Summary of Common Life Insurance Polices


  Term

Participating whole life

Participating endowment

Investment Linked (ILP)

Key objective

Protection

Protection plus potential to grow your savings.

Protection and potential to reap some investment returns.

Scope of coverage

Most plans cover death and permanent disability, though the payment schedules and definitions of disability vary across products.

Coverage period

A specific number of years or up to a specific age.

Whole life

A specific number of years or up to a specific age.

Can be whole life or for a specific period.

Elements to help grow your savings

Nil. If nothing happens to you during the term of the policy or if you terminate your policy, you will not receive any policy proceeds.

Bonuses may be declared each year, largely based on the performance of the participating fund. Note that projected bonuses are not guaranteed.

Sub-fund values are not guaranteed, and depend on the investment performance of the underlying sub-fund(s).
Note that ILPs are subject to investment risks.

Comparison of payouts of common life insurance policies

 

What is paid upon death of insured?

What is paid if policy surrendered early? 

What is paid at expiry of policy term?

Term

Sum assured

No payment; no cash value

Generally no payment

Whole life non-par

Sum assured

Cash value

No payout of sum assured.

Coverage is for whole life. The policy terminates upon the death of the insured.

But if there is a specified expiry age/ date, the sum assured is payable at expiry age/date.

Whole life par

Sum assured + accumulated bonuses, if any.

Cash value comprising guaranteed value and non-guaranteed bonuses, if any, but guaranteed portion would be less than amounts guaranteed to be paid upon death of insured.

No payment of sum assured.

Coverage is for whole of life. The policy terminates upon the death of the insured.

But if there is a specified expiry age/date, the sum assured plus accumulated bonuses (if any) is payable at expiry age/date.

Whole life investment linked policies

Generally, sum assured + value of units in fund

Note that for some policies, the amount payable may be the higher of the sum assured or the value of units in sub-fund

Value of units in fund

No payment of sum assured.

Coverage is for whole of life. The policy terminates upon the death of the insured.

But if there is a specified expiry age / date, the value of units in sub-fund is payable on expiry age/date.

Endowment non-par

Sum assured

Cash value

No payment of sum assured.

Sum assured

Endowment par

Sum assured + accumulated bonuses, if any.

Cash value comprising guaranteed value and non-guaranteed bonuses, if any, but guaranteed portion would be less than amounts guaranteed to be paid upon death of insured.

No payment of sum assured.

Sum assured + accumulated bonuses, if any.

Endowment investment linked policies

Generally, sum assured + value of units in sub-fund

Note that for some policies, the amount payable may be the higher of the sum assured or the value of units in sub-fund.

Value of units in sub-fund

No payment of sum assured.

Generally, value of units in sub- fund.