Savings accounts – how interesting can they get?
Well, things have gotten a little bit more interesting with a novel product from Singlife – the Singlife Account. It is a high-yield insurance savings account with no lock-in, no fees, and no regular top-ups needed. It also comes with optional features such as a zero-fee debit card (Singlife Debit Card), spend notifications and insurance benefits.
Think of the Singlife product as a cross between multiple products that are already existing in the market.
You get a high-yield savings account like Stanchart Jumpstart Account, plus a debit card which you can spend anywhere in the world like the GrabPay MasterCard, spend notifications like Revolut, then add an insurance plan on top of that – which is Singlife’s original objective of making insurance more transparent and accessible.
- A life insurance cover for death or terminal illness, up to 105% of your account value
- The account value earns interest
- An optional Singlife Visa Debit Card that allows you to spend at Visa merchants worldwide (not covered in this article)
- You get real-time access to all transactions made in your Singlife Account through the Singlife App
Let’s break it down slowly, shall we?
Singlife, or Singapore Life, is the latest fully licensed direct life insurer to be approved by the Monetary Authority of Singapore (MAS).
Its founder and CEO, Mr Walter de Oude, wanted to solve the problem facing the life insurance industry in Singapore, which had not kept pace with innovation seen in other industries.
It has raised more than US$173mn in funding over 5 rounds so far, courting investors like Sumitomo Life Insurance Company, Aberdeen Standard Investments, Aflac and IPGL.
It has since branched out towards financial management and planning and will launch its investment product Grow in the coming months.
Singlife Account – a flexible insurance savings plan
For starters, the Singlife account is branded as an insurance savings plan with no lock-in or fees. It’s rather simple to understand and use – and there’s no commitment to contribute with regular top-ups unlike what’s in the market.
You get life insurance coverage and retrenchment coverage as part of the insurance benefits they offer. The product summary is here.
On the interest side, it pays you an interest rate of 2.5% per annum for amounts up to S$10,000, upon initial funding of S$500. You would need to maintain at least S$100 in the account to earn interest.
For amounts above S$10,000, it pays 1% per annum up to S$100,000. Amounts above S$100,000 will not earn any returns.
The returns are calculated daily and credited to your account monthly on the first day of the following policy month.
It’s not like an ordinary high yield savings account
This is unlike a typical high yield savings account like CIMB FastSaver or Stanchart Jumpstart.
This is actually a non-participating yearly renewable universal life plan with cash value accumulation. It renews every year up till your 100th birthday.
Unlike other universal life plans in the market, the coverage is not guaranteed for life – they can elect to terminate the policy on any policy anniversary by giving you 90 days notice.
You can withdraw at anytime
However, you can choose to withdraw your savings at any time during the policy term, and the account value will be reduced by the amount that was withdrawn.
You can surrender at anytime
You can also choose to surrender the policy at any time. Your benefits will cease on the day the surrender benefit is paid.
Your S$500 initial deposit is sort of like an initial single premium payment
It’s a way to fund your policy by paying a single upfront premium, and top ups to the account are considered adhoc premium payments.
It’s more of like an insurance plan with a savings component
You know those typical savings plan that insurance agents like to sell? It’s something like that… and it comes with a life insurance policy.
With every life insurance policy, there’s a death benefit. If you die while the policy is in force, then Singlife will pay you a death benefit according to the table below –
It also pays you if you are diagnosed with a terminal illness, and they will pay the full death benefit as the terminal illness benefit.
Either way, upon death or terminal illness, once the benefit is paid out, the policy is terminated.
There are the typical exclusions for payouts, including attempted suicide within one year from the policy effective date, or any pre-existing conditions.
A deeper look into the account value
The balance you see in the Singlife account is known as the account value. It equals to the total premiums received less withdrawals.
You need to maintain a minimum account value of S$100 for your policy to remain in effect. That’s why it’s not like a typical bank account.
Interest will be tiered and paid based on the account value, and no interest will be paid on values below S$100 and above S$100,000.
Failure to maintain minimum account value
If you fail to maintain the minimum account value (S$100) for a continuous 60 days, then you will be given another 60 days to top up to the minimum account value, otherwise your policy might be terminated.
Reinstatement of policy upon termination
If you terminate the policy either by surrendering it or face termination after failing top-up to the minimum account value during the grace period, then you can apply to reinstate your policy – subject to reinstatement premium during the reinstatement offer period.
Because you’re only allowed one Singlife account per lifetime, any termination will result in a reinstatement should you choose to reapply.
Protection of account value
The policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC).
I believe that Singlife is a registered member of the Policy Owners’ Protection (PPF) scheme. Singlife customers are protected in the event that the business fails to carry out its operations.
According to the SDIC website, the PPF Scheme protects life insurance policies (including riders) issued by licensed life insurers which are PPF Scheme members. It is not the same as the deposit insurance scheme which protects deposits held in banks.
Singlife is a new player in the insuretech market giving flexibility back to consumers with their new Singlife account. They seem to be a credible company that’s still growing and testing the market with a suite of new products (e.g. investing) to follow.
Weighing the risks involved, I think it’s definitely worth a try.
- 2.5% p.a. is one of the highest rates in the market
- Flexible and no lock-ins
- Lightning fast deposits and withdrawals
- Life insurance policy thrown into the mix
- Buggy app interface and experience
- 2.5% p.a. on first $10K only feels like it's just a hook