facebookWhat is a good insurance plan I can buy using srs funds? Eg. Whole life, disability, critical illness ? If I'm paying premium for the long haul I might as well get a tax deduction was my thinking. - Seedly

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Anonymous

02 Jan 2022

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Insurance

What is a good insurance plan I can buy using srs funds? Eg. Whole life, disability, critical illness ? If I'm paying premium for the long haul I might as well get a tax deduction was my thinking.

SRS and Insurance

Discussion (2)

What are your thoughts?

Elijah Lee

Elijah Lee

04 Jan 2022

Independent Financial Advisor at Phillip Securities (Jurong East)

Hi anon,

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SRS funds cannot be used to buy protection based products. If something happened, the payout would have to end up in the SRS account and this creates all kinds of issues when you want to take the money out to settle expenses.

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Thus, SRS is only available for endowment/investment and they are Single Premium policies only. Personally I would say that you can consider the endowment in this case.

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Generally for endowment, you can look at Whole of Life endowment, which will grow your funds till they are needed, and then you can perform partial surrender over your SRS withdrawal period. If you are more certain about the age that you will withdraw your SRS, a retirement income policy may be suitable as well as it will provide you with a defined stream of income when you retire. There are also single premium lifetime annuities that are available (although the premium required may be higher and thus may require a few years of SRS contributions first before you can buy)

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Please remember to take into consideration your entire portfolio for retirement when considering how to deploy your SRS monies, especially with respect to how it integrates with your other income sources in retirement such as CPF LIFE, or even rental income.

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There are quite a few insurers that offer SRS endowment plans, you can speak to an independent financial advisor to find out more about the various options.

JX

Jun Xi

03 Jan 2022

Financial Advisor at Great Eastern Life

Hi,

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SRS are meant to encourage individuals to save for retirement hence it can only be used to pay for endowment and investment policies. For protection based policy like whole life or CI plans, it is only payable by cash.

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If you are interested to find out more about the kind of endowment plans available, feel free to contact me (email at bio).

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Cheers.

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