Insurance 101

 Learn more about common insurance lingo!

Insurance should come with a translator, right? The sign-up part is easy, but those weird words in the fine print? Yikes. Don’t worry—we’re here to turn that confusing jargon into plain English. Let’s make insurance make sense while protecting yourself and your loved ones! 🔍✨

Insurance lingo got you scratching your head? 🤔
Don't worry—Vitality EntrepreNurse is here to save the day! 🦸‍♀️ In this post, I break down common insurance terms in a fun, easy way so you can finally understand what you’re signing up for. No more guessing games—just smart choices for you and your fam, now and in the future! 💡💪

Account Value. The Value of the policy’s investment fund(s) is derived by multiplying the fund outstanding number of units by the NAVPU at the time of valuation.
 
Administrative Charge. The corresponding monthly fee representing expenses for setting up and maintaining the policy that is taken out of the investment fund(s) through unit cancellations.
 
Cost of Insurance Coverage (COl). The corresponding monthly insurance fee is based on the net amount at risk and the attained age of the insured. The COl is taken out of the investment fund (s) through unit cancellations.
 
Insurance coverage. The value of protection of an in-force insurance policy. This is usually equivalent to the death benefit, which the beneficiaries will receive to sustain their standard of living or to fund other financial needs.
 
Net Amount at Risk. The difference between the policy's guaranteed death benefit and account value at the time of valuation.
 
Net Asset Value per Unit (NAVPU). The value of one unit of a chosen investment fund.

Premium. The amount required to keep the life insurance policy in-force. The net investible amount after charges is allocated to the chosen investment fund(s).
 
Premium Charge. The corresponding fee that is taken from the premium and directed towards the company's miscellaneous expenses in line with the policy you own, i.e., agent commissions, operating expenses, and account opening expenses.
 
Riders. Supplementary benefits are chosen to tailor-fit the policy and avail of a more comprehensive insurance coverage.
 
Top-Up. Excess or additional payment on top of the required premium can be allocated to the chosen investment funds. This can increase the potential returns of the policy and provide additional insurance coverage. Top-ups can either be done regularly or as needed, depending on your policy contract.
 
Top-Up Charge. The up-front charge or processing fee is taken out of top-up payments.
 
Units. The number of shares that the net investible premium can purchase based on the unit price of NAVPU.

 

And that’s just a few you can find in many of AIA Philippines’ insurance plans! Remember, these are just the most common use insurance terms, and as you dive in deeper, you might encounter a lot more difficult ones! Worry not, just fill out the form if you want me to explain them to you, or if you want to know more about insurance! 

If you are interested in this article, please contact me on my social media accounts at https://linktr.ee/vitalitynurse or e-mail me at mariannegrace-g.figueroa@aia.com or vitalitynurse.phenteprenurse@gmail.com

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