AAJI (Indonesian Life Insurance Association)
The official association representing life insurance companies in Indonesia.
Actuarial Science
The discipline that applies mathematical and statistical methods to assess and manage risk in the insurance industry.
(Indonesian term: Aktuaria)
Asset
Any form of wealth, property, or capital with economic value owned by an individual or entity.
(Indonesian term: Aset)
Automatic Premium Loan (APL)
An automatic loan provided by the insurer to pay overdue premiums using the policy’s cash value after the grace period ends.
Beneficiary (Heir)
The person or entity legally entitled to receive insurance benefits when the insured event occurs, such as the death of the insured.
(Indonesian term: Ahli Waris)
Insurance Agreement (Akad)
A written agreement defining rights and obligations between participants and a Sharia insurance company, in accordance with Sharia principles.
Tabarru’ Agreement
A donation-based contract where participants contribute funds to help one another, without commercial intent.
Tijarah Agreement
A commercial contract between participants and the insurance company intended for profit-generating activities.
Wakalah bil Ujrah Agreement
A Tijarah contract in which participants authorize the company to manage Tabarru’ funds in exchange for a management fee (ujrah).
Bancassurance
A distribution channel involving cooperation between banks and insurance companies to market insurance products.
Beneficial Owner
The individual or entity that ultimately owns or benefits from an insurance policy or asset.
Broker
An independent intermediary that assists customers in purchasing insurance policies and handling claims.
Cash Value
The accumulated value within a life insurance policy that may be withdrawn or borrowed against.
(Indonesian term: Nilai Tunai)
Cashless Facility
A healthcare payment method allowing insured persons to receive treatment without upfront cash payment at partner hospitals.
Claim
A formal request submitted by the policyholder to receive insurance benefits in accordance with the policy terms.
(Indonesian term: Klaim)
Clause
Specific provisions or articles contained within an insurance policy.
Limitation Clause
A clause that restricts certain benefits during a defined policy period.
Contestable Period
A specific period during which the insurer has the right to review and possibly void a policy due to misrepresentation.
Cooling-Off Period
A period allowing policyholders to cancel a newly issued policy without penalty.
Coordination of Benefits (COB)
A mechanism where multiple insurers share coverage responsibility to optimize benefits for the insured.
Cost of Insurance (COI)
The charge for insurance protection, calculated based on factors such as age, gender, occupation, and health risk.
Critical Illness Insurance
Insurance coverage that provides benefits upon diagnosis of specified serious illnesses.
Contribution
The amount paid by participants in Sharia insurance to fund Tabarru’ and management fees.
(Indonesian term: Kontribusi)
Double Claim
A reimbursement process where secondary insurance covers expenses not paid by the primary insurer.
Exclusion
Specific risks or conditions that are not covered under an insurance policy.
(Indonesian term: Pengecualian)
Financial Advisor (FA)
A licensed representative authorized to market insurance products on behalf of an insurance company.
Fraud
Intentional acts committed to obtain insurance benefits unlawfully, including falsification of documents.
Free-Look Period
A period allowing policyholders to review policy terms and ensure suitability.
Fund Switching
The transfer of investment units from one fund to another within a unit-linked policy.
Grace Period
An additional time period granted to pay overdue premiums without policy termination.
Group Insurance
Insurance coverage provided to a defined group, such as employees or association members.
Illustration
A projected example showing benefits, premiums, and risks of an insurance product.
Inforce Policy
An active insurance policy with premiums fully paid and coverage effective.
Insurable Interest
A legal and financial relationship between the policyholder and the insured that justifies insurance coverage.
Investment Fund
A pooled investment vehicle used to generate returns for policyholders.
Insurance Benefit
The amount or assistance provided by the insurer upon a valid claim.
Lapse
The termination of an insurance policy due to non-payment of premiums beyond the grace period.
Level Premium
A premium structure where the amount remains constant throughout the payment period
Net Asset Value (NAV)
The market value of investment assets minus liabilities and expenses.
No-Lapse Guarantee
A guarantee ensuring a policy remains active provided premiums are paid as agreed
Occupational Risk
The level of risk associated with the policyholder’s occupation.
OJK (Financial Services Authority of Indonesia)
The Indonesian regulatory authority overseeing financial institutions, including insurance companies.
PAYDI (Investment-Linked Insurance Product)
A life insurance product combining protection and investment benefits.
Policyholder
The individual or entity that owns an insurance policy.
Policy Reinstatement
The process of restoring a lapsed policy to active status.
Policy Term
The duration of time during which insurance coverage remains effective.
Premium
The amount paid by the insured to maintain insurance coverage.
Pre-Existing Condition
A medical condition that existed before the insurance policy was issued.
Rider
An additional benefit or coverage attached to a basic insurance policy.
Risk-Based Capital (RBC)
A financial solvency measurement used to assess the financial health of an insurance company
Sum Assured
The maximum amount payable by the insurer upon occurrence of the insured event.
Surrender
The termination of an insurance policy before maturity, with payment of surrender value if applicable.
Top-Up Premium
An additional premium payment made to increase investment value or coverage.
Total Cash Value
The accumulated cash value available within an insurance policy
Total Nilai Tunai: Akumulasi dari Nilai Tunai.
Underwriter
A professional responsible for assessing risk and determining policy acceptance and pricing.
Underwriting
The risk evaluation process used to decide coverage eligibility and premium rates.
Unit-Linked Insurance
A life insurance product that combines protection with investment components.
Unit Price (Net Asset Value per Unit)
The value of each investment unit within a unit-linked insurance fund.
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