Knowing what type of insurance that is suitable for you is important. Equally important too is knowing the kind of premium an insurance might require to enjoy its benefits.
One type of coverage available in the market today is one that has a single-pay premium. The idea is pretty straightforward—instead of paying the insurance bill monthly or so, the whole thing is paid upfront.
This article is going to explore what this means, why it could be helpful, and how it can be an option for people wanting to get insured.
Table of Contents
Single pay premium
First things first, what is a premium?
A premium is money paid to a life insurance company in exchange for coverage against unexpected death and other specified risks. It is the cost of getting that protection.
The rate of the premium depends on a lot of things such as what is covered (some policies can have insurance riders and that can result to an increase in the premium) and your insurability. If there is a higher chance of an insured making a claim, then probably the cost will be higher. If the insured is seen as less risky, then the premium might be lower.
How is the premium paid?
It depends on the policy. The most common is the regular-pay premium. As the name suggests, the policy is paid in a regular basis like once every month, every three months, every six months, or every year.
And it has to be paid for as long as the policy requires it. A few may need to be paid for several years or up to a certain age of the policyholder.
On the other hand, an insurance that has a single premium means that it is paid one-time. That’s it. No amount due monthly, quarterly, semi-annually or yearly. It is paid lump-sum upfront. And that’s why it is also referred to as single pay life insurance.
A few life insurance plans can even be purchase online.
Benefits of a single-premium life insurance
What are the benefits of single premium life insurance?
- Single pay. It can be an option to individuals for coverage with single premium.
- Easy approval. Generally, application gets approved easily subject to terms and conditions.
- Insurance riders. Riders can be attached to the main policy to expand coverage.
- Bonus. For traditional plans, there may be cash bonus that the policy receives. This bonus may be guaranteed or not, and it might be derived from dividends issued to the policy, etc.
- Return premium. For traditional plans, the entire premium may be returned upon maturity.
- Top-ups. In the case of VUL policies, additional investment can be added as top-ups.
Disadvantages of single premium life insurance
What are the disadvantages of single premium life insurance?
- High initial cost. The plan requires a large amount of money to be paid all at once.
- Sum insured. Sum insured represents a little over the initial payment. Majority of the policies pay out 125% of the premium if the insured dies during coverage period. The payout is given to named beneficiaries of the policy.
- Opportunity cost. By putting all that money into this one insurance plan, there might be an opportunity cost when that same amount can be invested in ways where it could make more money.
- Charges. In the case of VULs, charges and fees may pile up that need to be covered by return of investment fund or top-ups to break even, increase the fund value and hence the sum insured, or maintain the policy.
- Inflation. The cash benefit or the return of investment may not keep up with the rising cost of goods, products, and services.
To help you compare single premium life insurance policies, what follows below is a list of life insurance plans with single-pay premium from insurers offering them. They are arranged alphabetically by the name of the insurer.
The list is strictly those products that are single-pay, so it does not include plans that can be paid one time but has an option to be paid through regular payment. It also does not include term insurance.
Also, these products fall in two groups: traditional and variable unit-linked policies (VUL).
Moreover, it is important to note that each policy has its own terms and conditions. It is beyond the scope of the article to cover them. The list is meant as a quick glance of insurance policies with single premium.
For more details of the policy mentioned, please ask the insurer and do due diligence.
Single-premium traditional life insurance plans
Single premium traditional life insurance plans give insurance within a certain length of time in exchange for a one-time payment. Some plans give guaranteed or non-guaranteed cash bonus, which might be dividends from company surplus for example, on policy anniversary until maturity.
Maturity of the plans range between four and ten years.
AIAPH Income Assure 10
Offered by AIA Philippines Life and General lnsurance Company, AIAPH Income Assure 10 is an endowment plan that has a coverage of ten years and a minimum premium of Php 250,000.
It provides 125% of the payment as death benefit. For example, an initial payment of P250,000 will have a death benefit of P325,000.
It also gives out 5% of the premium during policy anniversary every year and returns the entire premium at the end of ten years, provided that the insured is alive.
1st Dollar
Offered by First Life Financial, 1st Dollar provides coverage for up to ten years. Issue age is 0-55 years old. The policy earns dividends through accumulation of yearly company surplus. Additional benefit is received if death is due to accident.
Asset Protect
Asset Protect is offered by AXA Philippines. It provides a sum insured of 125% of single-pay premium and its coverage is seven years. It has guaranteed cash benefit of up to 4.25% per annum until maturity.
4 Star Plan
Offered by Philippines International Life Insurance Company, 4 Star Plan provides coverage for four years. Issue age is between 15 and 60 years old.
Sun Grepa Peso Asset Builder
Sun Grepa Peso Asset Builder, offered by Sun Life Grepa Financial, provides coverage for 7 years and sum insured is 125% of the one-time premium. It also gives fixed annual income payout for six years and the full single premium is returned at the end of the seven-year holding period. The plan invests in a “credit and equity-linked note issued by Nomura International Funding Pte. Ltd.”
Sun Wealth Prime 7
Offered by Sun Life Philippines, Sun Wealth Prime 7 provides coverage for seven years. Its sum insured is 110% of the one-time premium. It also gives annual cash payouts up to 4% and the premium is returned at the maturity of the policy.
Single premium VUL
VUL, which stands for variable unit-linked policy, is a type of life insurance plan where some of that premium goes into an investment fund.
So it is not just about getting life insurance coverage, it is also about investing some of the money for potential growth. It is like having two things in one: insurance coverage and a way to grow money over time.
Plans might be flexible too. You can choose, switch, or change allocation of the investment fund. Top-ups, that is additional money to be added to the investment fund, and withdrawal may be allowed too.
VUL plans often cover for a lifetime until 100 years old.
Death benefit may be the total sum insured or total value of the fund whichever is higher, and this is called level death benefit. Another variant is an increasing benefit where the payout is the combined total sum insured plus the total value of the fund. In either scenarios, charges and withdrawals are deducted from the payout.
The downside is that they can have many fees. Fees may be taken out for sales charge, the cost of the insurance, upkeep of the policy, management of the investment fund, fund’s operating expenses, surrender charges, withdrawal charges, bid-ask spread, etc.
There are two variants, one is for investment in peso currency and another in foreign currency (almost always in dollars).
| Single-premium VUL Policy | Details |
|---|---|
| AIA Dollar Money Funds | Coverage: 100 years old Currency: Dollar Insurer: AIA Philippines Life Sum insured: 125% |
| Money Tree | Coverage: 100 years old Insurer: AIA Philippines Life Issue age: 0-70 years old Riders: Term life insurance, accident protection, critical illness protection. Single premium: P125,000 Sum insured: 125% |
| Money Tree Elite | Coverage: 100 years old Insurer: AIA Philippines Life Issue age: 0-75 years old Riders: Term life insurance, accident protection, critical illness protection. Single premium: P1 million Sum insured: 125% |
| Maximal Power | Coverage: 100 years old Currency: Peso or dollar Death benefit: Level or increasing Insurer: Allianz PNB Life Issue age: 0-70 years old Loyalty bonus: Every after 5 years Riders: Accident death or dismemberment Single premium: P1 million pesos or $20,000. Sum insured: 130% |
| Optimal Power | Currency: Peso or dollar Death benefit: Level or increasing Insurer: Allianz PNB Life Issue age: 0-70 years old Loyalty bonus: Every after 5 years Riders: Accident death or dismemberment Single premium: P100,000 or $2,000. Sum insured: 125% |
| Wealth Secure | Coverage: 100 years old Currency: Peso or dollar Insurer: BDO Life Issue age: 0-70 years old Loyalty bonus: On 8th year policy and every 5 years thereafter, subject to qualifying conditions |
| Invest Dollar Max | Coverage: Whole life Currency: Dollar Insurer: BPI AIA Insurance Issue age: 0-75 old Riders: Term insurance, critical illness, accident and health coverage, medical reimbursement and weekly income benefit Sum insured: 125% |
| Invest Peso Max | Coverage: Whole life Currency: Peso Insurer: BPI AIA Insurance Issue age: 0-75 years old Riders: Term insurance, critical illness, accident and health coverage, medical reimbursement and weekly income benefit Sum insured: 1 25% |
| Preferred Life Plus | Coverage: 100 years old Insurer: BPI AIA Insurance Issue age: 0-75 years old Riders: Critical illness, accident and health coverage, medical reimbursement and weekly income benefit Sum insured: 160% |
| Boost Wealth | Coverage: 100 years old Insurer: EastWest Ageas Insurance Loyalty bonus: Start at the end of 5 years and every 3 years thereafter Sum insured: 125% |
| Dollar Edge | Coverage: 100 years old Currency: Dollar Insurer: EastWest Ageas Insurance Loyalty bonus: Start at the end of 5 years and the every 5 years thereafter Riders: Single premium: $5,000 Sum insured: 125% |
| Future Assure Max | Cover age: 100 years old Currency: Peso Insurer: EastWest Ageas Insurance Issue age: 18-90 years old Single premium: P150,000 Sum insured: 125% |
| Prosperity Plus | Currency: Peso Insurer: Etiqa Life and General Assurance Philippines Inc. Issue age: 0-80 years old |
| Prosperity Tiger | Currency: Dollar Insurer: Etiqa Life and General Assurance Philippines Inc. Issue age: 0-80 years old |
| 1st Investment Dollar Max | Coverage: 99 years old Currency: Dollar Insurer: First Life Financial Company Inc. Issue age: 0-70 years old Riders: Accidental death Single premium: $2,000 |
| 1st Investment Peso Max | Coverage: 99 years old Currency: Peso Insurer: First Life Financial Company Inc. Issue age: 0-70 years old Riders: Accidental death benefit Single premium: P100,000 |
| All Set / All Set Higher Investment-linked Insurance | Coverage: 100 years Currency: Peso or dollar Insurer: FWD Life Loyalty bonus: Starts at 10th year and every 5 thereafter Single premium: P100,000 or P1 million or $20,000 Sum insured: 125% |
| Dollar Solid Fund Builder | Currency: Dollar Insurer: Insular Life Riders: Accidental death and special accident Sum insured: 125% |
| Solid Fund Builder | Currency: Peso Insurer: Insular Life Riders: Accidental death and special accident Single premium: P100,000 Sum insured: 125% |
| WealthOne | Currency: Peso or dollar Insurer: Manulife Loyalty bonus: Guaranteed Start-up Bonus of up to 1.5% of single premium plus loyalty bonus, subject to terms Riders: Accidental death Sum insured: 500%, subject to terms |
| MCBL WealthOne | Currency: Peso or dollar Insurer: Manulife Loyalty bonus: Guaranteed Start-up Bonus of up to 1.5% of single premium plus loyalty bonus, subject to terms Riders: Accidental death Sum insured: 500%, subject to terms |
| Asset Master | Insurer: AXA Philippines Loyalty bonus: Up to 3% Single premium: P100,000 or $2,000 |
| Goal Getter | Currency: Peso (VUL) Insurer: AXA Philippines Issue age: 20-60 years old Single premium: P10,000 Sum insured: 125% |
| Elite | Insurer: Pioneer Life Issue age: 14 days to 75 years old Single premium: P500,000 Sum insured: 125% |
| Embrace | Currency: Peso or dollar Insurer: Pioneer Life Issue age: 14 days to 75 years old Riders: Accidental death, disability, dismemberment Single premium: P50,000 or $1,000 Sum insured: 125% |
| Sun Grepa Power Builder 1 | Coverage: 88 years old Insurer: Sun Life Grepa Sum insured: 125% |
| Sun Grepa Power Builder Dollar 1 | Coverage: 88 years old Currency: Dollar Insurer: Sun Life Grepa Loyalty bonus: Starts at the end of 10 years and every 5 years thereafter Sum insured: 125% |
| Sun FlexiDollar1 | Currency: Dollar Insurer: Sun Life Philippines Loyalty bonus: Starts at the end of 10 years |
| Sun MaxiLink One | Insurer: Sun Life Philippines Loyalty bonus: Starts at the end of 10 years |
| Sun MaxiLink Dollar One | Currency: Dollar Insurer: Sun Life Philippines Loyalty bonus: Starts at the end of 10 years |
| Money Accumulator Preferred Plus | Currency: Peso or dollar Death benefit: Increasing death benefit Insurer: Cocolife |
| Zenith | Currency: Dollar Insurer: Cocolife |
| Zenith Med | Coverage: 100 years old, access to accredited hospitals of Cocolife Healthcare Insurer: Cocolife Issue age: 1-70 years old Sum insured: 125% |