Last Updated on July 6, 2023 by Tree of Wealth

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Term insurance is an excellent choice for those seeking substantial coverage at an affordable cost. It provides financial protection for a specified period or ‘term’, ensuring your loved ones can maintain their standard of living in the event of your untimely passing. It’s the purest form of life insurance, providing maximum death benefit per premium dollar, making it an ideal choice for individuals with temporary, substantial coverage needs.

As its name implies, Term Insurance is a type of insurance that provides coverage for a specific period of time and a predetermined amount of money. During this term, the policyholder pays a premium to the insurance company in exchange for the death benefit, which is the amount of money that will be paid out to the beneficiaries in the event of the policyholder’s death.

It is characterized by its low premium costs in comparison to Whole Life Insurance policies. For individuals who are financially savvy, they may opt for the strategy of “Buying Term and Investing the Rest (BTIR).”

What Do You Mean by Term Insurance?

The main advantage of term insurance is its affordability. Compared to other types of life insurance such as whole life insurance, term insurance has much lower premiums. This is because the policy only provides coverage for a specific period of time and does not have any investment or savings component.

Term insurance plans provide coverage for a designated length of time and a specific sum assured.  This is another advantage of term insurance which is its flexibility. Policyholders can choose the length of the term that best suits their needs and budget. For example, if the policyholder is young and wants to ensure that their children are financially protected until they are grown, they can choose a term of twenty years. On the other hand, if the policyholder is nearing retirement age and wants coverage for a shorter period of time, they can choose a term of ten years.

They are especially beneficial during life events such as getting married, obtaining a new property (such as with a Mortgage Reducing Term insurance plan), having a baby, or graduating from school. Some insurance providers also offer a Guaranteed Insurability Option, which allows policyholders to increase their coverage as they reach these important milestones.

It’s important to note that term insurance does not build up any cash value and will not provide any payout if the policyholder does not die during the term of the policy. This means that if the policyholder outlives the term, they will not receive any benefit from the policy.

For example in the event of the policyholder’s death or total and permanent disability or occurance of critical illnesses, term insurance will pay out a one-time benefit (which is often higher than that of Whole Life Insurance due to its more affordable premiums) within the specified term. If no such event occurs during the term, the coverage will end and no maturity value will be provided.

Why Do We Need Term Insurance?

Term insurance is often chosen for specific financial goals and time frames. For example, it can be used to provide additional coverage when a new child or dependent is added to your household, or to cover a mortgage loan in the event of death.

The cost-effectiveness of term insurance makes it a wise choice for ensuring financial stability and offering peace of mind. To meet your unique needs, there are numerous additional riders available to enhance your coverage for various aspects of your life. These riders can offer protection and replacement of income for your dependents in the event of death, critical illnesses at all stages, and disability.

With the right combination of riders, term insurance can be a comprehensive solution for securing your financial future.

There are several reasons why individuals may need term insurance

1. Financial protection for loved ones: Term insurance can provide a source of financial protection for the policyholder’s loved ones in the event of their death. The death benefit can help cover expenses such as funeral costs, outstanding debts, and living expenses.
2. Temporary coverage: Term insurance is ideal for individuals who only need coverage for a specific period of time, such as when they are starting a family or paying off a mortgage.
3. Affordability: Compared to other types of life insurance, term insurance has lower premiums, making it an affordable option for many individuals.
4. Flexibility: Policyholders can choose the length of the term that best suits their needs and budget. This allows them to adjust their coverage as their life circumstances change.
5. Estate planning: Term insurance can be used as part of an estate plan to help pay for estate taxes and other expenses.

Affordable Premiums

High Coverage for a low premium, they are suitable for all ages. Even for retirees that are starting to get themselves covered.

Comprehensive Coverage

Flexible Supplementary Benefits can be customised to suit your exact concerns.

Flexible Period Coverage

You can choose to decide on how long you want the coverage to last.

The Different Types of Term Insurances

Level Term Life Insurance

Level Term Life insurance, the most common Term insurance, is a type of life insurance that provides coverage for a specific period of time, typically ranging from 10 to 30 years. With a level term life insurance policy, the death benefit remains the same throughout the policy term, while the premium payments remain constant and are guaranteed to not increase. This type of policy is designed to provide coverage for a specific period of time, such as to cover the financial needs of a mortgage or to provide for one’s dependents. If the policyholder dies during the term of the policy, the death benefit is paid out to the beneficiaries tax-free. If the policyholder does not die during the term of the policy, the coverage will expire without any value being paid out.

Renewable Term Life Insurance

Renewable term life insurance is a type of life insurance policy that can be renewed at the end of a specified term, typically ranging from one to ten years, without the policyholder having to undergo a medical exam. The premium for a renewable term life insurance policy may increase at the time of renewal, based on the policyholder’s age and health status.

This type of policy is a convenient option for individuals who want to maintain their life insurance coverage without undergoing a medical exam at each renewal. However, it is important to note that the premium for a renewable term life insurance policy will likely be higher than a traditional term life insurance policy because the insurer is assuming more risk.

If the policyholder dies during the term of the policy, the death benefit will be paid out to the beneficiaries tax-free. If the policyholder does not die during the term of the policy, the policy can be renewed for an additional term, allowing the policyholder to maintain their life insurance coverage.

Reducing Term/ Mortgage Reducing Term/ Decreasing Term Life Insurance

Reducing term life insurance, also known as Decreasing Term Life Insurance or Mortgage Reducing Term Insurance, is a type of life insurance policy where the death benefit decreases over time while the premium remains the same. This type of policy is commonly used to provide coverage for a specific financial obligation, such as a mortgage, where the balance decreases over time.

The death benefit of a reducing term life insurance policy decreases over the policy term, typically aligning with the decreasing balance of the financial obligation being covered. For example, if a policyholder has a reducing term life insurance policy to cover a mortgage, the death benefit would decrease over the term of the policy to match the declining balance of the mortgage.

If the policyholder dies during the term of the policy, the death benefit will be paid out to the beneficiaries tax-free. If the policyholder does not die during the term of the policy, the coverage will expire without any value being paid out.

Premiums At a Glance

Profile: Age 30, Non smoker.

Sum Assured of $1, 000, 000 Death and Total Permanent Disability with $500, 000 Critical Illness Coverage to 65 years old

Insurer	Annual Premium – Male	Annual Premium – Female
Singlife	$1,660.60	$1,494.90
AIA	$1,931.75	$1,875.75
China Taiping	$1,653.75	$1,633.25
Etiqa Life	$1,191.80	$1,296.20
HSBC Life	$1,272.60	$1,206.60
Tokio Marine	$1,485	$1,488
Manulife	$1,873.50	$1,737

Singlife Elite Term Plan

• Offers high sum assured at low premium cost for Death, Total Permanent Disability (TPD), Terminal Illness and Critical Illness (CI) including Early CI and MultiPay CI.
• Premium term flexibility: Minimum 5 or 10 years for renewable term, or 11 years onwards up to 85 years old with year intervals.
• Guaranteed Renewable Option (GRO): For 5 and 10 years policy term, renews policy automatically every 5 or 10 years with no medical questions or health underwriting needed.
• Option to increase coverage at Key Life Events without need for medical underwriting or proof of insurability:
  • Change of marital status (Marriage or divorce)
  • Becoming a parent (newborn or legal adoption)
  • Graduating from Tertiary Education
  • Purchasing a property
• Can convert the Singlife Elite Term insurance into an Endowment or Whole Life insurance without medical underwriting.
• Includes Interim Accidental Death Benefit.
• Early CI Rider offers additional payout that does not reduce sum assured.
• Supplementary Benefit Riders available to enhance coverage:
  • Covers for Life, Total and Permanent Disability, Advance Stage Critical Illness
  • Early Critical Illness Cover II: Covers Early to Advance Stage Critical Illness (Single CI Payout)
  • MultiPay Critical Illness (CI) Cover IV: Pays out Early to Advance Stage CI multiple times up to 900%
• Premium Waiver Riders (coverage during premium term):
  • Critical Illness Premium Waiver
  • Payer Critical Illness Premium Waiver
  • Payer Premium Waiver Benefit

Read More Here:

Singlife Elite Term Plan In Depth Review

Etiqa Essential Term Life Cover

• Policy Term Options: 5 years renewable term up to 90 years old, 10 years term until 86 years old, or coverage term until 100 years old.
• Flexibility to Increase Sum Assured: Can increase without showing health status at specific life milestones – graduation, marital status change, property purchase, birth/adoption of a child, enrolment into tertiary education.
• Guaranteed Convertibility Benefit: Option to convert term insurance to Etiqa’s participating policy of endowment or whole life insurance without showing health status.
• Supplementary Riders:
  • Advanced CI (Critical Illness) Rider: Pays out basic sum assured for any of the 36 advanced stage critical illnesses.
  • Early CI (Critical Illness) Rider: Pays out basic sum assured for any of the 35 early and intermediate stage critical illnesses, waives future premiums for remaining sum assured for CI if early/intermediate CI claims are paid, provides 12 months of monthly payouts upon advanced stage CI diagnosis, covers 23 special conditions.
  • Extra Disability Care Rider: Pays out basic sum assured for total and permanent disability occurrence before the policy anniversary of 86 years old.
  • Extra Secure Waiver Rider: Waives future premiums upon diagnosis of 37 advanced stage critical illnesses before 86 years old or when premium ends.

Read More Here:

Etiqa Essential Term Life Cover Review

HSBC Life Term Protector

• Coverage Term: Options until age 50, 55, 60, 65, 70, 75, or 99, or renewable term of 5, 10, 15, 20, 25, or 30 years.
• Automatic Renewal: Guaranteed regardless of health, with recalculated premiums based on renewed age.
• Inflation Protection: Sum assured and premium increase with Singapore CPI or fixed 5%, requires activation.
• Policy Conversion: Option to convert into regular premium life insurance before 60 years old without medical underwriting, subject to terms and conditions.
• Supplementary Riders:
  • Early Critical Illness (CI) Payout: Coverage from early to advanced stage, including special benefits and juvenile conditions.
  • Advance CI Payout: Coverage for advanced stage critical illness only.
  • Advance Total and Permanent Disability Payout: Coverage for TPD, 3 out of 6 ADLs, or loss of 2 limbs.
  • Disability Cash Benefit: Annual cash benefit paid upon TPD occurrence.
  • Critical Illness Plus Benefit: Lump sum payout upon critical illness diagnosis without affecting main sum assured.
  • Personal Accident Benefit: Payout for accident-related injuries or death, without affecting main sum assured.
  • Guaranteed Survival Payout: Reimbursement of sum assured for outliving the policy, guaranteed issuance without medical questionnaire, only for premium term until age 99.
  • Premium Waiving Riders: Critical Illness PremiumEraser and Payer PremiumEraser, waives future premiums under specific conditions (critical illness diagnosis, TPD, or death of payer). Option to waive premiums for 6 months in case of involuntary loss of income.

Read More Here:

HSBC Life Term Protector Review

Tokio Marine Term Assure II

• Premium and Policy Term Options: 5 or 10 years renewable and convertible term insurance, no medical underwriting needed for renewal. Premiums recalculated based on age at renewal.
• Level and Convertible plan: Available from 11 years up to age 85.
• Protection includes: Death, Total and Permanent Disability (TPD), Terminal Illness (TI).
• Plan Currency Options: SGD, USD, GBP, AUD.
• Guaranteed Insurability for Additional Insurance: Coverage increase possible at life milestones (marriage, divorce, parenthood, graduation, property purchase) without medical underwriting.
• Guaranteed Conversion Privilege: Option to convert term insurance to whole life insurance or endowment plan.
• Guaranteed Renewal Privilege: Automatic policy renewal at term end, regardless of health condition.
• Supplementary Benefit Riders Available:
  • Critical Illness (CI) Accelerator Rider: Advance payout of death benefit upon Advanced Stage CI diagnosis.
  • Waiver of Premium Rider & (Enhanced) Payer Benefit Rider: Premiums waived in case of Death, TPD or diagnosis of covered CIs.
  • Early Critical Illness (ECI) Accelerator Rider: Advance payout of death benefit upon diagnosis from Early to Advanced Stage CI, includes Special and Juvenile Conditions.
  • KidAssure GIO Rider: Covers death, hospitalization, and juvenile/child-related illnesses. Returns 80% of premiums paid at child’s age 19 upon the rider’s maturity.
  • Protect 1 Lite Rider: Monthly benefits for 6 years upon the loss of ability to perform 1 out of 6 ADLs. Payouts range from $1,000 to $10,000.

Read More Here:

Tokio Marine Term Assure II Review

China Taiping i-Protect Term Plan

• Flexible Policy Coverage: Options to choose coverage until 65, 75, or 85 years old, or choose from 11 to 40 years of coverage duration.
• Yearly Renewable Term: Automatic yearly renewal for 5 and 10-year premium term options until 85 years old, regardless of health condition. Premiums revised based on age at the end of each 5 or 10-year term.
• Convertibility Option: Allows conversion of China Taiping term plan to a life plan over time without requiring further medical underwriting.
• Comprehensive Early Critical Illness Coverage: Covers total of 161 conditions, from early to intermediate to advanced stage critical illness, along with special conditions.
• Optional Supplementary Riders:
  • EarlyCare Rider: Covers 161 conditions from early to advanced stages and an additional 12 special conditions.
  • AdvancedCare Rider: Covers up to 55 advanced stage critical illnesses, beyond the 37 critical illnesses listed by the Life Insurance Association. These include blindness, deafness, burns, kidney failure, heart attack, stroke, and major cancer.
  • DisabilityCare Rider: Provides a lump sum payout equivalent to the main sum assured in the event of Total and Permanent Disability (TPD).

Read More Here:

China Taiping i-Protect Term Plan Review

AIA SECURE FLEXI TERM

• Premiums stay the same throughout the coverage term and will not change.
• Covers Death, Terminal Illness and Terminal Cancer
• Lifetime Protection
• Choose 5, 10, 20 or 30 years for Renewable Term Option
• Level Term Coverage up to age 65, 75 or 100
• AIA Vitality
• Earn points and get rewarded for eating healthy and exercising more
• Waiver of premiums – upon diagnosis of Critical Illness or Disability, future premiums will be waived off to protect family members and loved ones from additional expenses and costs.
• Ability to Convert into Endowment, Investment- linked or Whole Life Insurance – Before age of 70
• Critical Illness Coverage for 43 Conditions
• No early Stage CI
• No Multipay Options

Read More Here:

AIA SECURE FLEXI TERM Product Information

Manulife ManuProtect Term II

• Policy duration options:
  • 5 or 10 years (renewable & convertible)
  • 11 to 40 years (level & convertible)
  • Coverage up to age 65, 75, or 85 (level & convertible)
• Regular premium plan with level and assured premiums. Payment frequencies available include monthly, quarterly, half-yearly, or annually.
• Two types of plans with different premium structures: Level & Convertible (higher but stable annual premium) vs Renewable (lower initial premium but revised with each renewal based on age).
• Coverage includes Death and Accelerated Terminal Illness (TI) benefits.
• The plan includes a conversion option, which allows policy conversion without medical underwriting before the policy anniversary following your 65th birthday.
• Guaranteed renewability ensures automatic renewal of 5 and 10-year term policies irrespective of health condition.
• Offers a Quit Smoking Incentive (QSI) that provides lower non-smoker premium rates for initial 3 policy years for smokers who plan to quit.
• Optional supplementary benefits or riders are available, such as Total and Permanent Disability Plus (II) and Critical Illness riders.
• TPD Plus (II) offers enhanced protection in the event of Total and Permanent Disability with varying provisions according to the insured’s age.
• The Critical Care Enhancer (II) Rider provides protection against 36 critical illnesses and accelerates the payout of the death benefit from the base plan upon diagnosis.
• CCE (II) Rider also includes a Serious Illness of a Child Benefit that provides a lump-sum payout if your child is diagnosed with any of the 36 covered critical illnesses.
• Critical Care Waiver Rider and Early Critical Care Waiver are optional riders that waive future premiums upon the diagnosis of a covered critical illness, including early-stage illnesses.

Read More Here:

ManuProtect Term II (Term Insurance) Review

Premium Breakdown

Profile: Age 30, Non smoker.

Sum Assured of $1, 000, 000 Death and Total Permanent Disability with $500, 000 Critical Illness Coverage to 65 years old

Insurer	Annual Premium – Male	Annual Premium – Female
Singlife	$1,302	$1,182
AIA	$1,932	$1,875
China Taiping	$1,654	$1,635
Etiqa Life	$1,895	$2,075
HSBC Life	$1,272	$1,206
Tokio Marine	$1,485	$1,488

Conclusion

In conclusion, term insurance is a simple and cost-effective way to provide life insurance coverage for a specific period of time. It’s an ideal option for individuals who are looking for a temporary solution to protect their loved ones and ensure that they are financially secure in the event of the policyholder’s death. However, it’s important to carefully consider the length of the term and the death benefit amount to make sure that the policy meets the policyholder’s needs and budget.

It’s important to note that the various types of term life, renewable term and reducing term life insurance is a specialized type of insurance and may not be suitable for everyone’s needs. It’s best to consult with a financial advisor or insurance professional to determine if a reducing term life insurance policy is right for you.

Got a query? Contact us below today to see how much cover you require and learn about how Term Insurance’s flexibility and how it can work around your needs and concerns.

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