Build wealth systematically while enjoying insurance protection. Endowment plans combine disciplined savings with guaranteed returns, perfect for medium to long-term financial goals.
Complete Guide
Everything you need to know about endowment plans in one visual guide.
💡 Key Takeaway: Insurance savings plans (endowments) help you save for specific goals while providing life protection. They offer both guaranteed and non-guaranteed returns.
Comparison
| Bank Savings Account | Savings Plan (Endowment) |
Investment-Linked Policies (ILP) |
|
|---|---|---|---|
| Type | Bank Account | Insurance Endowment |
Insurance + Investment |
| Liquidity | Immediate | Based on maturity of the plan |
Based on maturity of the ILP |
| Investment Risk | Nil | No risk for non-participating Investment risk for participating |
Subjected to investment risk |
| Protection Coverage | Nil | Death coverage, may add rider for TPD & CI |
Death coverage only, may add rider for TPD & CI |
| Guaranteed or Not? | Bank interest tends to be lower, but guaranteed |
Guaranteed portion + Non-Guaranteed portion |
Non-Guaranteed |
| Returns | Low 0.05% interest in normal savings account |
Medium Up to 4.25% returns |
High No cap in returns (but also no floor) |
| Ideal For | Short-term needs Emergency funds, immediate access |
Long-term planning Financial stability, wealth accumulation in SGD |
Long-term planning Financial stability, wealth accumulation in SGD |
If you're planning to stay in Singapore long-term or apply for Permanent Residency (PR), a savings/endowment plan demonstrates financial stability and commitment to Singapore. Having SGD-denominated assets also shows integration into the local financial system, which can be favorable for your PR application. Plus, these plans help you build wealth in a stable currency while enjoying tax-free returns.
Understanding Returns
Savings plans come with two types of returns. Understanding the difference is crucial.
Money you CONFIRM get back
This is the amount you'll definitely receive when the policy matures or you qualify for the payout. It doesn't matter how the market performs – you get this amount no matter what.
Example: If your policy shows $50,000 guaranteed at maturity, you will receive at least $50,000 regardless of economic conditions.
Money you MAY receive
Includes bonuses and cash payouts that depend on the participating fund's performance. The actual amount may vary based on investment results and insurance experience.
Illustrated at: 3% p.a. and 4.25% p.a. investment return rates – these are used to show potential returns, not guarantees.
Declared yearly and added to your guaranteed benefits. Once declared, it can't be taken away. Also known as Annual Bonus.
A one-time bonus calculated when your policy matures, you make a claim, or you surrender. Based on the fund's overall performance.
Payment Options
There are two main methods to pay for your savings plan.
Pay the entire premium upfront in one shot.
Best for: Lump sum savings seeking better returns than bank deposits
Pay at regular intervals – monthly, quarterly, or yearly.
Best for: Disciplined, systematic savings over time
Policy Types
Most common type – majority of endowments are participating policies.
Predictable – good for those who want certainty without market exposure.
Plan Types
Different plans suit different goals. Choose based on when and how you need the money.
Classic endowment – save consistently until the end.
Pay premiums → Lump sum payout
Pay for a limited period, let interest compound.
Pay → Compound → Lump sum
Capital guaranteed, plan keeps accumulating.
Pay → Capital safe → Keep growing
Save till maturity, get cashback along the way.
Pay + Cashbacks → Lump sum
Income stream for a set period after saving.
Pay → Monthly payouts → $0
Limited payment, lifetime income stream.
Pay → Payouts for life (capital intact)
Important
Cancel within 14 days of receiving your policy documents and get your premiums back (minus any expenses incurred for issuing the policy).
Early surrender results in high costs and low surrender value. You may get back less than what you paid, especially in the first few years.
Remember: Buying a savings plan is a long-term commitment. Only commit to premiums you can sustain even if circumstances change.
Expert Advice
Don't buy a 20-year plan if you might leave in 5 years. Choose plans that align with your expected stay.
When comparing, prioritize guaranteed returns. Non-guaranteed bonuses may not materialize.
SGD endowments provide stable currency exposure – great hedge against volatile home currencies.
Only commit to premiums you can sustain. Job loss or relocation shouldn't force you to surrender at a loss.
Different insurers offer different guaranteed portions and bonus track records. Get multiple quotes.
Your insurer provides annual updates on fund performance and projected bonuses. Review them yearly.
Common Questions
Your policy remains valid wherever you go. Continue paying premiums from overseas and receive the payout regardless of location.
Surrender value: What you get if you exit early (usually less than paid). Maturity value: What you receive when the policy completes its full term (guaranteed + bonuses).
In Singapore, returns from insurance policies are generally tax-free. However, check tax implications in your home country.
Insurers hold back some bonuses during good years to distribute during bad years, ensuring steady payouts. Guaranteed benefits are always met – any shortfall comes from the insurer's shareholders, not your policy.
Get a personalized savings plan recommendation based on your goals and timeline.