Direct Purchase Insurance (DPI) Term Life Insurance

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Direct Purchase Insurance (DPI) Term Life Insurance

4.0

/5

Type

Term Life Insurance (Level premium)

Covers

Death, Total and Permanent Disability (TPD) and Terminal Illness (TI)

Optional add-on Riders

Critical Illness (CI)

Available Policy Term

5 years (renewable), 20 years or up to age 65 (max age)

Overview

Generally lower premium than personal plans as you buy directly from the insurer with no commissions paid to financial advisers/agents
Buy online conveniently for selected insurers (see list below)
Premiums are level during the policy term – they don’t increase with age within the selected coverage period (of either 5 years, 20 years or from now till age 65)

For Whom

Suitable For

Individuals who prefer to buy insurance directly and/or online without an adviser.

Not Suitable For

Individuals with higher protection needs above $400k payout, who are looking at plans with a savings or investment component, who require help from an adviser to make their decision, or who are retirees.

For What Purpose?

Income replacement for dependants or self in case of:

Death/TPD/TI

Death/TPD/TI:
Lump sum payout (sum assured of min. $50k/max $400k) will be paid out to your dependants to support their living expenses in case of your death/TPD/ TI.

Late-stage Critical Illness (rider):
Provides a lump sum accelerated payout of the sum assured upon diagnosis of a late-stage critical illness. An accelerated payout means no further payment will be made to your family in the event of death thereafter.

- This payout serves as income replacement during your recovery period, helping to cover living expenses while you're unable to work.

- It can also be used for alternative treatments not covered by your Integrated Shield Plan, such as cancer drugs not on the Cancer Drug List or Traditional Chinese Medicine.

- However, this rider does not cover hospitalisation expenses or early-stage critical illnesses

What are the Pros & Cons?

Pros

Offers good value-for-protection

Simple to apply, with some insurers offering the option to purchase directly online – no need to go through an adviser

Cons

DPI does not have an adviser linked to the policy for policy servicing and claims

Sum assured for the CI rider, if added, must be equivalent to your main plan’s basic sum assured.

For instance, if your policy has a basic sum assured of $300k, the CI coverage must be $300k as well. As a result, this will impact the overall premium you pay for the policy.

What's the Cost?

Premium example (from Etiqa DIRECT Term II, for non-smokers/ standard lives without premium loading)

Premiums for Death/TPD/TI

For S$300,000 sum assured, ages up to 65:

Age	Annual (Male)	Annual (Female)
30	$198	$168
35	$252	$207
40	$312	$261

Premiums with Critical Illness Rider Added

For S$300,000 sum assured with CI rider, ages up to 65:

Age	Annual (Male)	Annual (Female)
30	$597	$729
35	$765	$921
40	$987	$1,185

Things to Note

The late-stage CI rider covers only 30 CI conditions.
Late-stage CI benefits are paid out by accelerating your basic sum assured, which reduces the death benefit to $0 upon payout. Therefore, if you need higher coverage for Death, TPD or TI, it’s recommended to purchase a separate life insurance to increase your coverage your life coverage.

Written by: Anton Tan, CFP®

Last updated: 21 November, 2024

Disclaimer: This publication has not been reviewed by the Monetary Authority of Singapore. The information contained herein does not have any regard to the specific investment objective(s), financial situation or particular needs of any individual. Buying insurance is a long-term commitment and should be based on your unique needs and the suitability of the products. It is advisable to seek advice from a financial adviser to assess your needs and guide you on the features and details of the products before making any financial decisions. The coverage, benefits, premiums, and terms of insurance policies may vary depending on individual circumstances and insurance providers. Individuals are encouraged to review their own insurance needs and policies and seek advice tailored to their specific situation. While every reasonable care is taken to ensure the accuracy of the information provided, no responsibility can be accepted for any loss or inconvenience caused by any error or omission.

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