Hong Kong and Singapore participating life glossary (45 terms, Chinese and English)

(HK / SG) A life policy under which, in addition to the benefits guaranteed in the contract, the policyholder shares in the experience surplus of the participating fund. Bonuses are non-guaranteed and are declared by the insurer in line with its bonus philosophy and smoothing policy. In Hong Kong, participating business is defined in section 21B of the Insurance Ordinance; in Singapore, its management and disclosure are governed by MAS Notice 320.

(HK / SG) A participating policy whose cover lasts for life or to a very advanced age, with a death benefit and surrender value made up of a guaranteed part plus non-guaranteed bonuses. Most of what Hong Kong commonly calls a savings-type participating plan, and Singapore participating whole life, take this legal form.

(HK, market term) The Hong Kong market's name for participating whole life focused on building up cash value, with a relatively low death benefit multiple; often shortened to "savings plan". It is not a statutory product category, and it differs from a Singapore endowment, which has a fixed maturity date.

(HK / SG) Benefits written into the contract that do not vary with participating fund performance, such as the guaranteed cash value and guaranteed death benefit. For Singapore participating policies, any asset shortfall in guaranteed benefits must be made good by shareholders (LIA guide); guaranteed benefits still depend on the insurer's solvency.

(HK / SG) Benefits declared by the insurer whose amount depends on the participating fund's future experience, including annual dividends, reversionary bonuses and terminal bonuses. The non-guaranteed part of a benefit illustration is only an illustration based on an assumed return; actual amounts may be higher or lower.

(HK / SG) The total amount payable on surrender, generally the guaranteed cash value plus the cash value of declared bonuses and any terminal bonus, less policy loans and amounts owed. The guaranteed cash value is usually low in the early premium-paying years and rises with each policy year.

("Life insured" in Hong Kong; "life assured" is common in Singapore) The person whose life is the subject of the insurance; their death triggers the death benefit. The life insured need not be the same person as the policy owner, who holds the rights under the policy, but there must be an insurable interest at the time of application.

(HK / SG) The person who receives the benefit when the life insured dies. In Hong Kong, beneficiaries are designated by the policyholder in the policy; in Singapore, they are appointed by trust nomination or revocable nomination under the Insurance Act, and the official term is "nominee". Without a valid designation, the proceeds generally fall into the estate.

(HK / SG) A separate fund an insurer sets up for participating business; premiums net of charges are invested in it, and bonuses come from its experience surplus. Hong Kong's GL34 requires identification of assets and liabilities, surplus distribution and separate reporting; Singapore caps shareholder distributions; see Regulation.

(HK) A cash dividend declared each year on some Hong Kong participating policies, which can be taken in cash, left to accumulate at interest or used to offset premiums; the accumulation rate is non-guaranteed. When calculating the annual dividend fulfilment ratio, the IA Interpretation Notes assume that all dividends are left to accumulate at the actual rate.

(HK / SG) A bonus added to the policy as an increase in the sum assured. The Singapore guide explains that once added, a reversionary bonus becomes part of the guaranteed benefits and cannot be taken back, but on surrender it is paid only at its cash value, which is below its face value. In Chinese, some Hong Kong products also call it "归原红利".

(HK / SG) A non-guaranteed bonus paid in one sum only on a death claim, surrender or maturity; it does not vest before payment and can be adjusted in line with fund experience. Terminal bonuses make up a high and volatile share of savings-type participating plans, so their fulfilment ratios need to be read separately.

(HK) The average ratio of non-guaranteed bonuses actually declared to the bonuses illustrated under the best-estimate scenario at the point of sale. Insurers must disclose it on their websites by product series, year by year for the latest 10 policy years, updated no later than 30 June each year (IA Interpretation Notes on GL16). Past fulfilment ratios do not indicate future distributions.

(HK) An insurer's statement of the principles by which it determines, distributes and smooths bonuses. According to law firm commentary, the GL16 revised by the IA in 2026 requires the bonus philosophy and the factors affecting bonuses to be disclosed at the point of sale, and policyholders must be notified, with clear reasons, of any change in bonuses or in the philosophy for determining them.

(HK / SG) The practice of spreading short-term gains and losses of the participating fund over several years of declarations to reduce year-to-year volatility in bonuses. The revised GL34 in Hong Kong requires smoothing to be supported by quantitative analysis and to avoid inappropriate cross-subsidies between bonus types; in Singapore, the smoothing approach must be disclosed in the product summary.

(Benefit illustration document in Hong Kong; PI in Singapore) The year-by-year illustration of guaranteed and non-guaranteed benefits provided at the point of sale. Hong Kong requires base, optimistic and pessimistic scenarios; SGD participating policies in Singapore are illustrated at a higher and a lower investment rate of return. Illustrations in both markets are subject to caps and do not represent actual results.

(HK / SG, measuring different things) A ceiling on the return used in point-of-sale illustrations. Since 2025-07-01, Hong Kong has capped the customer IRR at 6.0% for HKD policies and 6.5% for non-HKD policies; since 2021-07-01, Singapore has capped the investment rate of return for SGD participating policies at 4.25% / 3.00%. The two cannot be compared directly.

(HK) The measure to which Hong Kong's illustration cap applies: the annualised return of the illustrated total surrender cash value relative to total premiums paid over the life of the policy, applying to all premium payment modes, policy terms, policy options (such as withdrawals) and all illustration scenarios. It is a cap on illustrations, not a guarantee of returns.

(SG) The participating fund's expense ratio over the past three years, which MAS Notice 320 requires to be disclosed in the participating product summary, reflecting operating and investment expenses relative to fund assets. Together with the past three years' net investment returns and bonus rates, it can be used to assess whether bonuses are sustainable.

(SG; the Hong Kong equivalent is the annual policy statement and bonus notice) The update on bonuses and policy values that MAS Notice 320 requires to be sent every year in Singapore. The revised GL16 in Hong Kong requires at least annual notification of declared non-guaranteed benefits, together with updated in-force policy projections.

(HK, product feature) Some Hong Kong savings-type participating plans allow part of the basic plan's units to be carved out as a separate policy, usually keeping the original effective date. The starting year, number of splits a year, minimum units and life insured requirements vary by product, and insurer approval is required. No equivalent provision was found in the published Singapore product documents this site reviewed.

(HK / SG, product feature) Some products allow the life insured to be replaced by another person; cover on the original life insured ends and riders usually end too. Evidence of insurability for the new life insured and an insurable interest are required; products in the two markets differ widely in the number of changes, eligible persons (often limited to a spouse or child in Singapore) and waiting periods.

(HK, product feature) Some Hong Kong products allow the basic plan, after a specified policy anniversary, to be converted into a new plan in another currency designated by the insurer. The new plan's benefits and bonus philosophy may differ, the exchange is made at the rate prevailing at the time with gains and losses borne by the policyholder, and insurer approval is required.

(HK, product feature) A person named in advance by a living policyholder to take over as policyholder on their death, so that a policy whose owner and life insured are different people can continue. Whether one can be named, how many and who qualifies depend on the product terms; a contingent policy owner is neither a beneficiary nor a trust arrangement.

(21 calendar days in Hong Kong / 14 days in Singapore) The period after purchase during which the policy can be cancelled and premiums recovered. In Hong Kong, under IA GL29, it runs from delivery of the policy or issue of the cooling-off notice, whichever is earlier; in Singapore, it runs from receipt of the policy documents, and medical examination and similar costs already paid may be deducted.

(HK / SG) An arrangement under which the customer borrows from a bank or other lender to pay part of the premium and assigns all or part of the rights under the policy to the lender as collateral. IA premium financing standards have applied in Hong Kong since 2023-01-01; in Singapore, no dedicated circular was found, and bank credit policies apply.

(HK) Important Facts Statement – Premium Financing. The IA's financing standards require customers to sign it before the policy is issued, to highlight the main risks of buying a policy with financing; a joint IA and HKMA review in 2024 found that in some cases it had not been signed before policy issue.

(HK) A risk concept in the IA's financing standards: if, when the lender demands early repayment, the customer can repay only from the policy's surrender value, there is over-leveraging. Insurers must verify assets or income and apply reasonable haircuts, and generally do not accept a self-occupied property as proof of assets.

(HK / SG) The transfer by a policyholder of all or part of the rights under a policy to another person, commonly as collateral for financing. After assignment, the policyholder generally cannot exercise the assigned rights, such as surrender, cooling-off cancellation or change of life assured, without the assignee's consent; in Singapore, an assignment revokes a revocable nomination.

(HK) A levy charged by the IA on policyholders and collected by insurers on its behalf; since 2021-04-01 it has been 0.1% of premiums, capped at HK$100 per policy year for long term policies. The levy is refunded if the policy is cancelled within the cooling-off period.

(HK / SG) A legally recognised interest that the applicant has in the continued life of the life insured. Section 64B of Hong Kong's Insurance Ordinance and section 146 of Singapore's Insurance Act both make a life policy without insurable interest void. Hong Kong's section 64A presumes that a parent or guardian has an insurable interest in a minor child; Singapore separately lists oneself, the spouse and persons on whom the applicant depends.

(SG) A nomination under section 132 of Singapore's Insurance Act: when a policyholder aged 18 or over nominates a spouse and/or children and indicates an intention to create a trust, the policy moneys become trust property, and revocation requires the consent of the trustee or beneficiaries. Eligibility depends on the legal provisions and legal advice.

(SG) A nomination under section 133 of Singapore's Insurance Act: anyone may be nominated, and the nomination may be revoked or changed at any time; an assignment of the policy revokes a revocable nomination. Since 2024-01-02, nominations can be made online.

(HK) Section 13 of the Married Persons Status Ordinance (Cap. 182): a life policy expressed to be for the benefit of the insured's spouse or children creates a trust for the named persons; while the trust remains unperformed, the proceeds do not form part of the insured's estate and are not subject to the insured's debts, although premiums paid with intent to defraud creditors may be recovered.

(HK / SG) A court document confirming that an executor or administrator is entitled to deal with an estate. Where a policy has no valid beneficiary designation or nomination, the proceeds fall into the estate, and claimants usually need such a grant before the proceeds can be paid.

(SG) The procedure by which the Singapore court reseals a grant of probate or letters of administration obtained in a Commonwealth country or Hong Kong so that it takes effect in Singapore. The LIA death claims guide sets out this requirement; a grant obtained in a non-Commonwealth country requires a separate application in Singapore.

(SG / Mainland) A single certificate under the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, replacing the traditional chain of consular legalisation. The Convention entered into force for Singapore on 2021-09-16 and for Mainland China on 2023-11-07; whether it is accepted for a claim, and in what form, depends on the insurer's requirements.

(HK to Mainland) A Hong Kong lawyer appointed by the Ministry of Justice, under a scheme in place since 1981, to attest legal acts, facts and documents arising in Hong Kong for use in the Mainland; documents must be reviewed by China Legal Services (Hong Kong) Limited and stamped with its transmittal seal before they can be sent for use in the Mainland.

(HK) The statutory regulator of Hong Kong's insurance industry, which replaced the Office of the Commissioner of Insurance in regulating insurers from 2017-06-26 and later took over the regulation of intermediaries. Guidelines relevant to participating life include GL16 (sales and disclosure), GL34 (participating fund governance) and GL29 (cooling-off period).

(SG) Singapore's central bank and integrated financial regulator, which regulates life insurers and financial advisers. MAS Notice 320 governs the management and disclosure of participating business, and Notice 314 sets out anti-money laundering and customer due diligence requirements for life insurers.

(SG) The industry association for Singapore's life insurance sector, not a government regulator. It sets the cap on the illustrated investment rate of return for SGD participating policies (currently 4.25% / 3.00%, reviewed annually) and publishes consumer guides on participating policies, nominations and death claims.

(HK) Important Facts Statement for Mainland Policyholders. Since 2016-09-01, customers holding a Mainland resident identity card who apply for an individual long term policy in Hong Kong must sign it and cannot opt out; it highlights the risks of buying insurance in Hong Kong and confirms that the sale took place in Hong Kong.

(Established in Singapore / in preparation in Hong Kong) Singapore's PPF, administered by SDIC, protects the guaranteed benefits of individual life policies (including bonuses that have been declared and vested) if an insurer fails, with caps per life assured per insurer; Hong Kong's PPS was still at the stage of drafting legislative amendments as at October 2026 and has not been established.

(HK / SG / Mainland) The Organisation for Economic Co-operation and Development (OECD) standard for the automatic exchange of financial account information for tax purposes. Hong Kong, Singapore and Mainland China have all implemented it, and insurance contracts with a cash value are reportable. The CRS is an information exchange mechanism and does not itself determine tax liability; tax outcomes depend on residence status.

(HK) Hong Kong's monetary system: the HKMA undertakes to keep the HKD exchange rate between a strong-side convertibility undertaking of HK$7.75 and a weak-side undertaking of HK$7.85 per US dollar, forming a convertibility zone after refinements on 2005-05-18. This is the institutional background to the limited exchange rate difference between HKD and USD policies.