[2024 Latest] Understanding Singapore Term Life Insurance: Advantages & FAQs

Many foreigners often travel to Singapore to buy term life insurance, and even Hong Kong insurance experts praise it. These endorsements have made Singapore’s insurance products very popular. Compared to other Asian countries, Singapore’s term life insurance stands out with clear advantages. To help you understand more about Singapore insurance, especially term life insurance, this article will provide a detailed guide on the buying process and answer common questions.

 

What is Term Life Insurance?

Term life insurance is a pure protection insurance that provides risk coverage for a specified period.

For example, if you buy a 30-year term life insurance policy and a covered event occurs within those 30 years, the insurance company will pay the sum insured to the beneficiaries or their family. If no event occurs, the policy ends after 30 years without refund of premiums or cash value. This is a consumption-type insurance designed to transfer risk to the insurance company at a low cost.

Term life insurance is characterized by low premiums, high coverage, and significant leverage, making it ideal for the primary income earners of a family to ensure financial protection during crucial periods. In the event of an accident, the family can receive financial compensation to maintain their quality of life.

Features of Term Life Insurance

  1. Consumption-Based: Pure protection with no cash value, extremely low premiums, and high leverage.
  2. High Cost-Effectiveness: Singapore’s term life insurance offers better advantages compared to mainland China and Hong Kong.
  3. Comprehensive Coverage: Covers a wide range of diseases and various stages (early, middle, late) of illness.
  4. Permanent Disability Coverage: Can cover up to 99 years old (depending on the policy term).
  5. Inability to Perform Activities of Daily Living (ADLs): Includes coverage for the inability to perform daily activities (3/6 ADLs).

Frequently Asked Questions (FAQs)

1. Can Term Life Insurance include Critical Illness Coverage?

Yes, it can. Singapore’s term life insurance mainly covers death and terminal illness as the primary benefits, with riders available to add coverage for permanent disability, late-stage critical illness, early to late-stage critical illness, and premium waivers for critical illness. Given the higher risk of critical illnesses, the premiums for critical illness coverage will be relatively higher.

 

2. What is the difference between Terminal Illness and Critical Illness Coverage?

  • Terminal Illness: Refers to diseases diagnosed as likely to lead to death within 12 months.
  • Critical Illness: Covers early to middle-stage treatable diseases and late-stage diseases where survival is possible for a long time, such as stroke, severe burns, heart bypass surgery, Parkinson’s disease, loss of speech, blindness, AIDS, etc.

 

3. What is a typical term of a Term Life Insurance Policy?

Term life insurance in Singapore can last from 5 years to 99 years. It’s usually recommended to get coverage until retirement age, like 65 or 70. If you have the budget, choosing a longer term is better. Statistics show that critical illnesses often start between ages 32 and 60, so it’s a good idea to add critical illness riders.

 

4. Do you need to travel to Singapore to sign insurance documents?

Some companies let you sign documents remotely, while others require you to come to Singapore. Whether you sign remotely or in person, your policy is protected by Singapore law, which has strict consumer protections and severe penalties for violations. For larger policies, many clients prefer to fly to Singapore to meet their agent and visit the company for added security. Despite strict laws, it’s important to stay vigilant.

 

5. Is it necessary to sign at the Insurance Company?

No, you can sign anywhere in Singapore. A financial adviser must witness the signing to validate it, so there’s no need to queue.

 

6. Do you need a Medical Examination to buy insurance in Singapore?

Not necessarily; it depends on the insurer’s requirements. For example, most companies don’t require a medical exam for term life insurance policies under SGD 2 million for clients under 55 years old. Specific requirements vary based on the client’s age, coverage amount, and the insurance company.

If there are health declarations, a medical exam might be needed. Lifetime insurance usually requires a medical exam. Your advisor can schedule these exams in advance and provide details beforehand, typically taking about an hour.

For companies allowing remote signing, clients can complete their medical exams at designated hospitals or institutions in their home country without flying to Singapore.

 

7. Do you need to travel to Singapore for claims?

No, you do not need to visit the insurance company in Singapore for claims. Both local and foreign clients can submit claim forms and hospital diagnosis documents. Documents from your home country should be translated into English (if it is not written in English) and sent to your financial adviser or the insurance company. After verification, the insurance company will directly transfer the funds to you. Make sure the submitted materials are accurate and complete to ensure efficient claims processing.

 

8. How to pay premiums for Singapore insurance?

Premiums are paid after underwriting. You can pay the initial premiums via bank transfer, automatic bank deduction, telegraphic transfer or Visa/Master international credit card. The policy application form includes an authorisation for the insurance company to deduct premiums. Subsequent premiums can be paid via automatic bank deductions, online bank transfers or telegraphic transfer. Foreigners on tourist visas can also open a bank account in Singapore.

 

9. What is the maximum coverage amount?

The coverage you can purchase depends on your age and income. If you’re under 40, you can buy coverage up to 30 times your annual income. For term life insurance policies exceeding SGD 1.5 million, proof of income is required. If you don’t have an income, you can purchase coverage up to SGD 500,000. Insurance companies typically offer coverage to clients residing in major cities, excluding regions like Tibet and Xinjiang. While the list of major cities varies slightly between companies, exceptions may be possible upon negotiation with the insurance company.

 

10. Can retirees buy large amounts of term life insurance?

In principle, those without income cannot purchase large policies. Middle-aged children cannot buy insurance for elderly parents. Seniors can buy insurance for themselves, but policies exceeding SGD 1 million require a declaration of income and proof.

 

11. What currencies are available for term life insurance in Singapore?

Certain insurance companies offer term life insurance in SGD, USD, EUR, GBP, AUD, and HKD. Other companies typically offer term life insurance in SGD. Regular whole life insurance is generally available in SGD, while high-end whole life insurance can be purchased in USD.

 

12. What is Joint Life Insurance for couples? Is it cost-effective?

Joint life insurance is commonly used when purchasing property together. If either party dies, the insurance company pays the benefit, and the policy terminates. Joint life insurance is slightly cheaper than individual policies but provides half the coverage compared to having separate policies. It is recommended for both parties to have individual policies. Additionally, joint life insurance cannot specify beneficiaries, making it complicated in the event of a divorce.

 

13. What is the conversion of Term Life Insurance to Whole Life Insurance?

Upon the expiry of a term life insurance policy, you have the right to convert it to whole life insurance without declaring health conditions or providing health certificates, as long as the coverage amount does not exceed the original term policy. The decision to use this option depends on your needs.

 

14. Is there a waiting period for Term Life Insurance?

There is no waiting period for death coverage. Some companies offer temporary accidental death coverage while waiting for underwriting results, up to a maximum of three months. If you add a critical illness rider, the critical illness coverage usually has a 90-day waiting period.

15. Can claims be made in case of DUI, Drug Use, or Criminal Activity?

Yes, Singapore insurance policies do not exclude such situations. The death exclusion clauses in some companies’ term life insurance policies typically only include suicide within the first year and death caused by war, terrorism, or exposure to nuclear or chemical weapons in the Middle East.

16. What happens if your Financial Adviser resigns?

Singapore’s insurance service is ensured by the system. Even if your financial adviser resigns, you will be assigned a new one. Advisers from Independent Financial Adviser (IFA) companies can take their clients and commissions with them if they resign. Choosing an IFA company is recommended, as they offer a wide range of insurance options, extensive knowledge, and high professionalism.

17. Does Singapore have return-of-premium Term Life Insurance?

Yes, but they are rare. Return-of-premium term life insurance policies have higher premiums and limited coverage. While you get a refund of premiums if no claims are made by the end of the term, consumption-based term life insurance or whole life insurance is generally more cost-effective.

18.  What are other worthwhile insurance options in Singapore?

Apart from term life insurance, Singapore offers excellent whole life insurance, whole life critical illness insurance, SGD/USD savings insurance, and global medical insurance. High-net-worth individuals can consider single-premium dividend-paying whole life insurance and index universal life insurance with premium financing. Premium financing is a risk-free leverage financial tool that provides high death benefits and cumulative value growth.

19. What is the information needed to get a term life insurance quotation?

Primary information includes your name, nationality, residency, gender, date of birth, smoking habit, and estimated coverage amount / sum assured. I can give you a quotation based on these information.

What’s Next?

If you would like to get a quotation of term life insurance, send your primary information to my WhatsApp (+65 8680 2340) or email (lidwinateo@fapl.sg). I will send the quotation and provide a personalised financial advice for you. Look forward to your message!

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Published By:

Lidwina Teo 维娜

With over 5 years of experience in client service industries, I come to understand and appreciate the importance of high-quality customer service and customer experience. The key is to always prioritize the best interests of customers, ensuring their needs and expectations are met with professionalism.

The passion for client service extends into my current role where I strive to deliver personalized financial planning services. With more than 150 business partners in our company, I can help you achieve your financial goals by analyzing various financial products and offering tailored financial advice. 

Contact me now to request for a quotation or schedule a coffee session for further discussion. See you soon!

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根据《个人数据保护法》,鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料(例如姓名,证件号码,联系电话,邮寄地址,电邮地址和照片)。 该政策可在本公司网站上查寻,网址为 https://fa.com.sg/data-protection-policy/.

By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.

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  • 我已阅读并理解鑫盟理财私人有限公司的个人数据保护政策,并同意鑫盟理财私人有限公司根据个人数据保护政策所阐述的用途使用我的个人资料。
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  • I have not been directly contacted or approached by any representative or employee of FAPL with an offer or solicitation to apply for any financial products not offered in my home country.
  • 鑫盟理财私人有限公司的代表或员工并未直接与我联系或提出要约或招揽购买我原居住国境内所不提供的任何金融产品.
  • Financial Alliance Pte Ltd ( “FAPL”) is licensed by the Monetary Authority of Singapore (“MAS”) and allowed to conduct financial advisory activities in accordance with the Financial Advisers Act (Cap. 110) (“FAA”) and the Securities & Futures Act (Cap. 289) (“SFA”) within the jurisdiction of the Republic of Singapore and in accordance with the licenses granted by MAS
  • 鑫盟理财私人有限公司( “鑫盟理财”)持有由新加坡金融管理局(“MAS”)所颁发的牌照,并许可在新加坡共和国境内依据财务顾问法(第110章)和证券与期货交易法(第289章)进行财务咨询等相关业务
  • Any services provided by FAPL to persons not ordinarily resident in Singapore are provided solely on an offshore basis from Singapore, resulting from direct enquiry on the part of the foreign residents.
  • 鑫盟理财为非新加坡居民所提供的任何服务仅限于直接向鑫盟理财发出咨询请求的国外居民。
  • As an integral part of the provision of such services, FAPL may from time to time make available to such residents, documents and information making reference to capital markets products (for example, in connection with the provision of fund management or investment advisory services outside of the foreign jurisdiction).
  • 作为提供此类服务的一部分,鑫盟理财会不时向此类咨询者提供有关产品的参考文件和信息(例如,关于海外司法管辖区以外的资金管理或投资咨询服务等信息)。
  • Such documents and information are provided by Financial Alliance Pte Ltd (“FAPL”) is for general information only and is not intended for anyone other than the recipient.
  • 此类由鑫盟理财所提供的文件和信息仅供收件人做一般信息参考。
  • It does not take into account the specific investment objectives, financial situation or particular needs of any particular person.
  • 此类文件和信息不会把-个人投资目标,财务状况或其特定需求等考虑在内。
  • It does not constitute the making available of, or an offer or solicitation by FAPL to buy or sell or subscribe for any such capital markets product or to enter into a transaction or to participate in any particular trading or investment strategy nor an advice or a recommendation with respect to such financial products.
  • 鑫盟理财向该人士提供此类文件和信息将不构成要约或招揽购买或出售或认购任何此类资本市场产品,或达成交易或参与任何特定的投资策略,也不构成有关此类金融产品的建议或推荐。
  • These documents may not be published, circulated, reproduced or distributed in whole or in part to any other person without FAPL’s prior written consent.
  • 未经鑫盟理财的事先书面同意,不得将这些文件全文或部分发布,传播,复制或分发给其他人。
  • This document is not intended for distribution to, publication or use by any person in any jurisdiction, where such distribution, publication or use would be contrary to applicable law or would subject FAPL and its related corporations, connected persons, associated persons and/or affiliates to any registration, licensing or other requirements within such jurisdiction.
  • 鑫盟理财无意在分发,出版或使用此类文件可能违反当地法律,或本公司及关联公司或关联人士需要注册,获得许可或符合规定的司法权区向当地人士分发、出版此类文件或供其使用。
  • You shall ensure that you have and will continue to be fully compliant with all applicable laws in your home country when entering into discussion or contracts with FAPL.
  • 在与鑫盟理财进行讨论或签订合约时,您应确保您已完全遵守并将继续遵守您所在原居住国的所有适用法律及条规。

In compliance with the Personal Data Protection Act, Financial Alliance Pte Ltd (“FAPL”) seek your consent to collect and use your personal data (e.g. name, NRIC, contact numbers, mailing addresses, email addresses and photograph) for the purposes of and in accordance with FAPL’s Data Protection Policy, which can be found on FAPL’s website at https://fa.com.sg/data-protection-policy/.

根据《个人数据保护法》,鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料(例如姓名,证件号码,联系电话,邮寄地址,电邮地址和照片)。 该政策可在本公司网站上查寻,网址为 https://fa.com.sg/data-protection-policy/.

By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.

提交此表格,即表示您已阅读并理解鑫盟理财私人有限公司的个人数据政策