Glossary
Act of God
An event that is caused by the forces of nature without human intervention and could not have been prevented by reasonable care. For example, floods, lightning, earthquakes and hurricanes are considered Acts of God.
Acquisition Cost
The cost that a company incurs to secure business e.g. commission to Sales Advisor / Consultant.
Actuary
An expert who applies the mathematical theory of probability and statistical principles to the insurance / takaful business.
Adjuster
A person who carries on the business of investigating the cause and circumstances of a loss and ascertaining the quantum of loss.
Administrator
A person who is appointed by the courts to act as fiduciary to manage an estate.
Adverse Selection (Anti Selection)
Adverse selection is the adverse impact on an insurer/takaful operator when risks are selected that have a higher chance of loss than that contemplated by the applicable insurance/takaful contribution rate.
Advisor / Consultant
One who solicits, negotiates or effects contracts of insurance policies/takaful certificates on behalf of an insurance company/takaful operator.
Application/Proposal Form
A form on which a prospective individual discloses facts as requested by the insurance company / takaful operator on the basis of which (together with information from other sources e.g. medical examiner) the insurance company / takaful operator decides whether to accept the risk, modify the coverage, or decline the risk.
Assignment
The act of transferring the policy / certificate owner's legal rights under his/her insurance policy / takaful certificate to another person / party, who is known as the assignee.
Assignment (Absolute)
The irrevocable and complete assignment of a policy / certificate to another person.
Assignment (Conditional)
An assignment that is operational under specific conditions. For example, the legal rights under a life insurance policy / family takaful certificate may be transferred to a third party as collateral for a loan. The legal rights must be transferred back to the original owner upon repayment of the loan.
Assignor
The party who effects the transfer of his/her legal rights under an insurance policy / takaful certificate to another party by means of an assignment.
Attained Age
The age of which an individual has reached on a given date.
Automatic Premium Loan
An option in which any outstanding premium at the end of the grace period will be paid for and charged back to the policy as a policy loan, provided the premium is not in excess of the policy cash surrender value on the premium due date.
Average Clause
Stipulates that an insurance company / takaful operator is only liable for such proportion of the loss as the sum insured / sum covered bears to the total value at risk. For example, the insurance company / takaful operator will reduce its liability for a claim if your vehicle is under-insured (i.e. the sum insured / sum covered at the time of loss is less than the market value of the vehicle).
Note: The above glossary and explanation do not necessarily bear their legal meanings as they are prepared strictly for the information of readers who are unfamiliar with certain terms and expressions.
An event that is caused by the forces of nature without human intervention and could not have been prevented by reasonable care. For example, floods, lightning, earthquakes and hurricanes are considered Acts of God.
Acquisition Cost
The cost that a company incurs to secure business e.g. commission to Sales Advisor / Consultant.
Actuary
An expert who applies the mathematical theory of probability and statistical principles to the insurance / takaful business.
Adjuster
A person who carries on the business of investigating the cause and circumstances of a loss and ascertaining the quantum of loss.
Administrator
A person who is appointed by the courts to act as fiduciary to manage an estate.
Adverse Selection (Anti Selection)
Adverse selection is the adverse impact on an insurer/takaful operator when risks are selected that have a higher chance of loss than that contemplated by the applicable insurance/takaful contribution rate.
Advisor / Consultant
One who solicits, negotiates or effects contracts of insurance policies/takaful certificates on behalf of an insurance company/takaful operator.
Application/Proposal Form
A form on which a prospective individual discloses facts as requested by the insurance company / takaful operator on the basis of which (together with information from other sources e.g. medical examiner) the insurance company / takaful operator decides whether to accept the risk, modify the coverage, or decline the risk.
Assignment
The act of transferring the policy / certificate owner's legal rights under his/her insurance policy / takaful certificate to another person / party, who is known as the assignee.
Assignment (Absolute)
The irrevocable and complete assignment of a policy / certificate to another person.
Assignment (Conditional)
An assignment that is operational under specific conditions. For example, the legal rights under a life insurance policy / family takaful certificate may be transferred to a third party as collateral for a loan. The legal rights must be transferred back to the original owner upon repayment of the loan.
Assignor
The party who effects the transfer of his/her legal rights under an insurance policy / takaful certificate to another party by means of an assignment.
Attained Age
The age of which an individual has reached on a given date.
Automatic Premium Loan
An option in which any outstanding premium at the end of the grace period will be paid for and charged back to the policy as a policy loan, provided the premium is not in excess of the policy cash surrender value on the premium due date.
Average Clause
Stipulates that an insurance company / takaful operator is only liable for such proportion of the loss as the sum insured / sum covered bears to the total value at risk. For example, the insurance company / takaful operator will reduce its liability for a claim if your vehicle is under-insured (i.e. the sum insured / sum covered at the time of loss is less than the market value of the vehicle).
Note: The above glossary and explanation do not necessarily bear their legal meanings as they are prepared strictly for the information of readers who are unfamiliar with certain terms and expressions.