Glossary · 50 terms
Life insurance words, in plain language
Policy documents and illustrations are full of words like “sum assured”, “paid-up” and “reversionary bonus”. Here is what each one means for a State Life policy, in a line, with a link to the article that explains it properly.
A
- Alteration
- A change to a policy after it is issued, such as the payment mode or the nominee. Not allowed in the first year, as a rule.Explained in How to pay your State Life premium online, and check your policy.
- Anticipated Endowment
- A plan that pays part of the sum assured during the term, such as Family Pension Plan. It gets no terminal bonus.Explained in State Life terminal bonus explained: who gets it, and how much.
- Assignment
- Transferring the rights under a policy to someone else, such as a lender. It cancels any nomination.Explained in Changing the nominee on your State Life policy: how it works.
B
- Behbood Savings Certificate
- A National Savings scheme for people aged 60 or over, widows and persons with disabilities.Explained in How to start investing in Pakistan: a beginner's plan, step by step.
- Bonus
- Your share of State Life's yearly surplus, added per Rs. 1,000 of sum assured.Explained in What is life insurance? A simple guide for Pakistani families.
C
- Committee (BC)
- A group saving circle where members pay in monthly and take turns receiving the pot. It earns no return.Explained in How to get rich in Pakistan, slowly and for real: 9 rules that work.
- Compounded half-yearly
- Unpaid interest is added to the balance twice a year, and the next period's interest is charged on the larger amount.Explained in Borrowing against your State Life policy: how much, what it costs, how to apply.
- Compounding
- Growth on your growth: each year's return is earned on everything built up so far, not only what you paid in.Explained in How to become a crorepati in Pakistan: the honest maths of your first Rs. 1 crore.
- Crorepati
- Someone with Rs. 1 crore (Rs. 10,000,000) or more.Explained in How to become a crorepati in Pakistan: the honest maths of your first Rs. 1 crore.
D
- Diversification
- Spreading money across different investments so one bad result cannot sink the whole plan.Explained in How to start investing in Pakistan: a beginner's plan, step by step.
- Due date
- The date each premium falls due. The grace period runs for 31 days after it.Explained in How to pay your State Life premium online, and check your policy.
- Duplicate policy
- A replacement policy document State Life issues when the original is lost.Explained in Lost your State Life policy document? What to do, and how to get a duplicate.
E
- Emergency fund
- Three to six months of spending kept somewhere safe and easy to reach.Explained in How much money do you need to retire early in Pakistan? Find your number.
F
- Forfeited
- A policy that has lost all its benefits and cannot be brought back.Explained in Your State Life policy lapsed: how to revive it, and how long you have.
- Free-look period
- The 14 days after a new policy is issued in which you can apply to cancel it. State Life refunds the premium less administrative costs, and medical costs if a medical was done.Explained in What is life insurance? A simple guide for Pakistani families.
G
- Grace period
- The 31 days after a due date in which you can still pay.Explained in What is life insurance? A simple guide for Pakistani families. Also in Your State Life policy lapsed: how to revive it, and how long you have.
- Guardian (of a minor nominee)
- The adult who acts for a nominee under 18. The guardianship ends when the child turns 18.Explained in Changing the nominee on your State Life policy: how it works.
I
- In force
- The policy is live and its premiums are not in default.Explained in State Life surrender value: what you get if you cash in early.
- Indemnity bond
- A signed promise to make good any loss if a payment made without the original document turns out to be wrong.Explained in Lost your State Life policy document? What to do, and how to get a duplicate.
- Inflation
- The yearly rise in prices, which means the same rupees buy less over time.Explained in How to become a crorepati in Pakistan: the honest maths of your first Rs. 1 crore.
K
- KSE-100
- The Pakistan Stock Exchange's main index, tracking 100 large listed companies.Explained in How to start investing in Pakistan: a beginner's plan, step by step.
L
- Lapse
- What a policy does when a due premium goes unpaid beyond its grace period.Explained in Your State Life policy lapsed: how to revive it, and how long you have.
- Lapse and revival
- A policy lapses when premiums stop; State Life lets you revive it within 5 years.Explained in What is life insurance? A simple guide for Pakistani families.
M
- Maturity
- The end of the plan, when a savings plan pays out.Explained in What is life insurance? A simple guide for Pakistani families.
- Mutual fund
- A pool of many investors' money, invested by a professional manager in shares, bonds or deposits.Explained in How to start investing in Pakistan: a beginner's plan, step by step.
N
- Nominee
- The person State Life pays the claim to if the policyholder dies.Explained in Changing the nominee on your State Life policy: how it works. Also in What is life insurance? A simple guide for Pakistani families.
- Non-forfeiture option
- What State Life does automatically with a lapsed policy that still has value.Explained in Your State Life policy lapsed: how to revive it, and how long you have.
P
- Paid-up
- Premiums stop, cover continues at a reduced sum insured, and no further bonuses are earned.Explained in State Life surrender value: what you get if you cash in early.
- Pay yourself first
- Moving your saving out on salary day, before any spending.Explained in How to get rich in Pakistan, slowly and for real: 9 rules that work.
- Policy loan
- Money borrowed against the policy's surrender value, with the policy left in force.Explained in Borrowing against your State Life policy: how much, what it costs, how to apply. Also in State Life surrender value: what you get if you cash in early.
- Policyholder Services (PHS)
- The department at each State Life zone that handles changes, duplicates and other requests on existing policies.Explained in Lost your State Life policy document? What to do, and how to get a duplicate.
- Ponzi scheme
- A fraud that pays earlier investors with money from new ones, and collapses when new money stops.Explained in How to get rich in Pakistan, slowly and for real: 9 rules that work.
R
- Real return
- How much faster your savings grow than prices. 10% growth with 8% inflation is a 2% real return.Explained in How much money do you need to retire early in Pakistan? Find your number.
- Retirement number
- The savings you need for your money to pay your bills instead of a salary: about 25 to 33 times your yearly spending.Explained in How much money do you need to retire early in Pakistan? Find your number.
- Reversionary bonus
- The yearly bonus, declared per Rs. 1,000 of sum assured and added to the policy for good.Explained in State Life terminal bonus explained: who gets it, and how much.
- Revival
- Bringing a lapsed policy back, within five years of the first unpaid premium.Explained in Your State Life policy lapsed: how to revive it, and how long you have.
- Rider
- Optional extra cover, such as accidental death cover, added to a plan.Explained in What is life insurance? A simple guide for Pakistani families.
- Rule of 72
- Divide 72 by the yearly growth rate to see roughly how many years money takes to double: 12% doubles in about 6.Explained in How to become a crorepati in Pakistan: the honest maths of your first Rs. 1 crore.
S
- Savings rate
- The share of your take-home pay you save rather than spend.Explained in How much money do you need to retire early in Pakistan? Find your number.
- Succession certificate
- A court document naming who may receive a deceased person's money, needed when a policy has no nominee, assignee or will.Explained in Changing the nominee on your State Life policy: how it works.
- Sum assured
- The amount you are insured for. Bonuses are added on top of it.Explained in What is life insurance? A simple guide for Pakistani families.
- Surety
- A person who signs the indemnity bond with you and shares that promise. State Life asks for two.Explained in Lost your State Life policy document? What to do, and how to get a duplicate.
- Surrender value
- The cash State Life pays if you end the policy yourself before the term is up.Explained in State Life surrender value: what you get if you cash in early. Also in What is life insurance? A simple guide for Pakistani families.
T
- Term
- The number of years the plan runs.Explained in What is life insurance? A simple guide for Pakistani families.
- Terminal bonus
- A one-off bonus paid with a maturity or death claim, for each year of premiums beyond the 10th.Explained in State Life terminal bonus explained: who gets it, and how much. Also in What is life insurance? A simple guide for Pakistani families.
Z
- Zonal office
- The State Life office that services your policy. Most paperwork, such as loans, alterations and surrenders, is done there.Explained in How to pay your State Life premium online, and check your policy.
Can’t find a word from your own policy?
Send us a photo of the page on WhatsApp and we will explain it, free. Or browse the articles, try the profit calculator, or let the Plan Finder suggest a plan for your goal.