Best Life Insurance Plans Singapore
At MoneySmart, learn about the basics of life insurance and compare the different types of life insurance plans in Singapore to make a better-informed decision for you and your family.
Why do I need Life Insurance?
Whether you are buying a term or whole life insurance, the purpose of life insurance is to protect you and your family's financial stability in the event you are diagnosed with total permanent disability, terminal illness, or even when you pass on.
Financial Stability
Sum Assured
Is Whole Life Insurance a good investment?
What are the pros and cons of whole life insurance plans? Whole vs term life insurance is one of those never-ending arguments – you're either a whole life insurance type of person, or you're a term insurance person. Universal life insurance? Forget it, those people won't be reading this page. Below, we list out the advantages and disadvantages of a whole life insurance plan:
Pros
Life Expectancy
In Singapore, the average Singaporean lives up to 82.9 years old (as of 2017). However, most term insurance plans only cover you up to 75 years old. That means, if you live past age 75 (aka outlive your plan), your term insurance plan will automatically end, and you will not get any money back. You can see your premiums as wasted, or thank your premiums for having offered you coverage up till an old ripe age of 75.
Cash returns
While term insurance does not guarantee any cash returns if you outlive your policy, an endowment whole life insurance accumulates cash value over the years and may even offer you a guaranteed (confirm you will get back) and non-guaranteed sum of cash if you outlive your policy (some whole life policies end at age 99 or 100). If you are interested to learn more about endowment plans, you could read our short guide on the basics of endowment plans.
Investment-linked
Some people are drawn to the fact that some whole-life policies can be linked to investment funds – meaning the monthly S$300 or S$400 premiums that you pay will be pumped into your choice of investments. However, you don't get guaranteed cash returns with such plans since your money will be subject to the economy and market forces – yes, you could lose your money.
Cons
Money
Whole life insurance plans' premiums generally cost 10 to 12 times more than term life insurance plans' premiums since they effectively cover you for a longer period of time (up to age 99, 100, or death depending on your policy). If you are in the late 20s, your annual whole life premiums start from around S$4,000 per year for just S$250,000 sum assured (your death payout).
Necessity
Some individuals believe that your children or dependants don't necessarily depend on you their entire lives. At some point, your children will be financially independent and they will no longer need your whole life insurance payout to survive when you pass on. Therefore, these people believe that it's not worth forking out so much from your retirement funds (S$10,000 upwards annually in your 50s and 60s) for a whole life insurance if your children are financially independent.
Lose Money
If you purchased a whole life investment-linked policy (ILPs), and you and your insurance agent or advisor are both not familiar with the funds, you may quite easily lose your money paid in premiums (and a lot of people have so). Also, whole life ILPs are meant for the long-haul and if you need immediate cashflow (new house for new baby on the way etc.), then it might result in losses when you surrender your plan early.
Which Insurance Plan Is Right For You? Hear From Our MDRT-Qualified Specialists.
From health insurance to life and term insurance, getting your insurance portfolio in order is probably one of the best things you can do for your finances, especially while you're still young.
To help you make sense of this, MoneySmart Financial's MDRT-certified team of experts is here to give you a hand, with insightful tips on choosing between the different insurance plans, access to comprehensive research, price comparisons, eligibility, or documentation, and ultimately enjoying a seamless insurance selection and application journey.
Did you know the Million Dollar Round Table founded in 1927 serves as an international association uniting various financial professionals, including life insurance agents, financial advisors, and wealth managers? The MDRT recognition is regarded as a mark of distinction, with specific benchmarks for excellence.
To help you make sense of this, MoneySmart Financial's MDRT-certified team of experts is here to give you a hand, with insightful tips on choosing between the different insurance plans, access to comprehensive research, price comparisons, eligibility, or documentation, and ultimately enjoying a seamless insurance selection and application journey.
Did you know the Million Dollar Round Table founded in 1927 serves as an international association uniting various financial professionals, including life insurance agents, financial advisors, and wealth managers? The MDRT recognition is regarded as a mark of distinction, with specific benchmarks for excellence.
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Best Life Insurance Singapore
AIA Guaranteed Protect Plus II is a whole life insurance plan offering you coverage for death, total and permanent disability (up to age 70), and critical illness (optional, up to age 100). You may choose to add a 2X, 3X, or 5X multiplier (up to age 65 or 75) to increase your lump-sum payout while your dependants may still be financially reliant on you. You may also enjoy non-guaranteed bonuses depending on the performance of the funds your premiums have been invested in.
AXA Life Treasure II is a whole life insurance plan offering you coverage for death, terminal illness, and total permanent disability up to 99 years old. Option to multiply your coverage by 2, 3, 4 or 5 times the basic sum assured with a multiplier coverage term until age 65, 70 or 80. Wide range of riders to customise the whole life plan to meet your medical and lifestyle needs,
China Taiping I-Secure Legacy is a whole life insurance plan offering you coverage for terminal illness, total permanent disability, and death. Option for you to add the “Guaranteed Benefit” multiplier to increase your sum assured by 2, 3, or 4 times until age 76 or 86. Thereafter, the GB will decrease by 10% each policy year for five policy years and will remain at 50% from age 80 or 90 respectively. Premium waiver riders to cover your China Taiping I-Secure Legacy premiums in the event you or your spouse gets diagnosed with terminal illness, total permanent disability, or have passed on
Manulife LifeReady Plus II is a whole life insurance offering you coverage for death, terminal illness, and total permanent disability - Option to enhance your protection up to 5X, till age 70 or 80. If you are healthy (by Manulife’s standards), you get to enjoy the Health Advantage Benefit’s premium discounts for your first 2 years with the plan, and thereafter if you continue to meet Manulife’s health targets.
Income Star Secure is a whole life insurance offering coverage for COVID-19, death, accidental death, total permanent disability, and terminal illness. In the event of accidental death, your family will receive up to 200% (or 2X) your sum assured, and your death benefit payout. If you have been retrenched and haven’t been able to find another job for 3 months straight, you will not be required to pay premiums for up to 6 months
What types of Life Insurance are there?
What Are The 3 Types Of Life Insurance?
Whole Life Insurance
Benefit
Offers you a lump-sum payout in the event of disability, terminal illness, critical illness (depends on your choice of plan), and death, with possible cash returns – for your entire life.
Who is it for?
Young adults, professionals, and homeowners
Term Life Insurance
Benefit
Offers you and your family a lump-sum payout in case you are disabled, terminally ill, critically ill (optional), or in the event of your death – up to a certain age only, e.g. 75 years old.
Who is it for?
Fresh graduates, first-time insurance buyers, and first-jobbers
Universal Life Insurance
Benefit
Often offered to high net-worth individuals, a Universal Life insurance plan offers you the usual whole life death benefits – although with the flexibility to change your sum assured and premiums anytime, and the premiums you pay can be investment-linked.
Who is it for?
High and ultra-high net-worth individuals considering legacy planning
Term vs Life Insurance
So, you've heard of people buying term life insurance, and others buying whole life plans (commonly referred to as life insurance in short) – but what are the similarities and differences between term and whole life insurance?
Term Life Insurance
Whole Life Insurance
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When should I get Life Insurance?
A general rule of thumb is this – the younger you are, the lower and cheaper your premiums will be since you will likely have lesser health issues. So, if you are in your 20s, you might want to start thinking and shopping for insurance. Life insurance may not the most romantic date-night topic to think and talk about, but you will need to bring this up at some point in your adulting and BTO aka family planning journey.
Who Is Whole Life Insurance Suitable For?
If you're reading this, you must be considering purchasing a life insurance policy. However, you may still be wondering if you should buy whole life insurance or term insurance. To make things a little easier, here are the profiles of people who usually end up buying whole life insurance. Remember, there's really no right or wrong – everyone's lives, needs, priorities, and circumstances are different.
If you are someone whose priority is, and prefers to have the assurance that your life insurance policy will definitely cover you until your last breath, then you are most likely going to end up with a whole life insurance. However, whole life insurance plans don't come cheap – they can range from S$4,000 to $13,000 in insurance premiums per year. So, some young adults may first purchase a cheaper term insurance to have some sort of coverage before opting for a whole life plan when their income increases.
Most commonly, parents with newborns or young children may purchase for whole life insurance plans for their little ones. Why? For several reasons, such as the assurance that your child will be covered for life even when you have finished paying premiums and have passed on, for a financial head-start in your child's working years and life since they are already insured and do not have to spend on insurance, and for the cash value that accumulates over the years that your child may be able to retrieve if they need it for education or the first home.
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How do I apply for a Whole Life Insurance Plan?
Applying for a Life Insurance Plan through MoneySmart
Step 1
Answer Some Questions
If you find downloading insurance policy brochures and comparing them side by side a hassle, our intelligent system can do the comparison for you. Answer some questions online and we'll have you going.
Step 2
Speak To Our Insurance Specialists
After you submit your quiz, our expert insurance specialist team members may drop you a call to clarify your needs and explain your options to you. Seize this chance to ask our friendly colleagues the burning questions you may have about health insurance!
Step 3
Apply And Purchase Your Life Insurance
Once you have spoken to our insurance specialists, considered your options, and planned your finances, you are ready to apply for your life insurance plan online through our portal.
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We Work with All Major Insurance Providers
Life Insurance Beginner Guides
Here are 3 beginner guides that you can read and bookmark for easy reference:
Life Insurance in Singapore — The Basics of Whole Life and Term Insurance
Term Life vs Whole Life Insurance in Singapore — Which Is Better for You?
Whole Life Insurance Pros & Cons: Is It Ever A Good Idea?
Frequently Asked Questions
What is life insurance?
- Life insurance serves to protect your family's financial health and status. To understand how life insurance works, you must first understand the intention and purpose behind life insurance plans. Everyone who has bought life insurance has asked themselves this same question: "When I die, how will my elderly parents, spouse, or children pay for my funeral bills, medical expenses, home loans and bills, school fees, and sustain their daily lives? If I'm no longer around to provide for them, how much money will they need?" Since it involves the survival and lives of immediate family members, people do take their life insurance plans very seriously. That also explains why there is so much talk about life insurance plans. Now that you understand the intention behind life insurance, you will also understand that the many types of life insurance plans you see out there (most commonly whole and term) addresses different family needs for people of all walks of lives – some people have extremely high sum assured like S$500,000 for their children and spouse's survival, while some only sign up for S$100,000 to foot their funeral bills (but they multiply their coverage by 5X to get a total of S$500,000 until age 70 to support their children while they are still studying). At the end of the day, the sum assured (the lump-sum payout) that you get via life insurance should sufficiently cover your family's essential expenses.
Can life insurance be transferred to another company?
- No, you cannot transfer your life insurance plan from your current insurance company to another. Why? The answer is quite simple – the life insurance policy contract that you signed when you applied for this life insurance plan is a contract. In fact, all insurance plans are contracts which legally brings you into a relationship with your insurance company. You've heard this before from your insurance agent – your insurance company has to honour the promises laid out in the policy contract. Likewise, you have to honour your promises as per the contract as well. Still not too sure what that means? Okay here's an easy one – you can't buy a MacDonald's Big Mac Extra Value Meal and bring it into a KFC outlet to dine-in. They are rival companies with different products, and obviously you can't expect them to welcome each others' products.
Does life insurance pay if you die of cancer?
- Yes. If you die of a natural cause such as cancer, your life insurance will cover you and offer your family the lump-sum payout you have been assured for. However, that's given that you have been honest and regularly updating your insurance agent and company of your medical conditions, such as the diagnosis of cancer, and any related pre-existing conditions etc. Also, you will only be eligible for your payout if your death was purely caused by cancer and you didn't participate in any high-risk, dangerous activities such as bungee jumping, scuba diving etc. that may have resulted in your death. If you have been diagnosed with a terminal cancer (given less than 12 months to live)< check your life insurance policy to see if terminal illness is included in the default list of benefits. If it is, you may be able to get your full payout.
How does age affect life insurance?
- Your age primarily affects your life insurance premiums – as you grow older, your annual insurance premiums will increase as well. Why? That's because as you age, you are at higher risk of illnesses, medical conditions, and death. Also, there's the issue of pre-existing conditions. As compared to someone in his 40s, someone in his early 20s applying for a life insurance plan will most likely have lesser medical history and past illnesses logged in his medical records as well – therefore lesser pre-existing conditions and lower medical risk involved.
How is life insurance profitable?
- On an individual level, do note that life insurance should not be seen as an investment product if you are considering buying life insurance as a way to grow your wealth. Instead, there are better avenues for financial investment. For insurance agents and financial advisors, the life insurance plans you purchase continually pays them a percentage in commission monthly or annually as long as your policy is still in force (aka you are still paying insurance premiums for it). Finally, for insurance companies, how do they profit from life insurance plans? Insurance companies profit when they receive more money paid by consumers like us in premiums as compared to the claims they've had to pay out in the same year. They also profit when the stock market performs well, and likewise the investments they've made with our premiums are performing equally well.
Should I buy life insurance for my child?
- Buying life insurance for a newborn, toddler, or child can be a pretty divisive topic. There are 2 schools of thought in Singapore – for and against – and your stance will largely depend on your beliefs, financial status, and the long-term plans you have for your child. People who believe that do not need to buy life insurance for your children often reason that: one, you child is not financially active and does not have dependents; two, at such a young age your child is unlikely to pass on or be diagnosed with critical or terminal illnesses; three, child life insurance is a marketing gimmick and there are better investment products for you to save up money to gift your child when you pass on. On the other hand, parents who are supportive of purchasing life insurance for their children often cite: one, you should never skimp and save on your child's insurance coverage as you never know if when he/ she may be diagnosed with a critical or terminal illness; two, a payout from your child's policy will enable you to pursue medical treatments and even allow you to stop work to give him/ her full-time attention and care; three, if your child were diagnosed with a long-term illness at a young age, this will affect his/ her eligibility when applying for future insurance plans in adulthood.
Should I get term or whole life insurance?
- Not too sure if you should get term or whole life insurance? It largely depends on your personal beliefs, priorities, and financial status. If you strongly believe in having insurance coverage till the end of your life, then you should look into getting a whole life plan. However, if you don't prioritise a lifelong insurance plan and are comfortable with a shorter plan covering you up to 75 years old, you can consider a term insurance. Do note that whole life plans are generally more costly than term insurance plans – on average, the annual insurance premiums of a whole life insurance plan is 10 times more than that of a term life plan's.