Premiums can be are payable for a limited period of time or for whole life
What is Whole Life Insurance?
Whole Life Insurance, as the term suggests, will cover the insured for the whole of life (usually till age 99 or till age 100) for Death and Terminal Illness. The plan can also be customized with optional riders such as early critical illness rider, critical illness rider and Total and Permanent Disability Rider to enhance the policy coverage.
Whole life insurance in Singapore offers flexibility in premium payment by offering premium terms of 5/10/15/20/25/30 years or till age 99.
Premiums of a participating whole life insurance plans will be pooled together and invested with premiums from other policyholders into the insurer’s Participating Fund. The whole life insurance policy in Singapore participates in the performance of the Participating Fund in the form of bonus and dividend. Bonus and dividends are non-guaranteed and may vary according to the performance of the Participating Fund. That said, insurers will smooth bonuses to ensure stable medium to long term returns.
A salient feature of the best whole life insurance in Singapore is that it also accumulates cash value over the years and will have surrender value that comprises of guaranteed cash value and non-guaranteed bonuses. The policyholder will receive a separate payout if he/she chooses to surrender the plan in full or partially.
Why Whole Life Insurance Policy in Singapore?
The whole life insurance policy in Singapore has gone through several revamps since the first traditional whole life insurance launched. Traditionally, the first whole life insurance covers only 30 advanced critical illnesses, and will pay based on the sum assured and bonus upon eligible claims. Since then, the current whole life insurance in Singapore has evolved to include features such as multipliers of sum assured, limited premium payment option, and early critical illness coverage. As such, whole life insurance has since been a popular insurance instrument to protect one’s asset.
As whole life insurance in Singapore provides lifetime coverage, it can be used as a form of legacy planning as your family will almost certainly receive the payout. It also removes the need to consider when you wish to have your coverage to end (unlike the case for Term insurance).
With the flexibility in premium term choices, you can select accordingly based on your lifestyle and financial ability. In addition, you do not have to worry about paying for policy premiums beyond your retirement years.
As the whole life insurance policy in Singapore provides cash value, it gives the policyholder the option and flexibility to either partial/full surrender and receive a cash payout or to maintain their protection coverage during the golden years.
Whole life insurance and term life insurance are two different types of policies. Whole life insurance lasts for an insured's lifetime, as opposed to term life insurance, which covers for a specific number of years. Additionally, individuals who prefer to pay their premiums for a limited period of time should consider a Whole life insurance.
If you are looking for a high sum assured coverage (such as to cover for mortgage loan), a term life insurance will be more suitable as their premium is more affordable. . However, as term insurance does not offer any cash value, there will not be any surrender value if you terminate the term insurance during the policy term.
If you are looking to cover for your whole life, and to provide a legacy, the best whole life insurance in Singapore may be more suitable as you do not have to worry about paying for premiums throughout your lifetime. In addition, whole life insurance also provides cash value that builds up over time.
In conclusion, there is no one size fits all solution when it comes to selecting term or whole life insurance as both serve different purposes in variable situations.
Let Us Help You Find the Best Whole Life Insurance in Singapore
At the end of the day, an insurance policy is to provide a peace of mind for you and your family. As Jack Ma said, ‘Buying insurance cannot change your life, but it can prevent your lifestyle from being changed.’
Choosing the best Whole Life Insurance in Singapore will involve plenty of work to do as there are options aplenty to choose from. Our licensed financial advisor will help to review your life insurance needs, compare and recommend the best whole life insurance to suit your situation.
If you are keen to find out more, we compare the key features of each insurer’s whole life insurance plans.