PPLI glossary (67 terms, English and Chinese)

A whole-of-life policy offered privately to eligible clients such as Accredited Investors. The policy value is linked to an investment account set up for that policy alone and held by a custodian bank. The policyholder bears the investment risk, and the account value is not guaranteed.

A whole-of-life policy with flexible premiums and sum assured, whose account value moves with the chosen investments. High-net-worth VUL is structurally close to PPLI; this site distinguishes the two by the weight of protection and by carrier jurisdiction, subject to the product contract.

A universal life policy whose crediting is linked to the performance of a specified equity index, usually with a minimum crediting rate and a cap. The policyholder does not hold the index constituents directly, which differs from PPLI's dedicated investment account.

A life policy in which part of the premium buys units in investment sub-funds and the policy value moves with fund prices. ILPs in Singapore are governed by MAS Notice 307; mechanically, PPLI is a high-net-worth form of investment-linked policy.

A method of sale made only to specified eligible persons without a public offer. In Singapore it is usually tied to statuses such as Accredited Investor and can exempt the offer from some disclosure and authorisation requirements aimed at retail investors; MAS has said financial institutions should still consider Accredited Investors' background and risk tolerance.

An investor category defined in s 4A of the SFA 2001. An individual must have net personal assets above S$2 million, net financial assets above S$1 million, or income of at least S$300,000 in the past 12 months; the primary residence counts for at most S$1 million.

A person who meets the Accredited Investor criteria must expressly consent in writing before a financial institution may treat them as an Accredited Investor. The mechanism has applied since 8 Jan 2019 (MAS FAQs), and the client may later withdraw consent.

An industry term for structures such as PPLI, describing a portfolio "wrapped" in a life insurance contract. The term implies no legal or tax outcome; whether each jurisdiction recognises the policy as life insurance must be assessed case by case.

The person who contracts with the insurer and holds the policy rights; it may be an individual, a trustee or a company. The policyholder exercises rights such as surrender, withdrawal and applying to change the manager, but usually does not own the underlying assets directly.

The person whose death triggers the death benefit. The policyholder and life assured may be different people, but the policyholder must have an insurable interest in the life assured; some products allow several lives assured, with the benefit paid on the death of the last of them.

The person who receives the death benefit. For a Singapore policy held by an individual, beneficiaries can be designated by nomination; where a trust holds the policy, the beneficiary is usually the trustee itself, and the trust documents determine the final distribution.

The bank that opens a dedicated account for the policy's investment account, holds the assets and settles transactions. The custody agreement is usually signed by the insurer, and the policyholder generally cannot give trading instructions directly to the custodian.

A licensed institution that manages the account assets under the investment mandate, usually nominated by the policyholder and appointed after the insurer's review. The manager is responsible for investment decisions, and the insurer does not answer for its investment performance.

The document agreed between the insurer and the asset manager setting out investment objectives, eligible assets, concentration and risk limits. Changes to the mandate require the insurer's acceptance; it is the core document defining the investor-control line.

A form of management in which the client authorises the manager to make investment decisions within agreed limits. PPLI accounts are usually run on a discretionary basis so that the policyholder does not make decisions on specific investments.

A pool of assets and liabilities recorded separately within an insurer or segregated accounts company, apart from other accounts and the general account. Bermuda law provides that claims against one segregated account do not extend to the assets of other accounts.

The insurer's account of assets and liabilities for its own business, which bears the company's general debts. A PPLI investment account is usually managed separately from the general account to reduce the effect of the insurer's own business risks on policy assets.

In Luxembourg unit-linked insurance, an internal fund set up for a single policy (or a small number of policies) and managed by an asset manager under a mandate. According to Luxembourg for Finance, the FID is one of the common investment vehicles for Luxembourg PPLI.

The policyholder transferring policy rights to another person or pledging them to a lender as security. In Singapore, a revocable nomination is revoked by assignment of the policy (LIA, March 2026), so the effect on succession arrangements must be assessed before assigning.

Paying the premium with existing securities or fund units rather than cash. Each asset must be reviewed by the insurer for eligibility and valuation, and the transfer may be treated as a disposal in the policyholder's jurisdiction, so tax advice should be taken beforehand.

The range of assets the insurer's investment mandate allows in the account. Common restrictions relate to liquidity, availability of valuation, rating, concentration and the recognition status of funds; rules differ between insurers and are set by the mandate documents.

A limit on the share of the account held in a single issuer, asset class or fund. It controls risk and also relates to diversification requirements for variable life insurance in some jurisdictions, such as the United States.

The US requirement under 26 CFR §1.817-5 for segregated asset accounts of variable life insurance: no single investment above 55% of total assets, two no more than 70%, three no more than 80% and four no more than 90%; a contract that fails may not be treated as life insurance.

A principle established in US tax rulings: if the policyholder can directly designate or direct specific investments, they may be treated as owner of the underlying assets (Rev. Rul. 2003-91, 77-85). It binds US taxpayers directly, and insurers in other jurisdictions usually adopt similar arrangements.

Funds offered to the public in Singapore must be authorised (if constituted locally) or recognised (if constituted overseas) by MAS. PPLI investment mandates often use such status as one of the eligibility conditions for funds.

A collective investment scheme offered only to relevant persons under s 305(5) of the SFA, or with a minimum subscription of S$200,000 per transaction, which may be exempt from authorisation or recognition and prospectus requirements (MAS).

The proportion of cash or highly liquid assets the policy terms require the account to hold at all times, used to pay charges such as the cost of insurance. If it falls short, the insurer may sell assets or require a top-up; the specific proportion is set by the product terms.

A charge deducted from the premium paid before the balance enters the investment account, usually a percentage of the premium. The rate, and whether it is deducted in instalments, are set by the product summary.

A periodic charge levied by the insurer for maintaining the policy, record-keeping, reporting and compliance, which may be a fixed amount or a percentage of account value. MoneySense notes that such charges may not be guaranteed and can be adjusted.

The charge for the death cover, usually calculated on the life assured's age and the net amount at risk. It rises with age and is generally deducted from the account.

The amount by which the death benefit exceeds the account value, i.e. the risk the insurer actually bears. Because PPLI's additional cover is small, the net amount at risk and the share of cost of insurance are usually lower than in protection-focused life insurance.

A charge levied on surrender or large withdrawals within a set period, commonly declining year by year. The period and rates are set by the product summary; surrender may also involve asset realisation costs and tax consequences.

Taking part of the account value while keeping the policy in force. A withdrawal charge may apply, and the account value and death benefit are reduced; after the withdrawal, the account must still meet the minimum value requirement.

Charges incurred at investment account level, such as custody fees, asset management fees, dealing commissions and fees embedded in funds. They are charged separately from policy-level charges, and both must be added together when comparing total cost.

The minimum payment an insurer requires to accept a PPLI policy, set by each insurer according to its carrier jurisdiction and operating costs, and subject to change. This site does not list specific figures; refer to the insurer's latest product summary.

The amount paid on the death of the life assured, commonly the account value plus additional cover, or the higher of the sum assured and the account value. The policy must be in force and its conditions met, and amounts owed and charges due are deducted.

A form of underwriting under which the policy can be issued, subject to conditions, without full medical examination, usually with only a small additional cover. What is guaranteed is the issue of the policy, not the investment outcome.

Underwriting in which the insurer decides acceptance and rates after a full assessment of the life assured's health, finances and other information. It is used for larger sums assured, takes longer, and may result in loadings, exclusions or decline.

The value of the assets in the investment account at valuation, net of charges; it is the basis for calculating surrender, withdrawals and the death benefit. The account value is not guaranteed and may fall below premiums paid.

A document showing the policy's future value under assumed rates of return. In Singapore, a Policy Illustration for single-premium ILPs applies only to protection-oriented single-premium ILPs whose death and critical illness benefits are at least 150% of the single premium, and must include a 0% scenario; investment-oriented single-premium ILPs (including typical PPLI) do not provide one (LIA). Illustrations do not represent future results.

The period after receiving the policy documents during which the policy can be cancelled. Singapore life insurers generally allow 14 days and refund premiums less expenses already paid, such as medical examinations (MoneySense); investment-linked policies may be refunded at market value.

Termination of the policy, and of cover, when the account value cannot meet charges due and the shortfall is not made good within the grace period. With PPLI, this risk calls for particular attention when assets fall sharply or cash is insufficient.

The lawful economic interest an applicant has in the life of the life assured. Under s 146 of the Insurance Act 1966, life insurance requires an insurable interest, and the presumptions for relationships are as stated in the statute.

Singapore's central bank and integrated financial regulator. It licenses and supervises insurers and issues rules such as Notice 307 (investment-linked policies) and the Guidelines on Fair Dealing.

A protection scheme administered by SDIC, capping guaranteed sums assured at S$500,000 in aggregate and guaranteed surrender values at S$100,000 (per life assured, per insurer); investment-linked benefits tied directly to the net asset value of underlying assets are not covered.

Bermuda's financial regulator, which licenses long-term insurers by class under the Insurance Act 1978. Commercial long-term insurers are divided by total assets into Classes C, D and E (with Classes A / B for captives and ILT / IILT for innovative insurers).

A company registered under Bermuda's Segregated Accounts Companies Act 2000 that can establish multiple segregated accounts that are legally separate from one another. It reduces cross-account risk but does not amount to a government guarantee of policy value.

Luxembourg's insurance regulator. Custody agreements under which insurers deposit their representative assets require the CAA's prior approval, and the CAA is one of the three parties to the "Triangle of Security".

Luxembourg's asset-protection arrangement formed by the insurer, the custodian bank and the CAA: assets representing insurance liabilities must be held in custody separately from the company's own assets. The ACA states that it is not a state guarantee or a capital guarantee.

The ranking in liquidation that Luxembourg law gives policyholders, ahead of other creditors including employees, shareholders, social security bodies and the state. A unit-linked policy is guaranteed a number of units, not a value, and is reduced proportionately if assets are insufficient.

Guidelines issued by MAS (FSG-G04), effective 30 May 2024, applying to all financial institutions and requiring boards and senior management to take responsibility for fair dealing outcomes.

The OECD standard for automatic exchange of financial account information. Singapore has exchanged since September 2018; reporting institutions must register by 31 March and report to IRAS by 31 May each year. The amended CRS applies from 1 Jan 2027.

An insurance contract with a cash value; it is a CRS Financial Account and becomes a Reportable Account where the holder or a controlling person is tax resident in a reportable jurisdiction. CRS does not apply FATCA's US$250,000 review threshold to pre-existing individual Cash Value Insurance Contracts (IRAS e-Tax Guide §4.1.3). Cash value is the greater of the amount available on surrender (before surrender charges and policy loans) and the amount that can be borrowed (IRAS).

Under CRS, an insurer that issues, or is obliged to make payments under, Cash Value Insurance Contracts or annuity contracts, including licensed insurers under the Insurance Act 1966; an insurer selling only term life insurance is not one.

Under CRS, a natural person who exercises control over an entity. For a trust, this generally includes the settlor, trustee, protector, beneficiaries or classes of beneficiary and anyone else exercising effective control; they must be identified where an entity holds the policy.

US law requiring foreign financial institutions to identify and report US accounts. Singapore implements it through a Model 1 Intergovernmental Agreement; the current reciprocal agreement has been in force since 1 Jan 2021, and institutions must report to IRAS by 31 May each year.

The report a US filer must submit when foreign financial accounts together exceed US$10,000 at any point in the year. FinCEN states that financial accounts include insurance policies with a cash value.

A US federal excise tax on premiums paid to foreign insurers; for life insurance premiums the rate is 1 cent per dollar (i.e. 1%), reported on Form 720. Claiming a treaty exemption requires disclosure.

Singapore no longer levies estate duty on persons who die on or after 15 Feb 2008 (IRAS). Other jurisdictions may levy estate or inheritance tax on worldwide or local assets, which must be assessed according to each person's status.

An irrevocable nomination of beneficiaries under Singapore's Insurance Act 1966. It can name only a spouse and/or children, cannot be changed unilaterally, and generally protects the benefit if the policyholder becomes bankrupt; it must be made by a policyholder who is the life assured and aged 18 or above.

A nomination of beneficiaries that a Singapore policyholder can change at any time, and which can name anyone. Assignment of the policy revokes such a nomination; policies held by a trust or company cannot use the nomination regime.

The settlor is the person who puts assets into a trust; the trustee is the person or institution that holds and manages the assets for the beneficiaries under the trust documents. Where a trust holds a PPLI policy, the trustee is the policyholder.

A non-binding guidance document from the settlor to the trustee, explaining how the settlor would like discretion to be exercised and assets distributed. It does not change the legal effect of the trust deed, but trustees often treat it as an important reference.

The maximum period for which a trust or disposition of property may last. Section 32 of Singapore's Civil Law Act 1909 sets it at 100 years or any shorter period specified in the instrument, which affects the design of long-term policy trusts.

An organisation managing the wealth of a single family. As of end-2025, more than 2,000 single family offices in Singapore were receiving tax incentives such as 13O/13U (MAS written parliamentary reply, 5 Aug 2026).

Fund tax incentive schemes under Singapore's Income Tax Act. New applications approved from 1 Aug 2026 are subject to the new conditions in MAS Circular FDD Cir 05/2026; MAS documents do not say whether a policy counts towards AUM in DI.

A Singapore corporate structure designed for collective investment, which can take an umbrella form with multiple sub-funds. As of 31 Dec 2025 there were 1,406 VCCs with 3,443 sub-funds (MAS Asset Management Survey 2025).