Featuring greater flexibility with high-interest yields, meet the new generation of insurance-savings hybrids.
If you’ve ever been torn between saving money and having insurance protection, you’d be glad to know there are financial products that combine the two.
These products — a type of universal life plan — promise to pay interest on the amount you put in, at better rates than traditional bank accounts. At the same time, you gain insurance benefits based on your account value.
However, unlike most insurance life plans, there are no fussy rules and regulations such as early surrender penalties or strict premium payment dates. In fact, these plans act more like regular savings plans, allowing you to make partial withdrawals and top-ups into your account whenever you feel like it, and with nary a fee or form in sight.
So how do these really work? Should you think of them as bank accounts or insurance policies? Are they merely a flash-in-the-pan, or a genius product you never knew you’ve been missing all along?
How do insurance savings plans work?
A good way to understand these insurance savings plans (again, we use the term loosely) is by examining the features and benefits they offer.
Let’s compare three such plans available in Singapore: Singlife Account, SingTel Dash EasyEarn and Elastiq by Etiqa.
| Minimum single premium | Interest offered | Account value that earns interest | Insurance benefit | Things to note | |
| Singlife Account | $500 | Up to 2.5% per annum on the first $10,000, and up to 1% per annum on the next $90,000 | $100 – $100,000 | Death or terminal illness: Up to 105% of account value Retrenchment: Up to $10,000 over 3 months | Includes complimentary VISA debit card No service, withdrawal or surrender fees No lock-in period |
| Elastiq by Etiqa | $5,000 | 1.8% per annum for first 3 years | $5,000 – $200,000 | Death: Up to 106.8% of account value | Loyalty bonus every 3 years, provided no partial withdrawals made, equal to 0.3% of average monthly account value Service fee of $5 if average daily account value is less than $5,000 No withdrawal or surrender fees Lock-in period: 90 days Funds transfer via PayNow, FAST, Direct Debit (for DBS/POSB only) |
| SingTel Dash EasyEarn | $2,000 | 2% per annum for the first year | $2,000 – $20,000 | Death: Up to 105% of account value | No service, withdrawal or surrender fees No lock-in period Funds transfer via SingTel Dash app (eNets) |
Singlife Account: Generous returns with useful insurance benefits
Of the three plans, Singlife Account stands out for its refreshingly different proposition.
Sign up and you can earn up to 2.5% per annum on your deposits, up to the first $10,000. On the next $90,000, you’ll earn 1% per annum. Sadly, if your account’s value exceeds $100,000, you won’t earn any more interest.
Let’s examine why this is so attractive. Firstly, up to 2.5% per annum is the highest returns among the three. (However, these returns are not guaranteed, and you may get poorer rates). Secondly, while the returns drop significantly after the first $10,000, you are allowed to get there on your own schedule. Other plans give high payouts for a limited time only.
Now, let’s talk about the insurance benefits you’ll enjoy. Your account value (i.e. how much you have inside your Singlife Account) forms the death benefit that will be paid out upon your death or diagnosis of terminal illness; your beneficiaries will receive up to 105% of the account value.
So, if you’ve managed to max out your Singlife Account, you’ve gained a $100,000 life insurance policy. Even if you don’t hit the cap, any amount you have accrued forms a life policy of equivalent value.
Additionally, there’s also a retrenchment benefit which you can tap on. This benefit allows you to claim up to $10,000 over three months, should you become unemployed for four months or more. The actual benefit you can claim is dependent on your spending habits: it is the average spent from your Singlife Card over the last six months of employment.
Singlife Card? Yes, your Singlife Account is linked to a complimentary VISA Debit Card with no annual fee or foreign exchange charges.
Take note that in order to earn interest, your account value must be at least $100.
Who is it for?
With its flexible character and useful features, Singlife Account is best suited for users looking for a fuss-free everyday spending account while building towards the foundations of a life insurance plan.
Minimum premium, eligibility and other notes
If you’re interested to sign up for a Singlife Account, take note of the following:
- Minimum premium: $500, top up at anytime
- Maximum account value: No limit
- Requires Singlife app
- Eligibility: Singapore citizen, PR or Work Pass holder, between 18 and 75 years old
- Funds transfer: FAST
- Free-look period: 14 days
Elastiq by Etiqa: Savings plan with classic insurance features
With the closest resemblance to traditional bank and insurance products, Elastiq by Etiqa Insurance may be most appreciated by conservative types.
The plan pays out a guaranteed return of 1.8% per annum for the first three years, which will be most rewarding for savers starting with a large deposit. Perhaps because of this, only initial single premiums of between $5,000 and $50,000 (in multiples of $1,000) are allowed, although you can top-up your account to a maximum of $200,000.
From the fourth year onwards, your account will earn interest at the prevailing rate, which won’t vary much, owing to the relatively safe nature of these types of investments (mostly bonds).
On top of the advertised return, you will also earn a loyalty bonus every three years. This bonus is equivalent to 0.3% of the average of your monthly account value in the previous 36 months, but it will only be awarded if you didn’t make any withdrawals during the period.
Emphasising the insurance roots of the plan are features such as a 90-day lock-in period before you can make your first withdrawal, and a $5 service fee should your daily account value falls below $5,000.
As for death benefit, your beneficiaries will receive up to 106.8% of your account value at the time the request is processed.
Who is it for?
Disciplined savers who are looking for a rewarding yet slightly more flexible alternative to traditional endowment plans or high-yield banking accounts.
Minimum premium, eligibility and other notes
If you’re interested to sign up for Elastiq, take note of the following:
- Minimum premium: $5,000, top up at anytime
- Maximum account value: $200,000
- Eligibility: Singapore citizen, PR or Work Pass holder, between 18 and 75 years old
- Funds transfer: PayNow, FAST or Direct deposit (DBS/POSB only)
- Free-look period: 14 days
Singtel Dash EasyEarn: Save and boost your digital wallet funds
Those of you who are familiar with digital wallets would no doubt have heard of Singtel Dash. In case you’ve been meaning to jump on the bandwagon, but find the lack of interest a turnoff, EasyEarn may change your mind.
Essentially, EasyEarn (which is underwritten by Etiqa insurance, incidentally), adds the ability to earn some interest on the funds stashed in your digital wallet, providing the same advantage as a traditional bank account.
The plan is advertised as paying out 2% per annum in the first year, putting it on equal footing with many competing alternatives. However, it is not clear what the rates will be from the second year onwards, but we’re guessing 1.5% per annum or near.
To start your EasyEarn, you’ll need to put in a single premium of at least $2,000, and you can top up your account to a maximum of $20,000.
Granted, you’ll be covered for up to 105% of your total account value in death benefits when you sign up for this plan, but do bear in mind that the account value is capped at $20,000. You should make a proper assessment whether this is adequate for your beneficiaries.
Who is it for?
Digital wallet users looking to boost their digital wallet funds by collecting passive returns.
Minimum premium, eligibility and other notes
If you’re interested to sign up for Singtel Dash EasyEarn, take note of the following:
- Minimum premium: $2,000, top up at anytime
- Maximum account value: $20,000
- Eligibility: Singapore citizen, PR or Work Pass holder, between 18 and 75 years old
- Funds transfer: eNets
- Singtel Dash app required
- Free-look period: 14 days
Read these next:
Fixed Deposit vs Singapore Savings Bond (SSB) vs Savings Account: Where To Put Your Money?
Best Alternatives to Savings Accounts in Singapore (2020)
Best Savings Accounts in Singapore to Park Your Money (2020)
Regular Savings Plan (RSP): What They Are And The Best Ones To Invest In
5 Types Of Insurance You Can Get For Free In Singapore
By Alevin Chan
An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.
