11 Best Whole Life Insurance Plans in Singapore [2024 Edition]

#1 Protection Coverage

Naturally, when getting life insurance, the first thing to consider is the type of protection you require.

To alleviate the financial strain that might occur if anything untoward happens to you, it is recommended that you are sufficiently covered for:

• Death
• Terminal Illness (TI)
• Total and Permanent Disability (TPD)
• Early Critical Illness (ECI)
• Critical Illness (CI)

However, it is up to you to decide whether you want an all-encompassing whole life plan that covers everything; or do you already have existing insurance for TPD and/or CI and are just looking for death coverage?

At its most basic, all whole life plans cover you for death and terminal illness.

Most insurers provide coverage for total and permanent disability (TPD) in their basic plans.

Some insurers even offer critical illness protection in your basic plan.

But more often, CI and ECI coverage are available as riders that you can choose to add on if you do not have any existing or want to boost your CI coverage.

If you require more coverage in your later years, some plans allow you to add to your coverage by purchasing a new insurance plan without any medical underwriting at key life stage events.

Subject to certain terms and conditions, of course.

Alternatively, you should consider other types of life insurance, like a term life insurance plan instead.

Term life insurance is usually cheaper and can be used to temporarily bridge any gaps in life insurance coverage.

Ultimately, the right type of life policy varies based on individual, so consider your circumstances and priorities before deciding to ensure you get the right coverage for you and your loved ones.

After all, life insurance is a long-term commitment, and having to change or buy a new plan will incur unnecessary costs.

Total & Permanent Disability Definition

From being unable to carry out any income-generating activity to the permanent loss of specific limbs to an inability to perform a number of Activities of Daily Living (ADL), what constitutes as TPD is different for each insurer.

To further complicate this, insurers also have varying definitions of TPD depending on your age.

If TPD coverage is particularly important to you, then it’s good to do a bit more research and comparison in this area.

Some insurers cover more definitions, while other insurers, not as much. Certain insurers are also more lenient.

For example, HSBC Life’s Life Treasure gives you the option to claim for TPD if you are unable to carry out 2 of the 6 ADLs.

Even if TPD coverage is not your highest priority, it’s good to familiarise yourself with your plan’s definitions so you know what you’re eligible to claim.

#2 Premium Payment Term Options

Most insurers offer you a limited pay option when paying for your whole life plan.

In other words, you will pay off your premium within a selected number of years before your policy term ends.

The premium term options range from 5 to 30 years but differ depending on the insurance company.

Oftentimes the premium terms are often in multiples of 5.

Apart from the limited pay option, some insurers allow you to choose to pay off your premiums by a certain age. However, this option is not as common.

As a rule of thumb, the longer your premium term, the higher your total premiums will be.

There’s no free lunch in this world, so the flip side – that is opting for a shorter premium term – would mean having to fork out slightly more money as compared to a longer premium term.

Although, if you look at everything in totality, the total premiums paid are lower.

You should also consider how often you would like to pay your annual, quarterly, monthly premiums, etc. Similarly, the higher the payment frequency, the higher your total premiums.

While as Singaporeans, we’re all very kiasu and would want to pay the lowest amount, it’s important to choose a premium payment term where you can comfortably pay the premiums due.

If you choose a premium term that is too short, and you’re unable to pay your premiums when they are due, it would cause the automatic premium loan to kick in.

This means that your insurer will draw down from your policy’s cash value (the investment component) to pay off your premiums.

This affects your policy’s cash value and incurs interest that you would need to pay off.

If this occurs, your total cost would most likely be much more than choosing a longer premium term that you can afford.

#3 Expected Rate of Return & Cash Value

If you’re not aware, whole life plans allow you to grow your wealth on top of providing you with protection.

For a quick crash course, they partake in the profit of your insurer’s participating fund to accumulate cash value in the form of guaranteed and non-guaranteed bonuses.

Unlike certain investment instruments, your non-guaranteed bonus is not equal to the rate of return but is heavily linked to it.

Your insurer might declare your non-guaranteed bonus, which will be added to your policy’s guaranteed cash value. But this is usually not immediately accessible until your policy matures or a claim is made.

The following affect the non-guaranteed bonuses you can expect to receive from your policy:

• Smoothing of Bonuses: Where your insurer might declare lower bonuses in years that the par fund performs well and higher bonuses in years where the par fund does not do as well to reduce fluctuation in your non-guaranteed returns.
• Investment Performance: The participating fund’s rate of return
• Insurer’s Expense: Includes claims made to other participating policyholders and your insurer’s expense in managing the par fund

While I am of the opinion that mixing both protection and investment in the same plan is not the wisest use of your hard-earned money, there are instances that a whole life plan is suitable.

Now that you’re well-acquainted, if you’re looking to get a whole life plan, taking a look at the expected cash value that the different insurers can offer is a good call.

Yes, it may be confusing and headache-inducing, but future you will thank yourself for the effort that you’ve put in.

If anything, you can reach out to your financial advisor (or one of our knowledgeable financial advisors if you don’t have an existing one) to help you break down the expected returns and cash value in layman’s terms.

Alternatively, if you want to do your own research before going to a financial advisor, here are the key things to look out for:

Geometric Average of the Par Fund’s Net Investment Returns

Rather than looking at the annual investment performance of the different par funds, the geometric average of their net investment returns will better indicate how the fund is performing.

It considers the effects of compounding within the calculations. Below is a quick breakdown of the geometric average of the investment returns:

Insurer’s Expense Ratio

If your insurer’s par fund boasts high investment returns, but it comes with a high expense ratio, your expected returns would be adversely affected.

Therefore, this factor comes hand in hand with looking at the par fund’s performance. Here’s a quick view of the expense ratios from a few insurers for the last 3 years:

Benefit Illustration

Lastly, once you’ve narrowed your options to a few whole life plans, speak to a financial advisor to look at the plan’s benefit illustration.

This will give you a clearer view of the breakdown between the guaranteed and non-guaranteed cash value your policy will generate.

The guaranteed cash value is what your insurer will definitely pay you if you surrender your policy or make a claim.

You’ll also receive the non-guaranteed bonuses, but this amount may not be the same as what is indicated in the benefit illustration.

It’s important that you don’t take the non-guaranteed numbers provided in your benefit illustration at face value.

With this, you can better gauge whether you’ll be satisfied with your plan’s returns.

#4 Multiplier Feature

As its name suggests, this feature allows you to multiply your plan’s basic coverage by a selected factor up to a certain age.

Available on the whole life plans from all the major insurers in Singapore, this is a good feature to exercise on your policy.

One of the golden rules of insurance is only to get the coverage you require; no more, no less.

When we’re younger, our liabilities are higher – paying off various loans like our housing loan or saving up for our child’s education.

On top of that, we also want to ensure that our loved ones can continue to enjoy their standard of living if we were to face an untimely death.

In such cases, we would definitely need more financial coverage.

However, as we grow older, ideally, our loans get paid off, and our dependents become financially self-reliant.

Say you need $200,000 of coverage in your earlier years, but in your later years, you expect only to require a sum assured of $100,000.

Instead of getting $200,000 worth of coverage throughout your entire policy term, why not buy a plan with a basic sum of $100,000 and add a 2X multiplier up to age 70?

You can also choose to get $50,000 coverage with a 4X multiplier too!

If you get a base coverage with a sum assured of $200,000 throughout the policy, the additional $100K coverage when you’re older is unnecessary, and you have to pay for the added coverage that you don’t require.

The money put into your premiums for the extra coverage can be placed in other investment instruments to work much harder for your retirement.

Before you jump in headfirst into getting any plan with a multiplier, there are 2 factors to consider:

Multiplier Factor

When selecting your multiplier factor, most plans allow you to select between a factor of 1X (no multiplier) to 4X or 5X multiplier.

One way to determine which factor to select is to consider the coverage you require in your later years and work backwards from there.

For example, perhaps you would like to have a coverage of $100,000 mainly for TPD and/or ECI/CI in your later years.

And if you calculate, your current liabilities at this point in time amount to $300,000.

Then, you should get a basic plan with a sum assured of $100K and a 3X multiplier.

Multiplier Expiry Age

Another thing to consider would be when your multiplier will expire.

Expiry ages usually range from 65 to 80 years old. Depending on your selected insurer, you might be able to select from a few options while others only offer you one choice.

Similarly, when selecting your multiplier expiry age, it’s important to consider when your protection needs will reduce.

If you’re unsure, opting for a later expiry age is better.

You don’t want to face a situation where you’re not financially covered when you and your loved ones need it the most. It’s always best to be safe than sorry.

So, if you want to get a multiplier on your whole life plan, select an insurer with a multiplier factor and expiry age that aligns with your needs.

#5 Riders Available

Riders are additional benefits you can add to your whole life plan to provide you with added assurance.

Common riders available include CI, ECI, TPD (if your basic plan doesn’t cover it), premium waiver, and payor benefit riders.

CI/ECI riders cover you in the unfortunate event of a CI/ECI diagnosis.

ECI riders tend to cover various stages of CI. The number of conditions your rider covers can vary greatly based on your insurer of choice.

If getting comprehensive CI coverage matters to you, it’s good to compare the type and number of conditions various CI/ECI riders offer before deciding.

In fact, ECI/CI riders are one of the biggest reasons why a whole life plan would make sense over a term life insurance policy.

ECI/CI riders on term insurance plans usually cover lesser medical conditions, while standalone multiclaim critical illness plans have expensive premiums (though with more medical conditions).

A whole life plan offers a good balance between the number of ECI/CI covered and the premiums you pay.

Premium waiver riders mostly cover TPD or ECI/CICI diagnosis, and as its name implies, waives your premiums if the covered event happens.

Working similarly, payor benefit riders also waive your premiums if anything happens to you, but for 3rd party policies that you buy on behalf of your loved ones.

These are optional but wise add-ons, especially if you think you are at higher risk of ECI/CI.

Learn how to calculate how much ECI coverage you need here, and how much CI protection you need here.

In addition to the standard riders mentioned above, certain insurers might offer other riders, which you can take a look at to determine whether they are relevant to your needs.

Some examples are accidental death and hospitalisation riders.

#6 Accessing your Whole Life Plan’s Cash Value

While not recommended, if you find yourself requiring some cash, some plans give you the option to access your policy’s cash value in the form of a policy loan or a partial withdrawal (aka partial surrender).

If you’re worried about locking your money in your whole life plan, you can choose a plan offering these features.

It should be noted that if you take a policy loan, you’ll be charged interest that must be paid back.

If your interest exceeds your policy’s cash value, your policy will terminate.

Additionally, if you choose to surrender your plan partially, your policy’s death benefit will also be reduced accordingly.

Alternatively, if you do not require your coverage anymore and would like to cash out on your cash value, you can usually surrender your policy after the end of your 3rd policy year.

However, the surrender value will be much lower than your death benefit, and in some cases, your surrender value might be less than the total premiums paid thus far.

If you wish to purchase another life insurance plan after surrendering your policy, you might also face certain exclusions and/or higher premiums.

#7 Affordability

While affordability is definitely one of the factors to consider, I wouldn’t put it at the top of the list, and it would not be the first factor I consider.

I recommend that before even looking at the cost, you should first figure out what coverage you require based on your priorities and circumstances.

This includes the factors above, like types of protection coverage, multipliers, riders, etc.

Once identified, you can narrow down the insurers that check all the boxes and select the most affordable plan.

Of course, to each their own. As everyone’s situation is different, if affordability is the top of your list, then, by all means, put affordability on top.

Again, if affordability is an issue, you can always consider a term life policy.

Bonus: Growing your Retirement Nest Egg

As mentioned previously, as you grow older, your protection needs decrease.

At the same time, you would probably want to live out your dream retirement. But unfortunately, this requires money.

Aware of this, some insurers’ whole life plans have features that allow you to tap into your policy’s cash value to supplement your retirement income.

This will work similarly to a private annuity plan.