Life Insurance M5 Flashcards

What is the purpose of the benefit illustration for life insurance?

Answer: To show projected returns and benefits under different scenarios

A benefit illustration shows the policyholder projected benefits under optimistic and pessimistic investment scenarios, helping them understand potential outcomes.

What is the Total and Permanent Disability (TPD) benefit?

Answer: A benefit paid if the insured becomes totally and permanently disabled

TPD benefit provides a lump sum payment if the insured becomes totally and permanently disabled and unable to work, as defined in the policy terms.

What is the nomination of beneficiaries under the Insurance Act?

Answer: A legal designation of who will receive the policy proceeds upon death

A nomination legally designates who will receive the insurance proceeds. In Singapore, nominations can be revocable or irrevocable under the Insurance Act.

What is a critical illness rider?

Answer: An add-on that pays a lump sum upon diagnosis of a specified critical illness

A critical illness rider provides a lump sum benefit upon diagnosis of a specified critical illness such as cancer, heart attack, or stroke.

What is the difference between revocable and irrevocable nominations?

Answer: Revocable nominations can be changed anytime; irrevocable nominations cannot be changed without the nominee's consent

A revocable nomination can be changed by the policyholder at any time. An irrevocable nomination cannot be changed without the written consent of the nominee.

What is the Dependants' Protection Scheme (DPS) in Singapore?

Answer: A government-backed term life insurance that covers Singaporeans and PRs against death and TPD

DPS is a government-backed, opt-out term life insurance scheme that provides basic coverage against death, terminal illness, and total permanent disability for working Singaporeans and PRs.