Singlife offers new indexed universal life plan amid growing HNW demand

[SINGAPORE] Customers of financial services company Singlife can now gain exposure to global market performance through indices such as the S&P 500 Index without directly investing in equities – all within the structure of an insurance policy.

The group on Thursday (Feb 26) launched its Singlife Legacy Indexed Income plan, a whole-of-life, non-participating universal life (UL) plan which offers income linked to five selected indices: the S&P 500 Index, S&P 500 Engle 8% VT TCA Index, Nasdaq-100 Engle 8% Index, UBS Global Multi Asset Engle 8% Index and UBS Gold Engle 8% Index.

Customisable lifetime income

Singlife said that the plan “offers growth potential alongside highly customisable income streams”.

A built-in floor rate of 0 per cent per annum ensures no negative returns are credited, helping to mitigate the impact of market volatility on policy value.

Policyholders can also decide how much income to receive each year, when payouts begin and how long they last. They can receive income while continuing to accumulate wealth.

During each policy year in the payout period, income is distributed based on index performance up to the selected annual target. Any additional gains within the same year are automatically reinvested to support continued policy value growth.

From the 11th policy year onwards, a guaranteed loyalty bonus adds an extra 0.7 per cent per annum crediting rate to the index account.

For legacy planning, the plan allows the life assured to be changed up to five times, allowing the plan to be transferred across generations. It also offers guaranteed acceptance without requiring medical underwriting.

Other features of Singlife’s latest UL plan include lifelong protection against death and terminal illness, penalty-free partial withdrawals during key life events, and the option to spread premiums allocated to the index account over 12 months to manage the impact of market volatility.

Growing demand for UL plans

The launch comes amid growing demand for UL plans, fuelled by rising wealth creation across Asia-Pacific.

These policies have long been a mainstay of high-net-worth (HNW) insurance, which emphasises multigenerational wealth and legacy planning. Insurers have reported increasing take-up of indexed universal life (IUL) policies with larger sums assured.

In 2024, Singlife launched the Singlife Legacy Indexed Universal Life, marking its earlier foray into the indexed UL segment.

Traditional UL plans, which have been in the market for decades, generate returns via a fixed crediting rate. However, interest in such structures has waned, giving way to IULs, which aim to offer a blend of capital stability and market-linked upside.

Typically, premiums are divided into two accounts: a fixed account earning a crediting rate of about 2 per cent per annum, and an index account where clients select their preferred market exposure.

However, IULs are not just for the ultra-wealthy. While some insurers require a minimum sum assured of US$1 million to US$2 million, Singlife and Great Eastern set theirs at US$250,000.

Wong Lu Ping, head of savings and investments at Singlife, noted that its latest UL plan can complement guaranteed retirement income sources such as CPF Life payouts and endowment plans by providing an additional income stream linked to the performance of globally-recognised indices.

“Rising life expectancy, escalating living costs and global uncertainties make it increasingly important for individuals to have multiple diverse income streams to support their retirement years,” she added.

Singlife’s Legacy Indexed Income plan comes amid similar product launches in the market.

Last month, HSBC Life Singapore introduced HSBC Life Indexed Flexi Income, an IUL plan designed to provide lifetime income, wealth accumulation and protection across life stages.

The plan offers guaranteed lifetime increasing income options up to age 120 and also allows policyholders to determine when payouts begin, with flexibility to pause or resume distributions.

Similar to Singlife’s plan, HSBC Life Indexed Flexi Income supports legacy planning through succession features that allow transfers across up to five generations. Its index account also provides access to global benchmarks, including the S&P 500 Index, Nasdaq-100 Index, S&P Global Diversified Index and S&P U.S. Tactical Multi-Asset Index.

The plan is said to build on HSBC Life Singapore’s ongoing efforts to “broaden its suite of integrated protection, accumulation, retirement and legacy planning solutions to meet increasingly complex wealth needs”, said the insurer.