Is Whole Life Insurance Worth It?

Gredel Shadroch

Gredel Shadroch

Last updated 22 June, 2022

Whole life insurance definitely costs more, but is it worth it? It all depends on your needs. SingSaver guides you through every detail of whole life insurance and how this differs from other policies. 

We all know that getting life insurance is an investment. There’s a fair amount of money and time involved whether you get whole life insurance or another policy. 

Insurance plans cover your dependents in the event that something happens to you. Payouts are made in the event of your death, terminal illness, or permanent disablement. 

All life insurance types serve the same purpose, but we need to dig deeper in order to choose the best one for you.  Let’s understand the key features of whole life insurance to know if it’s the best plan for you.  

What is whole life insurance?

Whole life insurance, quite intuitively, provides the policy owner with insurance coverage for life. You could be covered until the age of 99, or until you pass away, giving your dependents lifelong protection.

Most whole life insurance plans also cover total and permanent disability (TPD), with some offering critical illness coverage to boot.

Two types of whole life insurance plans 

There are generally two different types of whole life insurance plans:

  • Participating whole life: A participating whole life plan consists of guaranteed and non-guaranteed cash value upon death. This non-guaranteed cash value would depend on the performance of the participating fund.
  • Non-participating whole life: A non-participating whole life plan does not pay out any bonuses, purely providing the sum assured that is guaranteed upon death.

You can buy a whole life insurance plan for yourself, or even for your children to provide them with lifelong coverage.

Whole life insurance premiums

With a whole life insurance plan, your premiums are levelled — you pay the same premiums throughout the entire policy term. 

Whole life plans also offer a limited premium payment term option, also known as limited pay, where you pay for a predetermined number of years for whole life coverage.

Whole life insurance cash value and surrender value

The biggest edge whole life insurance has against term life insurance is cash value.  Cash value is the sum of money that accumulates in your life insurance policy. 

You may also get a policy loan from your cash value. This is not recommended as the loan will be subjected to interest rates. However, this option is good for if you are cash-strapped but do not want to cancel or surrender your policy.

The sum of money you will receive if you access your policy’s cash value is called the surrender value. Though the cash value is guaranteed, it may only be surrendered if you cancel the policy, and the sum you receive will likely be less than the death benefit. However, as mentioned, you may borrow a portion of it. 


Pros and cons of whole life insurance

Pros of whole life insurance  Cons of whole life insurance
Peace of mind knowing you’re covered for life More expensive than term life insurance plans
Accumulates cash value  Incur opportunity cost by not investing the savings
Limited premium payment terms available   Lower coverage provided compared to term life plans (for the same amount of premium)
Multipliers to enhance your coverage when it matters most  
Riders available to provide well-rounded coverage   

Whole life vs term life insurance 

Considerations Term life insurance Whole life insurance
Purpose  Protection by way of financial security for beneficiaries Protection by way of financial security for beneficiaries & growing cash value
Coverage period Coverage is available as long as the term is active. Terms are usually 10 to 30 years or till the age of 65. Lifetime coverage of up to 99 years
Premium over time Premium remains levelled during the initial term. However, it increases from subsequent terms for annually renewable policies unless otherwise stated. Premium is guaranteed to remain levelled throughout the coverage.
Affordability More affordable Considerably more expensive
Cash value  No cash value Cash value is built over time at a fixed earnings rate
Guaranteed payout upon death Yes Yes
Choice of policy duration Flexible with multiple term options Unavailable
Limited premium payment Usually Payment Period is equal to Policy Period Yes

Experts recommend getting coverage that's about 10 times your annual salary. So assuming you're earning a monthly salary of S$4,000 and up, you should consider purchasing a term life insurance of at least S$400,000 in coverage.

If you're thinking of purchasing a plan with higher coverage, you'll need to link up with an agent to get an offline term life insurance plan. 

Compare the best term life insurance plans on our site. Get S$1 million coverage for just S$1.49 a day!

Whole life Insurance vs universal life insurance 

The key feature of both whole life insurance and universal life insurance is the investment returns on top of insurance benefits. However, you have the option to adjust your sum assured and your cash value with a universal life policy, while whole life insurance has fixed premiums and a guaranteed accumulation of cash value. 

The key difference is that universal life policies are typically used to leave a large inheritance for your loved ones when you pass away. Thus, your insurer would collect a substantial lump-sum premium upfront with this policy. 

Insurance Type Pros Cons
Whole Life Insurance Covers you for your entire life as long as you pay the premiums

You can surrender your policy to get the cash value

Might be a struggle to continue to pay during an economic downturn, due to level premiums, fixed death benefits, and some living benefits

Not suitable for older policyholders who can’t commit to it long-term 
Universal Life Insurance Typically leaves a substantial amount for your inheritors upon death 

Adjustable premium payments
Possible policy lapse if cash value gets lower

Interest rates influenced by market conditions


Looking for an affordable Integrated Shield Plan (IP)? Singlife Shield Starter* covers you with up to S$20,000 per policy year for hospital bills at just S$300 (before GST) fully payable by MediSave — great for young adults who want basic. For more coverage, add on the rider, Singlife Health Plus Starter, at just S$1 (before GST) and reduce co-payment of your hospital bills to just 5%!

*T&Cs apply. This product is underwritten by Singapore Life Ltd. SingSaver is not an insurance agent/intermediary and cannot solicit any insurance business, give advice, recommend any product or arrange any insurance contract. Please direct all enquiries to Singapore Life Ltd. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Five questions to ask yourself to know if whole life insurance is for you 

If you’re still uncertain about which life insurance to get, we’ve got you covered. All you have to do is answer these five simple questions:

#1: What kind of coverage do you need?

Understanding your coverage needs is the most important thing to do before investing in life insurance. 

Whole life insurance would be best if you require lifelong protection. This is especially useful if you would like to cover a lifelong dependent. It’s also a great option for those who wish to leave their heirs a sizable amount from their growing cash value. 

On the other hand, term life insurance is ideal if you would only like to insure your beneficiaries for a certain period of time. This is a good insurance plan if, for example, your children are still dependent on you, and you have other financial obligations such as repaying a home loan. You may choose the duration of the term without any obligations beyond that. 

#2: What can you afford?

It boils down to affordability as well. Whole life insurance is more expensive than other policies. So, consider your finances to see which one you can comfortably commit to. 

#3: Can I commit to this even if unforeseen circumstances happen? 

When you decide to invest in life insurance, be wary of possible changes in the future. Make sure you won’t be spending all your money on an insurance plan, especially since there may be unforeseen financial challenges. Hence, it’s advisable not to oversubscribe to expensive whole life policies if you won’t really be needing it. 

#4: Is cash value important to you?

Whole life insurance is the best policy when it comes to cash value. The cash value in a whole life policy grows over time. 

Unfortunately, this is not the case with a term life policy. There’s no cash value or any other monetary benefit with a term life policy unless you die within the term (touch wood). 

#5: Do you want to make investments other than life insurance?

It can be quite difficult to spare money in other investments when you invest in a whole life insurance policy because it can be quite expensive. Luckily, this policy has a potentially growing cash value. 

However, if you want to diversify your investments (which is a good practice, folks), then choosing term life insurance is more ideal. You would have more money to spare for other investment opportunities. Like they say, BTIR or buy term, invest the rest. 

Compare the best term life insurance plans on our site. Get S$1 million coverage for just S$1.49 a day!

Read these next: 

Buy Term, Invest the Rest (BTIR): The Complete Pros And Cons Breakdown
Buying Insurance: Pros & Cons Of Limited Premium Payment Term
ILP Versus Whole Life Insurance: What’s the Difference?
5 Best Term Insurance Plans in Singapore (2021)
5 Types Of Insurance You Can Get For Free In Singapore



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