How Endowment Works in Singapore

At Fiscus Finance, learn about the basics of endowment plans and how they can benefit you. We help you make an informed decision for you and your family.

An endowment plan is a type of life insurance policy that combines protection and savings. It pays a lump sum to the policyholder or the beneficiary either at the end of a specified term or upon death, whichever is earlier.

The policyholder can also choose to receive regular payouts during the policy term. An endowment plan can help achieve long-term financial goals such as retirement, education, or marriage.

Key Features of an Endowment


Premium Payments

Policyholders pay regular premiums, either monthly, quarterly, or annually, throughout the policy’s term. These premiums are a combination of the cost of life insurance coverage and an investment component.


Fixed Policy Term

Endowment policies have a fixed policy term, such as 10, 15, 20, or 25 years. The policyholder pays regular premiums throughout the policy term.


Life Insurance Coverage

In the event of the policyholder’s death during the policy term, a death benefit is paid out to the beneficiaries. This provides financial protection to the family or dependents of the policyholder.


Guaranteed Returns

Many endowment policies in Singapore offer guaranteed returns on the savings or investment portion, making them a relatively low-risk savings option.


Non-Guaranteed Bonuses

Some endowment policies are participating policies, which means they offer additional non-guaranteed bonuses based on the insurance company’s performance and profits. These bonuses can increase the total payout.


Maturity Benefit

If the policyholder survives the entire policy term, a lump sum amount, known as the maturity benefit, is paid out to the policyholder. This amount typically includes the sum assured (the guaranteed amount) and any bonuses or returns generated from the investment component of the plan.

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What Can Endowments Be Used For?

Because an endowment provides you with access to its cash value, there are many ways you can utilize it to help it meet your unique needs.

Savings & Investments

Endowment plans are an effective way to save for long-term financial goals, such as retirement, buying a home, or funding your child’s education.

Retirement Planning

The lump sum received at the maturity of an endowment plan can be used to supplement your retirement income, helping you maintain your lifestyle after you stop working.

Major Purchases

You can use the endowment payout to make significant purchases like a car, a vacation, or home renovations. It can even be used for debt repayments.

Legacy Planning

Endowment plans provide a death benefit, which can offer financial protection to your family or beneficiaries in the event of your untimely death during the policy term.

Can an Endowment be Cancelled?

Yes, endowment plans can typically be canceled or surrendered before the end of the policy term, but there are some important considerations to keep in mind when doing so. Canceling an endowment plan is often referred to as policy surrender, and it’s important to understand the potential implications:

Surrender Value

When you cancel an endowment plan before the end of the policy term, you will receive a surrender value. The surrender value is the amount of money the insurance company will pay you, and it is typically lower than the total premiums you’ve paid into the policy. Insurance companies deduct charges, fees, and sometimes penalties when calculating the surrender value.

Surrender Charges

Many endowment policies come with surrender charges, which are fees deducted from the policy’s cash value when you surrender it prematurely. Surrender charges are highest in the early years of the policy and may decrease or disappear over time.

Loss of Benefits

Canceling an endowment plan means you will no longer be entitled to the policy’s benefits, such as the guaranteed and non-guaranteed maturity benefit or death benefit. You lose the insurance protection and the savings component of the plan.

Impact on Future Premiums

If you’ve taken a loan or an advance against the policy’s cash value, surrendering the policy may have tax implications, and it can affect the future premiums you owe on the policy.

Are Endowment Plans Worth It (Pros & Cons)


There are many benefits that an endowment plan can give. These can not only help you increase your financial stability but also give your family peace of mind.

Guaranteed Returns

Endowment plans often provide guaranteed returns on the savings or investment component, offering a degree of predictability and security.

Life Insurance Coverage

Endowment plans provide life insurance coverage, which can be valuable for protecting your family in the event of your untimely death.

Maturity Benefit

At the end of the policy term, you receive a lump sum, which can be used for various financial goals, such as education expenses, retirement, or major purchases.


While there are many benefits, to getting an endowment plan, there are some potential shortfalls that you need to be aware of.

Lower Returns

Endowment plans typically offer lower returns compared to more aggressive investment options, such as equities or other investment vehicles.

Limited Liquidity

These plans are designed for long-term savings and may have surrender charges or penalties if you cash out the policy prematurely. Your access to funds is limited during the policy term.

Inflation Risks

The guaranteed returns of endowment plans may not keep pace with inflation, potentially eroding the real value of your savings over time.


Endowments are a great way to not only build long-term wealth and increase your financial stability, but it is also a tool for legacy planning and making sure your family is well taken care of even in your absence.

If you are interested in speaking to a professional to learn more about endowments and how much they will cost, fill up the form here to get a detailed quote that is customized to your situation.

Frequently Asked Questions

How much endowment do I need?

Once you have decided that endowments are suitable for you. You can get a custom quote from our trusted providers who will advise you accordingly.

Are Endowments tax exempt?

No. Endowments do not qualify you for Life Insurance Relief with IRAS.

You can find out more from the link below.

IRAS | Life Insurance Relief


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