With over 20 years of experience in the financial services industry, I’ve walked with countless clients through life’s financial milestones—from saving for a child’s education to planning a comfortable retirement.

Having graduated from NUS Business School and built a career anchored in trust, I’ve come to appreciate the quiet power of endowment plans as part of a robust financial strategy.

In this guide, I’ll share everything you need to know about endowment plans in Singapore—what they are, how they work, and whether they’re the right fit for your goals in 2025 and beyond.

Quick Takeaways

• Endowment plans are sophisticated financial instruments in Singapore that offer a disciplined way to save while providing life insurance coverage—ideal for long-term goals like education or retirement.
• They combine guaranteed and non-guaranteed returns, with the latter depending on the insurer’s investment performance.
• Various types exist, including short-term, education-focused, and retirement-oriented plans to suit different financial objectives.
• Compared to higher-risk investments, endowment plans offer capital preservation and predictable outcomes, though with moderate returns.
• Best suited for individuals who value steady growth, financial security, and a hands-off savings approach.

What Is an Endowment Plan?

An endowment plan is a life insurance product that combines protection and disciplined savings. It provides a lump sum payout after a fixed period or upon the policyholder’s death, whichever comes first. In short, it helps you grow your money while ensuring that your loved ones are protected.

Think of it as a structured savings plan with built-in life insurance coverage. Endowment insurance is particularly useful for Singaporeans who want to save steadily over time with a defined end goal—be it for a child’s tertiary education, a dream home, or retirement.

How Endowment Plans Work in Singapore

When you invest in an endowment policy, you commit to making premium payments throughout a predetermined period.

These premiums contribute to both a savings component and a life insurance component. During the policy term, your money grows through a combination of guaranteed returns and potential bonuses.

Some plans offer the flexibility of a single premium payment option, where you make one large upfront payment instead of regular premiums. This plan structure can be particularly attractive to the investors who have a lump sum available and want immediate coverage.

Upon policy maturity, you are entitled to receive a payout that may comprise:

• Guaranteed returns: The amount you are assured of receiving, often referred to as the sum assured
• Non-guaranteed bonuses: Additional payouts that depend on the performance of the participating fund managed by the insurer

Your endowment plan also builds cash value over time, which represents the accumulated savings component.

Some plans even allow for partial withdrawals or yearly cash payouts along the way, depending on the structure.

Understanding Surrender Value and Early Termination

In the event of early termination, you may receive the surrender value of your policy. However, this amount is often less than the total premiums you’ve paid, especially in the early years.

The surrender value will be calculated based on the cash value accumulated and may be significantly lower than the total premiums paid if you terminate within the first few years.

Types of Endowment Plans in Singapore

Benefits of an Endowment Plan

Risks and Considerations

• Disciplined Savings: Automates your savings habit over time and helps you stay committed to the long-term financial strategy
• Capital Protection: Many plans offer guaranteed capital upon maturity, with some providing 100 capital guaranteed assurance of your initial investment
• Life Insurance Coverage: Offers life cover as a safety net for your dependents, often providing coverage of up to several times your annual premium
• Total Permanent Disability Protection: Most policies include coverage for total permanent disability, providing financial security in the event of such unfortunate circumstances
• Predictable Outcomes: Unlike volatile investments, endowment plans provide clearer financial projections
• Customisable: Tailored to your life goals—whether short-term or long-term, these plans can be structured to meet diverse needs
• Tax Benefits: Depending on the structure, some endowment plans may offer tax advantages on top of the basic savings and insurance benefits

• Lower Returns: Compared to investments like stocks or unit trusts, the returns may be more modest
• Lock-in Period: Early surrender may lead to receiving less than the total amount you’ve invested, as the surrender value could be lower than the total premiums paid
• Inflation Risk: Long-term plans may not keep pace with inflation over time
• Non-Guaranteed Portion: Bonuses are dependent on insurer’s performance and market conditions
• Liquidity Constraints: Your endowment plan may have limited liquidity options during the policy term

Who Should Consider an Endowment Plan?

In my two decades of advising clients, I’ve recommended endowment plans to:

• Parents saving for their children’s education who want certainty of your future financial commitments
• Young professionals building their first savings pool with built-in protection
• Middle-aged individuals looking for safe diversification of your investment portfolio
• Pre-retirees seeking a secure, low-risk savings vehicle

An endowment plan that matches your risk tolerance and time horizon can help you achieve steady wealth accumulation while providing essential life coverage.

Regulatory Framework: Monetary Authority of Singapore

All endowment policies in Singapore are regulated by the Monetary Authority of Singapore (MAS), which ensures that insurers maintain adequate reserves and follow strict guidelines to protect policyholders. This regulatory oversight provides an additional layer of security for your investment.

The MAS requires insurers to provide clear disclosure about policy features, including the surrender value calculations, bonus distribution methods, and the guaranteed versus non-guaranteed components of returns.

How to Choose the Best Endowment Plan in Singapore (2025)

Ask yourself:

• What’s my savings goal and timeline?
• Do I need guaranteed returns or am I comfortable with participating in the insurer’s investment performance?
• Am I comfortable locking my money in for the entire policy term?
• Would a single premium payment work better for my financial situation?

When comparing plans, look out for:

• Guaranteed and non-guaranteed payouts
• Policy term and premium flexibility
• Cash value accumulation rates
• Credibility and performance of the insurer
• The surrender value schedule for early termination
• Coverage of up to what amount for life insurance

Best Endowment Plan Providers in Singapore (2025)

Disclaimer: Returns shown are non-guaranteed and based on illustrated rates. This is not financial advice. Always speak with a licensed advisor before making a decision.

Endowment Plans vs Other Financial Tools

Understanding Your Policy’s Cash Value

The cash value of your endowment plan grows over time and represents the savings component that you can access.

Unlike term insurance, where premiums are purely for coverage, endowment plans allow you to build equity that can be accessed through policy loans or partial withdrawals, depending on the plan structure.

This plan feature makes endowment policies particularly attractive for those who want both protection and savings in the form of a single financial product.

My Final Thoughts (Advisor’s Corner)

Endowment plans aren’t flashy. They don’t promise quick wins or dramatic gains. But in my years of helping families build and protect wealth, I’ve seen how these plans provide peace of mind, structure, and a clear path forward. When aligned with your financial goals, they become powerful tools in your financial journey.

Whether you’re considering a single premium investment or regular premium payments, the key is selecting an endowment plan that complements your overall financial strategy and strikes the right balance between growth and protection.

If you’d like to explore how an endowment plan can support your personal goals, feel free to reach out for a personalised consultation.

Frequently Asked Questions (FAQs)