Whole Life Insurance Policy
In Singapore where major financial commitment is shared by both the husband and wife, a payout in a time of crisis makes a huge financial impact to your family
As the life assured in a Whole life insurance policy, you and your family are financially protected when an unfortunate life event occurs.
Read about: How much insurance coverage do you need? *NEW*
Why choose a Whole Life insurance policy?
Whole Life insurance can provide one of the highest coverage when an insurable event such as Death, Disability, Early Critical illness, Critical illness and Terminal illness occurs. The policy accumulates cash value and can also be surrendered for cash, in the later stage of the policy owner life.
Whole Life insurance are not without its own advantages and disadvantages.
The advantages of a whole life policy
Whole life policy ensures that the premium stays the same throughout the payment period, eliminating the risk of a premium hike. Unlike a Term Insurance, premium does not increase as the policyholder gets older.
Whole Life insurance policy also accumulates cash value, which can be surrender for cash during retirement or when the need for coverage decreases.
Related article: Term life vs Whole life (Financial cost and benefits analysis)
The disadvantages of a whole life policy
Whole life product may not be suitable for short or mid-term financial goals as the cash value built up over a longer period of time. If the only purpose of the policy is to accumulate returns, regular investment plans or endowment policies may be more suitable.
Surrendering the whole life policy also terminates all intended coverage provided by the plan itself.
Read about: 3 Best Whole Life Insurance Policies in Singapore for Insurance Coverage (2023 Edition)
Key features of Whole Life insurance policy
A whole life plan provides coverage for the entire life making it one of the best products for protection and saving. Part of the premium paid goes into investment by the insurer, ensuring cash value builds up over time.
The policy may also have riders to multiply the protection coverage offered. Some of the key terms you should understand when taking up a Whole Life insurance policy:
- Coverage Period: Up to age 99 or entire life.
- Riders: Rider may be applicable or added to provide coverage or waive premium payment when an insurable event occurs.
- Premium: The amount of payment required for the Whole Life policy. Premium stays the same throughout the payment premium.
- Premium Term: The number of years you have to pay the premium for the Whole Life policy.
- Cash Value: Consist of a cash value generated through investment returns by the insurer. Cash value varies among the investment performance of individual insurer.
- Guaranteed Cash Value: The minimum lump sum value u should receive, in the event that you choose to surrender your policy.
- Non-Guaranteed Cash Value: Additional lump sum you may receive, depending on the investment performance of the insurance company.
- Surrender Value: The cash value consisting of a guaranteed and non-guaranteed cash value. Surrendering your policy means any provided health and insurance coverage will stop.
- Death Benefit: The amount paid upon Death, usually based is on the higher of the coverage amount or accumulated cash value.
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 review
- NTUC Income: VivoCare100 review
- 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)
What else should you consider?
Depending on the premium term, the break-even point for a Whole Life insurance is usually no less than 15 to 18 years. Unlike endowment policies or investment plans, there is usually no option to partially withdraw cash without financial penalties. Ensure that affordability and suitable coverage should be just as important as the future surrender value.
Your financial advisor should work out your coverage shortfall and discuss a proposal based on your financial budget, goals and objectives.
What is the best whole life plan for you?
Before committing to a whole life insurance policy, it certainly pays to make an effort to compare. Specific products features, benefits and payout will differ more than you think across insurance companies.
Why regret only years later, when you find out that you are not getting the best insurance policy available for the premium paid?
Even worse, to know you can compare whole life insurance plans here, 100% free of charges on the InterestGuru.sg platform.
Where can I compare the payout and benefits of Whole Life insurance plans?
Use our Whole Life comparison system to get instant quotes on the most competitive plans available.
Considering a Whole Life Insurance Policy or related insurance products?
Drop us a message if you need more advice or a free consultation from an independent financial advisor.