Universal Life Plans versus Whole Life Plans

Posted on Feb 2, 2014

Before anyone settles down on any type of insurance in Singapore, a consultation with a financial adviser is fully recommended. All the more so for life insurance, where a commitment is required for life. Owners should understand what they are investing in before signing on that sheet of paper.

There are two types of life insurance in Singapore – Universal Life Plans and Whole Life Plans. Though both are life insurance, they cater to people with different needs and wants. Below are a few listed differences of a Universal Life Plan and a Whole Life Plan. A Universal Life Plan is also sometimes known as permanent life insurance.

In whole life plans, funds are invested in fixed income securities and equities and the cash and surrender values comes in as a guaranteed and non-guaranteed return. Bonuses received fall under non-guaranteed returns, and once collected, are accounted under the guaranteed death benefit and cash value.

Universal Life Plans are created to pay fixed or guaranteed benefits, targeted at high net worth individuals and are usually denoted in US currency.  In addition to flexible premium options, returns are also steered by a quoted interest rate. The advantage of  a Universal Life policy comes in the transparency of charges where monthly or quarterly statements are issued to clients. With Whole Life Plans, the insurance buyer is unable to get a clear view of their bonus payouts.

In any case, these points are only for your reference. To make a more informed choice, understand more about these two different policies from an advisor, who can guide you through and suggest the most suitable policy for you and your love ones.


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