Life Insurance Terminology And Definitions

Insurance, explained

A dictionary of key life insurance terms, simplified.

Accidental death benefit

An optional provision on a life insurance policy that pays out if the life insured dies due to an accident within 30 days.

Additional benefit

Optional covers that can be added to a policy for free or for an additional charge, depending on the type of policy purchased. Some examples are critical illness, permanent and total disability and hospitalisation cover.

Additional life cover

An increase in the life cover amount on a joint life policy due to changing financial protection needs of the lives insured. It is paid out on the death of the first life insured of the joint life policy.

Aeroplane cover

A free benefit that pays out a lumpsum amount if the life insured dies due to an aeroplane crash.

Assets under management

Assets under management (AUM) is the total market value of the investments that a financial institution manages on behalf of their clients. 

Additional Voluntary Contribution

AVC (Additional Voluntary Contribution) is the contribution that you voluntarily add to your plan in addition to the mandatory contribution from the employer to build your savings

AEI (Automatic Exchange of Information)

A global tax standard that governs how certain authorities exchange information with one another.

AMC (Annual Management Charge)

The charge deducted for managing your account.