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Life Insurance in Singapore: Is Whole Life or Term Life Protection Better for You?

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This article was originally published on FWD Insurance Singapore

In life, everyone goes through various rites of passage: your first job, getting a driver’s license, voting, getting married, and buying a home for the first time. Then there’s getting your first insurance policy — an intimidating step that involves comparing an overwhelming number of plans and insurance types. To simplify things, we examine the differences between two key insurance types: term, and whole life.

What is life insurance?

Simply put, a life insurance policy secures your family’s financial future against unforeseen events. These could include critical illness, death, or circumstances leading to permanent disability.

Whole life vs. Term life protection

The following table shows the key differences at a glance.

Insurance Type Term Life Whole Life
Cost Both can be flexible to suit your needs and budget. You’ll need to make fixed payments for a period of time.
Returns No cash value but offers financial protection when you need it. Guaranteed and non-guaranteed cash value that can serve multiple purposes.
Benefit Payout of sum insured upon death or disability to financially help support your loved ones.
Coverage Period Fixed period* of time or renewable** until 100 years of age. Whole life coverage up to 100 years of age or until death, depending on the plan.

*FWD Fixed Term Life insurance: Premium always stays the same until the end of the policy for a specific period. e.g. 5 years, 10 years, 20 years.
**FWD Renewable Term Life insurance: Starts with a low premium and increases with age. Flexibility to renew until age 100.

Which insurance type is right for me?

That depends on your age, income and protection needs.

Let’s paint the scenario of a 23-year-old female named Ashley — a young working adult who is looking for her first life insurance policy. As she has no dependents and few financial commitments, she can set aside funds for a whole life plan that can provide her with both protection and savings in the future, when she will eventually have the need for it. As she is in her early 20s, it is likely her insurance premium will be lower because of her age. As her whole life premium is fixed, her plan can eventually become more affordable to her as her income increases.

In an alternative scenario, Ryan is a 40-year-old sole breadwinner of his family, with a son who just started studying in a university — in addition to other financial obligations, such as repaying his housing and renovation loans. Ryan wants his family to have their protection needs covered, especially education for his son’s future. In this crucial time, Ryan uses an online insurance calculator, to compare whole life and term insurance. Ryan decides that a fixed term life insurance plan offers him a cost-efficient blanket of protection for his loved ones while balancing his family’s living expenses during this critical period of about 5 years.

In the case of FWD Term Life Plus insurance, Ryan has the option of buying a fixed term life insurance which offers protection for a fixed period of time, or renewable term coverage that would give Ryan the option of extending his term life insurance at any point. For less than S$1 per day, he can have a sum insured of S$500,000 to secure his family in the next 5 years.

Consider your financial objectives

Ashley and Ryan both have different needs and budgets, your needs might also be different – choosing the right insurance can be aided by tools such as CPF’s insurance calculator.

FWD’s Term Life insurance lets you choose a sum insured for your protection needs of up to S$3 million. You can also opt to buy up to S$1.5 million of coverage without the need for a medical check-up if you are in the pink of health. Find out how much your sum insured cover is by getting a Term Life Plus insurance quote online, in a matter of seconds, it’s that easy.

Limited offer: Enter promo code INTLP50 for 50% discount on your first-year premium! (Promotion valid till 10 September 2021)

Get a quote here and secure your family’s future.

This is for general information only and does not constitute financial advice.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). This advertisement has not been reviewed by the Monetary Authority of Singapore.

Buying a life insurance policy is a long-term commitment. You should consider if this policy is suitable for your needs, or you may wish to seek advice from a qualified financial adviser before making a commitment to purchase this policy. Switching from an existing policy to a new one may have potential disadvantages.

Posted in Life & Health