Guide to Getting a Life Insurance Policy in Singapore

Last updated on March 6, 2026

To be honest, nobody enjoys thinking about life insurance. However, if you have people who depend on your income – a spouse, children, ageing parents – or debts from a business you own, you need to know how life insurance policies actually work. Life insurance is not just another box to tick. It determines your family’s financial future in a world of rising costs and uncertainty. This guide unpacks:

What is a Life Insurance Policy?

A life insurance policy is a contract between you and your insurer, that provides financial protection through a lump sum payment upon the occurrence of a specific event, such as death, terminal illness or total and permanent disability. This section outlines the common types of life insurance policies. Do note that the policy type affects ownership rights, options for nomination, the benefits and payout upon your death.

What are the types of life insurance policies?

Term life insurance. This provides coverage for a fixed period, such as 10 years, or up to a specific age, such as 65. It has no cash value. This means that you pay the premiums, and upon the occurrence of a covered event (for example, if you pass on), your beneficiaries receive the payout. If the covered event does not happen during the term, the policy expires with no payout. The premiums you pay are generally lower than other types of life insurance for the same level of protection, which is why term life insurance is more ideal for those seeking temporary protection, or young people who are fresh out of university and/or in their first jobs. In Singapore, term life insurance can be paid via your Central Provident Fund (CPF) under the Dependents’ Protection Scheme (DPS). You will need to be a Singapore Citizen or Permanent Resident between 21 and 65 years of age and have a valid CPF working contribution. It provides a payout of up to $70,000 (for those aged 59 and below) or $55,000 (for those aged 60 to 65) in the event of death, terminal illness, or total and permanent disability.

Whole life insurance. This offers lifelong coverage as long as the premiums are paid. A part of your premium goes into the death benefit, that is, the lump sum payout upon your death. A part goes into a savings component, accumulating cash value over time. You can earn interest or bonuses, and you do not have to pay taxes on the growth each year. You can pay more than the minimum premium to buy extra coverage, or let any dividends in the policy be added to the cash value. If you pay the premiums long enough, the total cash value (and death benefit) can grow to be more than the total premiums that you have paid. Some people thus view whole life insurance plans as part-investment, part-insurance. Such plans tend to be more expensive than term life insurance, and are more suitable for adults who have been working for a while.

Investment-linked policies (ILPs). Unlike a whole life plan, which is an insurance plan with a cash component, an ILP is an investment plan with insurance benefits. Your premiums go towards the purchase of units in investment funds. Some of these units are sold periodically to pay for the cost of your insurance, while the remaining value depends on market performance. As a result, your returns are not guaranteed, and cash value can go up or down. ILPs are more suitable for people who are comfortable with investment risk, while seeking some level of insurance protection.

Group insurance. This is often provided by employers. Unlike policies that you purchase for yourself, your employer is the policy owner for group insurance. Your employer decides the terms of coverage, including the sum assured, riders and the beneficiaries you can nominate to receive the payout in the event of your death. Many Singaporeans may not have purchased additional life insurance coverage, as their companies already provide group insurance. However, everyone’s lifestyle and health needs vary, and you should carefully look through your company’s group insurance plan for any gaps in coverage. Furthermore, do note that your insurance coverage ceases once you leave the company.

Who is eligible to take up a life insurance policy?

Eligibility generally depends on your age and health.

Typically, you need to be within the insurer’s entry age. For many policies, the minimum entry age is 18, while the maximum entry age may be 45 or 65, depending on the type of policy purchased.

You must also meet the insurer’s health and underwriting requirements. You usually have to complete a questionnaire about your lifestyle (such as whether you smoke or work in a hazardous job), as well as past and current medical conditions, including past hospitalisations and medications. Some insurers provide insurance plans that cover you even if you have pre-existing medical conditions. However, the insurer may charge you higher premiums. At the same time, insurers may also exclude specific medical condition(s) from their plans, and this means you will not receive any benefits for those medical condition(s). Ultimately, it is important that you provide all requested information accurately. If not, the policy may be voided if there are errors or undisclosed medical conditions discovered later on.

There is usually no strict income eligibility requirement for life insurance policies. Nevertheless, insurers may look at your income to decide the policy that would be suitable for you, and how large a sum assured is reasonable. According to the Life Insurance Association of Singapore, you should have a coverage of 9 times your annual income for death and total permanent disability, and 4 times your annual income for terminal illnesses.

When Might You Need a Life Insurance Policy?

Life insurance becomes important when others depend on your income – whether that is a spouse, children or elderly parents who will need financial protection in the event that you pass on. There are a few common scenarios where life insurance policies are necessary:

Young families. Consider applying for a life insurance policy to cover the costs of raising your children and providing for your spouse.
Homeowners. If you are a homeowner, you may want a life insurance policy to ensure that any outstanding mortgages are paid off.
Business owners. If you co-own a business together with a partner, you may want to ensure that your business partner can use the insurance proceeds to buy out your shares, if you were to pass on.
Supporting elderly parents. If you have elderly parents who have retired, you may want to ensure they can continue receiving some allowance or support for their care, especially if there are no other children or assets.

Even if not legally required, life insurance will significantly affect estate planning and inheritance outcomes. Payouts could bypass your estate or be distributed under your will (or the Intestate Succession Act if there is no will). You could ensure that your children receive a fair inheritance without having to sell off any assets, such as their family home.

What are the Key Legal Considerations to Keep in Mind Before Purchasing a Life Insurance Policy?

Under the Insurance Act, policyholders can nominate who should receive their death benefits. This is done using forms filed with the insurer. Depending on the type of nomination, there will be different legal outcomes.

What are the different types of nominations?

Trust (Irrevocable) Nomination (Section 49L). When you make a trust nomination under this section, you lose all rights to the benefits of the policy. The policy money immediately belongs to your beneficiaries. You must name a trustee (at least 18 years old) to ensure the beneficiaries’ interests are protected. Your nominees can only be your spouse and/or children. Once nominated, your nominees gain immediate legal rights to all of the policy benefits, and you cannot revoke the nomination without their written consent (or their guardians’, if they are minors). Upon your death, the payout goes directly to the nominees. You can make a trust nomination under this section if you are absolutely certain that you want the proceeds to go to your immediate family.

Revocable Nomination (Section 49M). Under Section 49M, you retain full rights to the benefits of the policy. You continue to own the policy, and can change or revoke a nomination at any time, without the need for your beneficiaries’ consent. There is also more flexibility, compared to Section 49L, as you can name any person or organisation (not limited to your spouse and/or children). Only the death benefit is paid to surviving nominees upon your death, whereas the living benefits are payable to you as the policy owner. The living benefits include the cash value (i.e. accumulation of premiums and the interest accrued) or surrender value (if you gave up the policy early), which are payable to you in your lifetime.

If there is no surviving beneficiary, the revocable nomination is deemed revoked and proceeds fall into your estate. You can make a trust nomination under this section if you want to make more adjustments as life circumstances evolve.

When you are making a nomination, it is critical that you:

Fill in the nomination forms correctly and in full. Make sure that you do not leave any required fields blank. The forms need to be signed by the policy owner in front of two independent witnesses, who would also need to sign the forms afterwards. These witnesses must be at least 21 years old and cannot be the nominee or the spouse of the nominee. If you need to amend any information in the forms, you will need to complete an entirely new form.
Are clear on whether you are making a revocable or irrevocable trust nomination. Many do not realise they have made a trust nomination that cannot be revoked or changed at any time. As mentioned above, if you make a nomination under Section 49L, you cannot change your beneficiaries.

If there is no nomination, the proceeds fall into your estate. This means that they will be distributed under intestate succession laws if you pass on without a will, or according to a will if you have one. However, to execute your will, the executor will have to make an application to the court for a grant of probate, which is a court order empowering the executor (and trustees) to distribute the deceased’s assets to beneficiaries. This process could take months before your beneficiaries actually receive the insurance money.

Insurable interest requirement

There must be an insurable interest at the time when the policy is purchased, not at the time of death or the covered event occurring. This means that someone can only buy a policy on someone else’s life if they would suffer a genuine financial loss if that person dies. For example, you are presumed to have an insurable interest in your own life, your spouse’s and your child’s (if they are under 18) as the family is presumed to depend on each other for income and support. For a key business partner, you may take out a life insurance policy on them if their death would hurt the company or your share value.

If there is no insurable interest, the policy is considered void. You will not be able to get your premiums back and the beneficiaries will not receive any payouts.

Interaction with will and estate planning

A common misconception is that once you have a will, it will supersede everything. Note that irrevocable trust nominations always supersede your will. For example, if your will indicates that you intend to transfer all of your assets to your wife, but you have made an irrevocable trust nomination under Section 49L indicating your children – the insurance company must pay your children.

On the other hand, revocable nominations under Section 49M can create more cause for contention. An earlier revocable nomination can be treated as cancelled if, after making it, you sign a valid will that clearly addresses all of the death benefits under that policy, clearly lists each alternative beneficiary and their full details, and clearly states what share of the death benefits each beneficiary is to receive. However, if there is any lack of clarity in the language of the will, the misalignment of the documents is the perfect recipe for a family dispute and potentially costly litigation. You should carefully and routinely review both your insurance nominations and your will to ensure consistency, especially after major changes to life circumstances (such as marriage, birth of your children, asset changes).

CPF-related life insurance policies

As mentioned earlier in this article, Singapore Citizens or Permanent Residents are covered under the Dependents’ Protection Scheme (DPS), an optional life insurance scheme offered by the CPF, with separate nomination rules. Be aware that a CPF nomination only decides how your CPF savings are shared when you die; it does not automatically determine who receives the insurance benefits from the DPS. The DPS insurance nomination is a separate one. Do take note of the following legal implications:

You can only make a revocable nomination for DPS. With a trust nomination, you lose ownership of the policy. As CPF monies fund DPS, you must retain control over your retirement funds during your lifetime.
If you nominated someone, such as your spouse, for your CPF savings, your spouse may not automatically receive the insurance payout if you failed to make a revocable nomination. Complete the DPS nomination form and submit it via email or post to Great Eastern Life, which administers the DPS.
Unlike CPF savings, your will can also cover DPS proceeds. The beneficiary, according to either the nomination or will, will receive the benefits.
If you did not nominate any beneficiaries or indicate any beneficiaries in your will, the payouts may be made to any “proper claimants” under the Insurance Act (Section 150), i.e., your spouse, children, siblings, or parents, or executor of your estate.

Do note that if you had previously made a DPS nomination under NTUC Income (before 31 March 2021), this nomination is no longer valid. You are required to make a new nomination under the new insurer, Great Eastern Life.

Tax and creditor protection considerations

Good news: life insurance proceeds are not subject to estate duty or income taxes in Singapore. This means your beneficiaries gain the full death benefit, and it is not reduced by estate duty. You will also not need to pay taxes on any insurance monies you receive while alive, such as income payouts.

Creditors, on the other hand, are a different story. If you have made a valid trust nomination under Section 49L of the Insurance Act, the benefits are protected from your personal creditors, so your nominees can still receive the full insurance payout even if you have unpaid debts at the point of your passing. Where the policy proceeds fall into your estate in the event of no nomination or if a revocable nomination lapses, the money may be claimed by your creditors to pay estate debts before any balance is distributed to your beneficiaries. For example, suppose you own a business, and you are $500,000 in debt. You have a $800,000 life insurance policy with a trust nomination for your spouse and children. Should you pass away unexpectedly, $500,000 goes directly to your family, and the creditors cannot touch it. Without a trust nomination, the proceeds go to your estate, and creditors can make a claim. For business owners with large liabilities, trust nominations are the way to go as they ensure asset protection.

Ownership of the policy

Most of the time, when you buy a life insurance policy on yourself, you are the owner. However, you could structure it differently:

Third-party ownership: A wife could buy a policy on her life, but make her husband the owner. He now controls the nominations, can change coverage, or even surrender the policy. This may be useful for forward planning, as it gives the husband the ability to maintain premiums, and manage how the proceeds flow to their dependents, should his wife become mentally incapacitated subsequently. This avoids delays or court processes (such as applying for deputy ship) to manage the insurance policy. However, this plan is risky, especially if the marital relationship is not stable or breaks down, as the wife essentially loses control of the policy, even though it is her life that is being insured.
Joint ownership: In this case, spouses or business partners co-own a policy. This means that both parties must agree to all decisions regarding the policy, including beneficiaries and the sum assured. If one of the joint owners passes away, ownership is transferred to the remaining owner. The proceeds will be paid according to the remaining owner’s instructions.

Common Legal Pitfalls of Life Insurance Policies

Let’s look at some of the common issues that can trip people up when it comes to life insurance policies:

Disputes as to who should be the beneficiaries. If you did not complete a nomination, and the insurance proceeds fall into the estate, executors must distribute the money according to the will or, in the absence of a will, intestacy laws. In some cases, family members may have simply expected the insurance money based on their relationship with the deceased. Sometimes, the deceased could have verbally made promises to a family member just months before their demise, even though it contradicts what is indicated in the will. This can create conflict amongst family members and beneficiaries.
Disputes between nominees. Even if there were nominations, there can still be disputes between the nominees. This occurs if you were unclear, or filled in the nomination form incompletely. For example, you failed to specify the percentages of the benefits to be split among the nominees.
Invalid nominations due to procedural issues. This can happen due to missing signatures on the forms, the lack of proper witnesses, percentages of benefits to be split up not adding up to 100%, or attempting to make an irrevocable nomination in favour of someone who is not your spouse or child. As mentioned above, revocable nominations allow you to name any person or organisation (not restricted to your spouse or child), whereas irrevocable nominations are restricted to your spouse or child.
Non-disclosure and misrepresentation of information in nomination form. If you fail to disclose key medical conditions such as a serious pre-existing illness or high-risk occupations, or that you are concurrently applying for a life insurance policy with another insurance company, non-disclosure could make you liable for fraud. The insurer may also use this as a reason for denying your claims and refusing payouts.
Failing to update your nominations. For example, if you have gone through a divorce, your ex-spouse can remain the owner of your policy long after a split if you have failed to review or update your policy. Also, if you updated your will, do make sure that you also review your life insurance policy nomination for consistency.

What are Some Practical Steps Before Buying or When Reviewing a Life Insurance Policy?

So, what are some concrete steps you can take before signing up for a life insurance policy?

Clarify what you need. Work out who your dependents are, how much support they would need, and what significant liabilities do you have (e.g. debts and/or a business) that you want covered. This helps you decide what kind of life insurance policy you should sign up for.
Discuss ownership and nomination options with your insurer. Think about what kind of ownership structure you want – is it joint ownership or do you want to transfer ownership to someone else, such as your spouse? Consider whose life will be insured, as well as the types of nomination (trust versus revocable) that are available.
Complete the nomination process properly. Use the insurer’s prescribed forms, ensure full and accurate details of nominees and be absolutely clear on how you want to apportion the benefits/payouts. Have two independent and eligible witnesses sign at the same time as you. Keep records of this entire process, and a copy of the nomination form. Seek confirmation from the insurer that the nomination process has been completed properly.
Align your nominations with your will and CPF planning. Review your will, CPF nomination, DPS nomination and other insurance nominations together. If you update any one of these documents, consider whether any updates are needed for the other documents, so that your overall estate plan is coherent. Set a calendar reminder to review your documents regularly to ensure all details remain updated. This provides clarity, and avoids room for potential disputes.
Consider trust nominations for creditor protection and dependents’ security. Trust nominations are advantageous if you run a business with financial liabilities, you want to ensure that proceeds go directly to your beneficiaries, and you need protection from creditors.
Disclosure all material facts honestly. Pull up all of your medical records. Make sure that when you apply for a life insurance policy, you are upfront about every medical condition, past and present, all of the medications you have taken and are taking, your family medical history, other insurance policies you are applying for, or if you are in a hazardous occupation. If you do not fully disclose the facts, you may receive nothing from the policy.

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Life insurance is not just a financial decision – it has long-term legal implications for you and your family. The type of life insurance you apply for, the type of nomination, the disclosures you make and the alignment with your estate plan can mean the difference between drawn-out legal disputes within your family and easy payouts.

To summarise,

If you are starting a family, your first job, or have just bought a new home, consider applying for a life insurance policy.
There are various types of life insurance. Group insurance may not be enough – and you are not the policy owner.
When you apply for a life insurance policy:
- Remember to nominate your beneficiaries. Trust nominations offer creditor protection and immediate payouts to your family, but are irrevocable. Revocable nominations give you the flexibility to adjust your list of beneficiaries at any time.
- Disclose all material facts. Do not attempt to hide medical conditions, other concurrent insurance applications or risky occupations.
Take concrete steps to regularly review your will, insurance nominations and CPF nominations. Trust nominations supersede your will. Revocable nominations should be updated together with your will, especially after major life events.
CPF nominations are not the same as DPS nominations, even though the DPS draws from your CPF monies. If you are enrolled in DPS, make a specific DPS nomination.
Consider policy ownership. The policy owner controls the nominations and beneficiary changes. If you buy a policy on your own life, but make your spouse the owner, you have no control, even though your life is insured. Talk through ownership structures with your spouse and make an informed decision.

If you want to ensure your life insurance policy is legally sound and aligned with your overall estate plan, consider speaking with a wills and estates lawyer in Singapore. Your lawyer can review your policies, nominations and will, together to help you avoid the kind of disputes that may surface only later.

For assistance on choosing the right life insurance policy, riders or coverage levels, approach financial advisers and insurers in Singapore, who can explain the current offerings and underwriting requirements.

Take the time to get it right. Don’t buy life insurance without understanding the legal framework!