By MoneyBees
Compare buying term and investing the difference with a whole life policy, on premiums and cash values from your own policy illustrations. See what the invested difference could be worth and the return it needs to match the policy.
Total surrender value from the policy illustration. Pick the scenario you want to test.
After investment costs.
Invested difference at 65
$184,844
at 4% a year
Whole life cash value at 65
$160,000
from your illustration
Return needed to match
3.42%
term + invest ahead by $24,844
Over 35 years you would pay $90,000 in whole life premiums, or $21,000 in term premiums. Investing the difference each year at 4% grows to $184,844 by age 65.
The invested difference has to earn 3.42% a year, every year, to equal the $160,000 cash value. A whole life cash value with non-guaranteed bonuses can also come in lower or higher than illustrated.
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| Term | Whole life | |
|---|---|---|
| Cover | A fixed period | For life |
| Premium | Most affordable; revised on renewal | More than term; typically constant |
| Cash value | Typically none | Yes; for par policies, guaranteed plus non-guaranteed bonuses |
| Investment risk | None | You bear the risk on non-guaranteed bonuses |
| Stopping early | Cover ends | Early termination causes you to lose money |
At 30 you compare S$600 a year for term cover to 65 with S$3,600 a year for 25 years on whole life. Investing the S$3,000 difference at 4% a year, then paying the term premium from the pot after year 25, gives about S$184,844 at 65. If the illustration shows S$160,000 of cash value at 65, the invested difference needs about 3.42% a year to match it. These are example figures, not a real policy; use your own quotes.
Figures checked 3 Oct 2026.
Term is usually far cheaper for the same cover because it has no cash value. MoneySense describes term as the most affordable option and whole life as costing more, since part of the premium builds cash value.
You buy term cover and invest the premium you save compared with whole life, every year. The comparison is the invested pot against the whole life policy's cash value at the same age.
It depends on your quotes. This calculator finds the yearly return at which the invested difference equals the cash value you enter from the whole life illustration. A return above that favours term and invest, below it favours the policy.
In the policy illustration the insurer or adviser gives you. For a participating policy it shows cash values under different investment return scenarios; the non-guaranteed bonuses may turn out lower or higher.
You must invest the difference every year and leave it alone, the return is not guaranteed, and term cover ends at the end of the term. Renewal premiums can rise sharply with age.
It costs more than term for the same cover, part of the cash value may not be guaranteed, and MoneySense notes that ending the policy early causes you to lose money.
compareFIRST, a comparison site whose partners include the Life Insurance Association, MoneySense and CASE, lists premiums and benefits for term and whole life policies from many insurers. Enter the figures you find here.
MoneySense suggests deciding first whether you need cover for a fixed period, such as until your youngest child is self-reliant, or for life, and what premium you can afford. This page shows the money side only.
These calculators provide general estimates for educational purposes only and are not personalised financial advice. Results may rely on rates and rules that change over time, so verify against official sources (IRAS, CPF Board, HDB, MAS) or consult a licensed financial adviser before making decisions.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).