When buying insurance, don't be flummoxed by jargon like premium, ‘sum assured’ and term of premium payment. Just make a list of these standard terms, then make a chart and match each term with a figure next to it, according to policy and company. This is good way to compare and choose a policy. Here is the list of terms and what they represent.

Term: The number of years you want to insure yourself for. Remember --the longer the term the lower the premium and it could range from a minimum of 5 years to a maximum 55 years.

Term of premium payment: The number of years you pay premium on your policy. It’s usually is the same as the policy term, but some policies allow you to select a term of premium payment lesser than the policy term.
 
Sum Assured: The minimum amount that your nominee receives in the event of your demise, which could get more than this amount based on the type of policy that you select.

Bonus: This is an amount declared as a proportion of the sum assured, by the insurance company each year. Although declared every year, the bonus is a lump sum payment made to the insured person upon maturity or to his family upon death, in addition to the sum assured.

Maturity (or survival benefit): It is the amount of money you receive from the insurance company if you survive the policy term.
 
Cover (death benefit): This is the amount of money your nominee receives from the insurance company upon your death. This usually covers the sum assured plus the bonus.
 
Returns: The amount of money realised at the end of the term of the policy calculated in percentage terms every year. The interest rate is akin to the annual rate of interest you draw that you receive on the amount that you have invested on any other instrument.

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