Life Insurance Products & Riders

Life insurance products can be grouped in four ways:

• •By statutory insurance fund — under Section 16 of the Insurance Act 1966 licensed insurers must maintain insurance funds, keeping shareholder assets/liabilities separate from insurance business. Policies are Participating (with-profits: share in the fund's surplus and receive bonuses/dividends), Non-participating (without-profits: no bonus/dividend), or Investment-linked. Par and non-par may sit in the same fund (though separate funds are more common), but a separate fund MUST be maintained for Investment-linked policies.
• •By product type — classified by the purpose served: Term (death cover for a fixed term), Whole Life (death cover for whole of life), Endowment (death cover for a fixed term plus a lump sum at the end), ILP, Universal Life, Critical Illness, Medical Expense, Disability Income, Long-Term Care and Annuities.
• •By premium type — Single Premium, Recurrent Single Premium, Regular Premium, Yearly Renewable Premium, or Limited Premium Payment.
• •By ownership — Single Life, Joint Life, Third-Party, or Group.

Note: Whole Life and Endowment are offered in both participating and non-participating forms; Universal Life and Term are non-participating (source Ch3, 2.4-2.6).

A Single Life policy — the most common — is where the policy owner and the life insured are the same person. A Joint Life policy covers two lives (usually husband and wife) and is issued either First-to-die (pays on the first death, benefit goes to the surviving life insured and cover ends) or Last Survivor / Second-to-die (pays only when both lives have died). A Third-Party policy involves two persons where one party may own but not be covered, and the cover for the two parties can differ (e.g. a parent owns a policy on a child's life with a payor benefit rider). A covers many lives under a single held by the policy owner (usually the employer); when a member dies or leaves, only that member's cover ends while the plan continues.