What is a Whole Life Insurance Policy?
Whole Life Insurance provides coverage for life with add-on riders to cover for early critical illness, critical illness and other insurable events. Some policies allow cash accumulation with options for conversion into an annuity with regular payout upon the insured attaining a certain age. Premiums can be paid for a specific number of years or until age 65 depending on the level of health and protection coverage needed and financial objectives of taking up the policy.
Read about: Whole Life Policy: How does it work?
Read about: 3 Best Whole Life Insurance Policies in Singapore for Insurance Coverage (2023 Edition)
Why choose a Whole Life Insurance Policy?
Whole life insurance is typically participating insurance policy, having its cash and surrender values expressed in terms of guaranteed and non-guaranteed returns. The policy shares in the investment returns of the insurer in the form of bonuses, which are declared yearly and becomes part of the guaranteed death benefit and cash value.
A Whole Life policy also accumulates cash value which builds up over time can be significant when compounded in the long run. This forms part of the individual retirement funds when the policy matures or surrendered.
Read about: Effect of compounding returns on your savings
Read about: How much insurance coverage do you need? *NEW*
For those seeking potentially higher returns at the cost of not having any guaranteed cash value, Investment Linked Policy allows the policyholder to select where the premium gets invested into by choosing among the insurer sub-funds. Alternatively, those with a lump sum of funds may choose a non-participating whole life insurance such as Universal Life Policy which offers a minimum yearly credit rate.
Read also: Investment Linked Policy: How does it Work?
What benefits does a Whole Life Insurance Policy offer?
Among the range of insurance policies, whole life policy tends to have one of the widest range of optional riders to meet the health and protection needs of the insured. Typical riders options for coverage includes:
- Early Critical Illness
- Critical Illness
- Multiple Claims Critical Illness
- Disability income benefit
Some riders offer up to ten times the sum assured for an insurable event or allow future premiums to be waived should the said insurable event occurs. Should even higher coverage be required, accelerated riders pays out a lump sum while policy continues with no impact on cash and surrender value.
Does a Whole Life Insurance Policy suit my needs?
As the name suggests, taking a whole life policy is a long-term commitment and early surrender will lead to significant losses. At InterestGuru, we feel that minimally a Whole Life Policy with decent coverage should be part of a healthy Insurance Portfolio.
Do always ensure that taking up additional Whole Life Policy should fulfil some or all of an insurance need/gap in your health and protection coverage or bring you closer to your financial goals. Specific financial goals such as wealth accumulation may also be addressed by other insurance policies such as a Retirement Annuity policy or investment product such as Unit Trust Funds.
Read about: Investing Guide: Reasons to invest in Unit Trust
What are the Whole Life policies available?
Without preferences and in no order of ranking, here are some of the popular Whole Life insurance policies available in Singapore:
Tokio Marine: TM Legacy LifeFlex
NTUC Income: VivoLife
Aviva: MyWholeLifePlan II
Prudential: PruLife
Manulife: LifeReady
AIA: AIA Guaranteed Protect Plus
*NEW* Check out the updated list of the 8 Best Whole Life Plans in Singapore based on Product Features (2023 Edition)
Get only the best whole life insurance plans
Wish to know more about how the above Whole Life insurance policies fit into your financial and insurance portfolio? Like to know the actual financial returns on the above products based on your age, budget and financial profile?
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We compare whole life quotations on all leading insurers in Singapore
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