Understand an endowment or annuity before you read its numbers

An endowment plan is a life insurance policy that pays a lump sum at maturity, or on earlier death, rather than a bank deposit. MoneySense cautions that endowments are sometimes sold as if they were fixed deposits. The differences are structural: an endowment usually runs for a fixed term such as 10, 15 or 20 years, part of the payout in a participating plan is not guaranteed, and early termination may result in losses because the surrender value in the first years is often below premiums paid. A Singapore-dollar fixed deposit at a member bank is covered by deposit insurance up to S$100,000 per depositor per bank (SDIC); an endowment is instead covered by the Policy Owners' Protection (PPF) Scheme, only for guaranteed benefits and within caps. See How endowment plans work.

A participating (par) plan shares in the profits of the insurer's participating fund through bonuses; a non-participating (non-par) plan pays only the guaranteed amounts written into the contract. MoneySense describes par policies as policies that "participate or share in the profits" of the par fund, while non-par endowments offer "guaranteed maturity and cash values". The trade-off is that par plans have a guaranteed layer plus a non-guaranteed layer that depends on fund performance, expenses and claims experience, whereas non-par plans give certainty but no upside. According to LIA's 2025 full-year results (11 February 2026), par products made up 24% of weighted new business premiums and non-par products 32%.

No, bonuses are not guaranteed until they are declared, and future bonus rates can be cut. MoneySense states that "bonuses and cash dividends are non-guaranteed benefits until they have been declared". Once a reversionary bonus is declared and added to the policy, the LIA/MoneySENSE participating policy guide says the insurer "cannot subsequently reduce" it — but if you surrender, only a proportion of reversionary bonuses may be paid out. Terminal bonuses are only calculated on maturity, claim or surrender, so they remain at risk until then. Bonus declarations are approved by the insurer's board, taking the appointed actuary's advice into account, and are usually smoothed over time.

It usually means the guaranteed surrender value at a stated policy year — often at or near maturity — is not less than the total premiums paid, subject to the policy terms. Typical conditions include no alterations, no partial surrenders and no missed premiums. It does not mean every year is protected: surrendering before that stated year can still return less than you paid. It also does not make the plan a deposit. Under the PPF Scheme, the guaranteed part of the surrender value is covered within the caps, currently S$100,000 aggregated guaranteed surrender value per life assured per insurer (SDIC), while any non-guaranteed amount is not. Read the product summary for the exact year and conditions.

An annuity converts a premium into regular payments for a fixed period or for life; a retirement income plan is a marketing label for a policy that first accumulates value and then pays an income stream, often structured as a deferred annuity or an endowment with a payout phase. MoneySense defines an annuity as a policy that "typically guarantees fixed payments at regular intervals (usually monthly)". The practical questions are the same for both: when payouts start, how long they last, which part is guaranteed, what happens on death or surrender, and whether the policy has a loan facility. See Annuities in Singapore and Retirement income plans.