract term.

The illustration column calculated at the guaranteed minimum crediting rate and maximum charges under the contract. It represents the least favourable case the contract allows and may show the policy lapsing before a certain age.

The illustration column calculated at the current crediting rate and current charges. The LIA template explains that these rates and charges are not guaranteed and can be adjusted by the insurer within the guaranteed limits.

The crediting rate assumed in a benefit illustration. It is set by the insurer within the regulatory ceiling and is an assumed scenario, not a forecast and not a return received every year.

An annualised measure the LIA requires to be disclosed: the annualised yield of the surrender value relative to premiums paid on surrender at age N, one for each of the two scenarios. N is the greater of age at entry plus 40 years and age 65.

Guaranteed means the part written in the contract that the insurer must honour, such as the floor, the guaranteed minimum crediting rate and maximum charges. Non-guaranteed means the part that can be adjusted or depends on actual outcomes, such as cap rates, participation rates and current charges.

A document setting out a product's main terms, its guaranteed and non-guaranteed items, its charges and its risks, to be read together with the benefit illustration. The LIA cover page explains that the details of current and maximum charges are in the product summary.

A disclosure page the LIA requires to accompany a benefit illustration, setting out the product type, the main risks, the guaranteed and non-guaranteed items, and the illustrated yield upon surrender under the two scenarios.

14 days from receipt of the policy documents, during which written notice can cancel the policy, with the premiums paid refunded less the medical examination and other expenses the insurer has paid (MoneySense, LIA).

A second set of figures that US AG 49-A requires to be shown side by side with the illustrated scale and with equal prominence. Its index rate may not exceed the lower of "the maximum of the illustrated scale less 100 basis points" and "the fixed account rate".

A report on the state of the policy that the insurer sends the owner each year. It usually shows the account value, charges deducted, index interest credited and the loan balance; the exact content is as set out in the contract.

A loan from the insurer based on the cash value of one's own policy, on which the insurer charges interest. Unpaid principal and interest are deducted from the death benefit or surrender value.

A design in which the loaned portion is credited at roughly the same rate as the loan interest rate, so that the net cost is close to zero. The name and the exact practice vary from company to company.

A design in which the loaned value still participates in index crediting, so that the net result depends on the difference between that year's index interest and the loan rate. In a year when the index credits 0%, only loan interest is charged.

Permanently taking part of the account value out, with no repayment required, which lowers the account value and may reduce the sum assured or trigger charges. Before using it, check the free allowance, any term limits and the effect on the no-lapse guarantee.

The policy terminates and cover ends when the account value is insufficient to pay charges and no payment is made within the grace period. MoneySense: if the cash value falls to zero, the policy lapses unless premiums are topped up.

When its conditions are met, the policy does not lapse during the guarantee period even if the account value is insufficient. The term and conditions vary by product; common conditions include paying a minimum premium and not changing the life assured.

The minimum cumulative premium a flexible-premium policy must pay to keep a no-lapse guarantee or related cover. The amount and the testing period are as set out in the contract.

The extra time the insurer gives to pay after the premium due date, during which the policy stays in force. The LIA consumer guide says it is usually about 30 days; for universal life the contract prevails.

If the policy has enough cash value after the grace period, the insurer pays the overdue premium with a policy loan, and the owner pays interest on that loan (LIA consumer guide). Some policies do not offer it.

A mechanism in some products: when the account value falls because of charges, the contract retains a minimum surrender value so that the policy can continue. It is not the same as adding to the account value.

An application to restore a policy after it has terminated, within a set period. The LIA consumer guide says the period is usually about two years, the insurer's conditions must be met, and fresh underwriting and payment of arrears may be required.

Borrowing from a bank or other financial institution to pay premiums, usually with the policy rights assigned to the lender as collateral (HKMA definition). The creditor is a bank, which differs from a policy loan.

Transferring policy rights to another person or institution, which requires written notice to the insurer (LIA consumer guide). Assignment is common in financing, and assignment revokes a revocable nomination.

The lender asks the borrower to provide additional collateral or repay early when the value of the collateral falls or is insufficient. It is one of the main risks of premium financing.

Singapore's central bank and integrated financial regulator, which supervises licensed insurers. An insurer can be described as "regulated by MAS", but that does not mean MAS endorses a given product.

The industry association for Singapore's life insurance sector. It issues industry documents such as the benefit illustration guidelines, the underwriting guide and the nomination guide, and publishes consumer guides in cooperation with MoneySense.

A protection scheme administered by SDIC. According to SDIC, the cap on guaranteed sum assured is S$500,000 per life assured per insurer and the cap on guaranteed surrender value is S$100,000; non-guaranteed benefits are outside the scheme.

An individual or institution that meets the asset or income thresholds under the Securities and Futures Act and must opt in under the opt-in regime, in force from 8 January 2019, to be treated as an accredited investor. The thresholds are as in the current text of SFA section 4A.

A nomination made under the Insurance Act 1966 which can name only a spouse and children, cannot be changed unilaterally once made, and requires the beneficiaries' written consent for a loan, surrender or change to the policy (LIA nomination guide, March 2026).

The other kind of nomination under the Insurance Act 1966, which the owner can change but which is revoked once the policy is assigned (LIA nomination guide, March 2026). An assignment in premium financing is of this kind, and the nomination lapses with it.

The policy owner must have a legally recognised interest in the life of the person insured before a life insurance contract can be made. The precise scope is as in the current text of the Insurance Act 1966.

A basic principle of insurance contracts: the applicant must disclose material information truthfully and completely. The LIA underwriting guide explains that untrue, incorrect or incomplete information may invalidate the contract or lead to a claim being declined.

MAS's category of systemically important insurers, subject to a 25% capital add-on, with the framework in effect from 1 January 2024. Neither this status nor a rating means that the government or a regulator guarantees a policy.

A US NAIC guideline on benefit illustrations for policies with index-linked crediting, applying to policies sold in the United States on or after 14 December 2020, which limits the illustrated rate, loan leverage and the display of historical data. Singapore policies are not subject to it.

An insurance contract with a cash value. For CRS purposes the cash value is the greater of the amount obtainable on surrender (without deducting surrender charges or policy loans) and the amount that can be borrowed (IRAS e-Tax Guide).

The international standard for the automatic exchange of tax-related information on financial accounts. Singapore has exchanged information with partner jurisdictions since September 2018; the IRAS guide brings cash value insurance contracts within reporting, with the year-end cash value or surrender value reported.

26 U.S.C. §7702 defines a life insurance contract for tax purposes, and §7702A treats a contract that fails the 7-pay test as a modified endowment contract (MEC). It applies only to the US tax system and does not apply to Singapore policies.

IRAS states that Singapore no longer levies estate duty on deaths on or after 15 February 2008 (updated 9 March 2026). This is a feature of the tax system, not an attribute of IUL itself. If a beneficiary is tax resident elsewhere, the local rules must be confirmed separately.

An IRAS individual income tax relief with conditions such as the insurer having an office or branch in Singapore and CPF contributions in the previous year being below S$5,000 (Year of Assessment 2026). Whether it applies to a particular policy should be confirmed with IRAS.