Protection Planning

While everyone knows that protection is important, many are unsure about the various types of insurance protection available in the market. It is possible to over-insure yourself in certain areas, while leaving other areas “under-protected”.

Let our Financial Consultant work with you to create a well-rounded protection portfolio that best works for you, so that you get the protection you need.

Here is a simple guide to the different types of protection insurance:

Whole Life Insurance

Whole Life Insurance provides life-long protection for the policy holder’s dependants. It pays out the death benefit upon the death of the insured.

Whole Life Insurance policies are available in different forms, such as non-participating (“non-par”), participating (“par”), and investment-linked policies (“ILPs”).

Whole Life Insurance policies which are investment-linked or participating cost more because in addition to paying for insurance coverage, some of the premiums are invested to build up cash value.

The amount of premiums paid throughout the policy may be constant or subject to change.

Term Insurance

Term Insurance provides insurance protection for only a fixed period of time. It pays the sum assured only upon the death of the policy holder or if the policy holder becomes totally and permanently disabled (if this benefit is provided) during this period.

There is no savings or investment feature, so there is no cash value if the policy ends or is terminated prematurely. Term insurance costs less than whole life and endowment insurance policies for the same level of coverage.

Endowment Insurance

Endowment Insurance policies are often marketed to help meet a financial goal (paying for children’s education, building up savings, saving for retirement etc.) over a fixed policy term. 
But unlike savings deposits, the guaranteed cash value that the policy holder gets back may be less than the sum of the premiums paid. This is because part of the premiums will pay for insurance protection while the rest is invested and subject to investment risk. The insurance protection provided by endowment policies is also usually small.

Endowment policies are available in different forms, such as participating (“par”), non-participating (“non-par”) and investment-linked insurance policies (“ILPs”).

Health Insurance

Medishield Life is a basic health insurance plan (administered by CPF) that protects Singaporeans and Singapore PRs against larger hospital bills and selected outpatient treatments such as dialysis and chemotherapy for cancer for life regardless of age or health condition.

This plan is designed to pay out the majority of the bill size if the treatments/ward stay is within B2/C ward types.

When combined with MediShield Life, a Medisave-approved Integrated Shield Plan increases medical expense coverage, while the insured pays for only one premium.

With such integration, the insured can also enjoy coverage for pre and post hospitalisation treatments. Such plans are provided by private insurance companies

Many Integrated Shield Plans are “as-charged” policies and do not usually have any sub-limits except for the annual and lifetime limits. Insured needs to pay for the deductible and co-insurance portions unless riders are bought to cover them.
However, from 1 April 2021, at least 5% co-payment is implemented into the rider for existing and new insureds.

Critical Illness Insurance

Some Critical Illness Insurance policies pay a lump sum either when a critical illness is first diagnosed, or after a surgery that is covered by the policy. The lump sum does not depend upon admission into hospital, or the actual medical expenses.

Other Critical Illness Insurance policies pay a smaller amount for earlier stages of illnesses, or make several payments upon the diagnosis of different insured critical illnesses, subject to the sum insured or policy limits.

A critical illness benefit can be sold as a stand-alone plan, or packaged into a life policy.

Long-Term Care Insurance

CareShield Life is a long-term care insurance plan (administered by CPF) that protects Singaporeans and Singapore PRs against long-term personal and medical care expenses in the event of severe disability.
This plan is designed to pay out a fixed monthly benefit amount for a lifetime or until the insured recovers or passes away.
The monthly benefit amount is paid when the insured cannot perform at least 3 out of the 6 Activities of Daily Living (ADLs) on their own. The ADLs are:

  1. Transferring
  2. Mobility
  3. Toileting
  4. Washing
  5. Dressing
  6. Feeding

CareShield Life Supplement
When combined with CareShield Life, a Medisave-approved Supplement Plan increases the monthly benefit amount. This will help to enhance the insured’s coverage.

Disability Income Insurance

Disability Income Insurance pays a fixed amount each month to replace the income lost when a policy holder is unable to work as a result of an accident or illness.

These policies may pay up to 80% of the average monthly salary. They aim to ease financial loss, but does not completely replace the income the policy holder earned before the accident or illness.

The definition of ADL and the minimum number of activities that the policy holder is unable to perform to qualify for the benefits may vary from one policy to another.


Always available to help make our insurance simple and relevant

Eric has been helping my family navigate the often complex world of insurance for many years. Whenever we have questions about our policies, he is always available to help us and makes sure we understand all of the details and insurance language.

As insurance can seem like a minefield, finding someone you can trust who is also a friend is comforting.

Mr Trevor Spinks, VP Strategy
Advisor: Eric Lee

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