Moneyline Singapore compares over 15 life insurance companies to get you the best whole life insurance plan in Singapore.…
It is extremely common for life insurance policies to be purchased by foreigners in Singapore from all woks of life. In this article we will group the type of life policies the type of foreigners is able to purchase from Permanent Residents all the way to Leisure travelers or Passer by (a lingo for foreigners that comes to Singapore just to buy life Insurance)
We know that Singapore is a cosmopolitan city, today, it has one of the highest population densities of foreigners living here whether is it for work, holiday, medical or visitation of relatives. Be-known to many, Singapore is also a financial hub, it has one of the most robust financial structure in the world and many financial institutions set up shops and even headquarters here as a springboard into the South East Asian or even the whole Asian region.
Singapore has also ranked extremely well in terms of governance, safety, human development and cleanliness. It leads in being one of the least corrupted countries in the world and is often ranked top in competitiveness in recent time.
In the life insurance sector, it is a heavily regulated industry with many enforcement to protect customers. The Monetary Authority of Singapore also known as MAS has implemented thorough legislation, regulations, directions and notices. Guidelines have also been formulated to encourage best practices among financial institutions.
Singapore permanent residents are equivalent to Singaporeans when it comes to purchasing insurance in Singapore. Not only can they buy all the available cash only products in the market they are also able to utilize their CPF monies to pay for insurance like HPS (Home Protection Scheme) which is a mortgage insurance for HDB Flats. PR will also be able to purchase DPS (Dependent Protection Scheme) as a low sum assured term insurance coverage payable using their CPF Ordinary Accounts. Singapore PR can also purchase Integrated shield plans (An upgrade of the compulsory Medishield life scheme initiated by the Singapore Government) using their medisaves.
It will also be compulsory for PRs to purchase the Careshield life which is a long-term care scheme payable by CPF Medisave to provide a lifetime monthly income benefit in the event the insured is diagnosed with severe disabilities (inability to do 3 out of 6 activities of daily living). Permanent Residents will also be able to utilise their medisave of up to $600 each year to upgrade their Careshield life, this will provide higher monthly payout and a more lenient claim definition (inability to do 2 out of 6 activities of daily living).
Similar to a Permanent Resident, a work pass holder will be able to purchase any type of insurance that can be payable by Cash in Singapore. Some work pass holders e.g. Employment Pass and S Pass, will be able to create an SRS account for tax saving purposes and purchase a life insurance plan using their SRS account.
Most work pass holders will also be able to purchase life insurance products with and without cash value. Some limitation for Work pass holder will be the inability to purchase certain products that can be payable using CPF accounts as work pass holders do not contribute to CPF in Singapore.
Such plan includes but are not limited to DPS, Careshield Life and HPS. Certain insurers allow work pass holders to purchase their integrated shield plans with certain restrictions. E.g. a work pass holder will not be able to utilise any medisaves to fund such plans and will be required to pay in full using cash. Insurers may also require Work pass holders to purchase a higher-grade hospital ward coverage with riders at a slightly higher premium than PR and Singaporeans
Dependent pass and passholders not working in Singapore are also as eligible to purchase any life insurance plans as much a work pass holder. Typically, the challenge of such pass holders will be the requirement to proof the source of funds for their purchase, such requirement is not much of a concern if their spouse or family member is holding a work pass, citizenship or permanent residence id in Singapore.
Non-working pass holders can also purchase the integrated shield and medishield life program using cash with some of the insurers. If their family members are local or permanent residents, they will be eligible to more options in the integrated shield plan space and will enjoy rates similar to PR and Singaporeans.
Due to their status as a non-working resident, they are not eligible to contribute to SRS and will not be able to purchase any SRS related life insurance plans. These pass holders are also not eligible to purchase DPS, Careshield Life and HPS as they do not contribute to CPF even if their spouse does.
Limitations
Short term visit pass/passer-by’s in Singapore are more restricted than the other categories, the reason is because these individuals do not reside in Singapore and are usually here for leisure, work or family visits. Due to the current pandemic situation, there are even more restriction impose especially for visitors from countries that badly manages the pandemic situation such as some parts of India, United States and the Latin America region. Short term visit pass are often regarded as just a passer-by, meaning they do not have a permanent residence in Singapore.
That being said, there are some products that are still available that can be purchased by passer bys depending on the country and cities they originated from. E.g. if you are a short term visitor from a developed city you are able to purchase some life products e.g. Universal Life and Term insurance plans. Certain insurers also allow the purchase of participating policies such as endowment and whole life insurance if they come from non-restricted countries. However, there may be some discrimination imposed by insurers, such as, if the residency of the individual is from a certain countries or certain cities of a huge country, loading may be imposed on their premium even if the individual has a clean health.
There are also restrictions on the sum assured for this group of buyers, e.g. coverage for death, disability and critical illnesses will be limited on the total sum assured. Another requirement for this group is that they have to be in Singapore to purchase the life insurance. As such, such individuals may have to reside in Singapore for a few days to weeks to have their policies incept before they can travel back to their country. These individuals are also subjected to more scrutiny as their source of funds are not readily traceable in Singapore and thus more documented proof need to be shown during their application.
None of the CPF and SRS Eligible products are available to short term pass holders and most cash plans are also not eligible e.g. Investment linked policies and participating policies.
As above, we have identified the type of foreigners and what type of plans they can purchase in Singapore. We also know that the main limitation is not so much on the pass they hold but on the status of their residency in Singapore as well as their nationalities. Despite that, Singapore is still an attractive place for a foreigner to purchase life insurance plans because of its stable governance and its robust and highly developed financial system.
In this section we will identify the pros and cons for all foreigners if they are to purchase and hold a life insurance policy from Singapore.
We have concluded the pros and cons of foreigners with the intention to purchase life insurance in Singapore, however we would like to emphasize that as the world becomes more globalised, certain restriction may be lifted or further imposed. It is a great idea for any foreigners to purchase a life insurance plan especially when the financial system in your country is not as stable and robust to protect your family’s asset and wealth.
Let us know if you need any clarification by filling in the form below. We prefer communication via whatsapp over email, so please leave your international number with the necessary prefix e.g. +65 for our partnered licensed representative to contact you to answer your queries. Over the years Moneyline.SG we have helped many foreigners residing in Singapore and passer bys get their desired coverage and till date we have been receiving many referrals from these individuals.
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