Life insurance: Comparing term and bundled products
Term is cheap and clean. Bundled products—whole life, endowment, ILPs, annuities—add investment exposure and cost. Compare them before deciding which belongs in your plan.
Last updated 2 July 2026
Key takeaways
Term insurance provides protection for a fixed period of time, and generally costs less
Products that bundle a protection and an investment component generally cost more
Products that have an investment component expose you to investment risk
When it comes to choosing life insurance, you have many options. Before asking which product is right for you, ask yourself why you want to be insured. Knowing this will help you narrow down your search for a suitable policy.
Do you want to:
Provide for your loved ones when you are no longer around?
Reduce financial loss due to illness or injury?
Protect, save and invest your money for retirement?
Leave behind some money for your loved ones as part of your estate?
Life insurance products fall under two broad categories: for protection only, and for protection and investment.
For protection only
Term insurance
Term insurance is the simplest protection product that is usually the most affordable. It provides insurance coverage for a fixed period. An example of term insurance is the Dependents' Protection Scheme.
Buy term insurance if you only need protection coverage for a fixed period of time. For example, you want to be covered until your youngest child completes university or is financially self-reliant.
For protection and investment
Whole life policy (participating and non-participating)
Whole life insurance policies provide life-long protection and also build savings which are subject to investment risk.
Endowment policy
Endowment policies are often marketed as a form of savings to help you meet a specific financial goal, such as paying for your children’s education, or building up a pool of savings over a fixed term.
However, they are not like deposits. You may not get back what you put in. A small part of your payments will pay for the insurance coverage while the rest is invested and subject to investment risk.
Investment-linked policy (ILP)
ILPs have both a life insurance and an investment component. Premiums are used to pay for units in the sub-funds of your choice. Some of the units that you buy are then sold to pay for insurance coverage and for other fees and charges, while the rest remain invested.
Annuity policy
An annuity provides a retirement income as it guarantees fixed payments at monthly intervals, for as long as the policyholder lives, or for a fixed period.
Riders
Riders may be offered to enhance the benefits of the original policy, e.g. coverage for critical illnesses. Additional premiums have to be paid for the riders and the premiums could increase with age.
Term versus bundled products
Compare both types of products as each product fulfils a specific purpose. Decide what features and benefits match your needs and buy the product that best meets them.
Features of term life insurance
Term | |
|---|---|
Type | Unbundled |
Cost of Premiums | Most affordable |
Cash value | Typically none |
Investment Risk | None |
Premium Level | Constant. Premiums are revised upon renewal. |
Features of participating whole life products
Participating whole life | |
|---|---|
Type | Bundled |
Cost of Premiums | More than term |
Cash Value | Yes. Cash value comprises guaranteed benefits and future non-guaranteed bonuses. Surrender value of guaranteed bonuses may be less than the total cash value of the policy. |
Investment Risk | You bear investment risks of the non-guaranteed bonuses |
Premium Level | Typically constant. Premiums can be paid on a regular basis. |
Features of endowment products
Participating endowment | |
|---|---|
Type | Bundled |
Cost of Premiums | More than term |
Cash Value | Yes. Cash value comprises guaranteed benefits and future non-guaranteed bonuses. Surrender value of guaranteed bonuses may be less than the total cash value of the policy. |
Investment Risk | You bear investment risks of the non-guaranteed bonuses |
Premium Level | Typically constant. Premiums can be paid on a regular basis. |
Features of non-participating endowment or whole life products
Non-participating endowment/ whole life | |
|---|---|
Type | Bundled |
Cost of Premiums | More than term |
Cash Value | Yes. Cash value comprises guaranteed benefits only. There are no bonuses. |
Investment risk | None |
Premium Level | Typically constant. Premiums can be paid on a regular basis. |
Related articles
Understanding term insurance
Maximum protection at the lowest cost—that’s term insurance. Find out how it works, how premiums are set, and when a term policy is your smartest choice.
Investment linked versus participating life insurance policies
ILP or par policy—which deserves your premiums? Compare investment exposure, bonus mechanisms, and flexibility to make a decision you won’t regret in 20 years.
Understanding whole life insurance
Whole life insurance promises lifetime coverage and cash value—but what’s the real trade-off? Understand participating policy bonuses, surrender values, and long-term costs.