Buying your first insurance plan is one of those “adulting” moments we all go through. It can also be a very daunting process. With so many options available it can be hard to decide what's best for you.

“Should I go for something that's more affordable in the short term? Or, should I invest in a plan that offers lifelong protection?” These were some of the questions I had when purchasing a life insurance plan. Here, I’ll share a comparison between the two most popular options, whole life and term life insurance, so you can make an informed decision too.

What is Whole Life Insurance?

As the name suggests, whole life insurance provides a financial safety net that covers you for your whole life. It’s a policy that not only provides a payout to your loved ones when you die, but it also builds cash value over time. Think of it as a combo of protection and savings rolled into one. You pay your premiums regularly during the premium term, and in return, you get peace of mind knowing that your family is taken care of no matter what. You can even get some cash back down the road by withdrawing the cash value of the policy since the plan accumulates cash value over time.

Certain whole life plans also offer optional riders that provide additional coverage for total and permanent disability as well as critical illness.

What is Term Life Insurance?

Term life insurance generally provides straightforward coverage for a set period, for instance 10, 20 or 30 years. It’s simple: you pay regular premiums throughout the coverage term, and if you die during that time, your family gets a lump-sum payout. Unlike whole life insurance, it doesn’t build cash value – it’s purely for protection. You can cover all bases with optional riders for total and permanent disability, critical illness and more.

It’s a good option if you’re looking to keep costs low while ensuring your loved ones are financially secure during key periods in life, like while paying off your HDB mortgage or raising kids. A term life plan is perfect for those of us in our 30s who want higher coverage without having to pay expensive premiums.

How to pick between Whole Life and Term Life insurance?

Picking between these two life insurance plans comes down to three factors: cost, duration of coverage and what you want to achieve with your policy.

While whole life insurance is more expensive, it provides lifetime coverage and accumulates cash value. Think of it as a long-term investment that can be part of your financial planning, even acting as a savings tool for your retirement needs.

In contrast, term life insurance is more affordable as compared to whole life insurance for the same amount of coverage and covers you for a specific period. It’s a budget-friendly option that offers essential and higher coverage  for those of you just starting out on your adulting journey.  

What if your Term Life insurance plan could give you more?

Typical term life insurance plans like Singlife Elite Term II (Regular Pay) are affordable and require you to pay premiums throughout the coverage term while you enjoying the coverage.

However, a term life insurance plan with a limited pay option like Singlife Elite Term II (Limited Pay) allows you to get coverage up to age 99 without having to make lifelong payments by selecting a premium payment period for a specified period (e.g. while you are working full time). You’ll even receive a Longevity Reward where you can get back 100% of your total premiums paid for the base plan if you live beyond the coverage term at age 99!

For added flexibility, you can choose to end your coverage earlier from the third policy year should your protection needs change and receive a surrender benefit of 30% of the total premiums paid to date for the base plan. This surrender benefit jumps to 80% of the total premiums paid of the base plan if you prematurely end the policy after your premium term ends.

Here’s an example of how Singlife Elite Term II (Limited Pay) works

A Whole Life plan for whatever comes your way

Live life to the fullest with peace of mind, knowing Singlife Whole Life Choice has your back, even when things don’t go as planned. It provides lifetime coverage for death and terminal illness through your Base Cover, plus up to 400% of your Base Sum Assured in additional coverage until age 93, ensuring your loved ones have financial support when they need it most.

You can further enhance your protection with riders like the Early CI Premium Waiver, which waives all future premiums if you're diagnosed with early, intermediate, or severe stage critical illness.

As a whole life plan, Singlife Whole Life Choice also accumulates cash value over time. These funds can be used for retirement planning with our Income Payout Option, which offers monthly payouts in your golden years, or you can withdraw a portion for major milestones like marriage or buying a home.

You’re even covered during unexpected challenges, like retrenchment. Just apply for a 12-month premium waiver while you get back on your feet.

Here’s an example of how Singlife Whole Life Choice works:

Finding the life insurance plan that’s right for you

Getting adequate life insurance protection is one of the best things you can do as a young adult. Starting early usually means you’ll pay lower premiums, and it lays a strong foundation to safeguard your future. If you need help with picking a life insurance plan that best meets your protection needs, speak to a trusted financial adviser representative.     

^Notes

^{All ages mentioned refer to age next birthday.}

^{These policies are underwritten by Singapore Life Ltd.}

^{This is published for general information only and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person. You may get a copy of the Product Summaries from Singapore Life Ltd. and the participating distributors’ offices. You should read the Product Summaries before deciding whether to purchase the products. You may wish to seek advice from a financial adviser representative before making a commitment to purchase the products. If you choose not to seek advice from a financial adviser representative, you should consider whether the products in question are suitable for you. As buying life insurance policies is a long-term commitment, an early termination of the policies usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premium paid. Buying health insurance policies that are not suitable for you may impact your ability to finance your future healthcare needs. These are not contracts of insurance. Full details of the standard terms and conditions of these policies can be found in the relevant policy contracts.}

^{Information is accurate as at 25 October 2024.}

^{This advertisement has not been reviewed by the Monetary Authority of Singapore.}

^{Protected up to specified limits by SDIC.}