BCP Life Insurance Products — Questions and Answers
Question 1: What is a 'whole life' insurance policy commonly sold in Singapore?
- A policy that covers the insured for a specific term only
- A policy that provides coverage for the insured's entire lifetime with a savings component (Correct answer)
- A policy that covers only accidental death
- A policy that covers only hospital expenses
Correct answer: A policy that provides coverage for the insured's entire lifetime with a savings component
Whole life insurance provides lifelong coverage and typically includes a cash value component that accumulates over time, making it both a protection and savings instrument.
Question 2: What is the key difference between a 'participating' and 'non-participating' life insurance policy in Singapore?
- Participating policies require medical exams; non-participating do not
- Participating policies share in the insurer's surplus/profits; non-participating do not (Correct answer)
- Non-participating policies have higher premiums
- There is no difference under MAS regulations
Correct answer: Participating policies share in the insurer's surplus/profits; non-participating do not
Participating policies entitle the policyholder to receive bonuses from the insurer's participating fund surplus. Non-participating policies offer guaranteed benefits only.
Question 3: What is the purpose of DependentsProtection Scheme (DPS) in Singapore?
- To provide investment returns for retirees
- To provide affordable term life insurance coverage for CPF members (Correct answer)
- To cover hospital surgical expenses
- To provide unemployment benefits
Correct answer: To provide affordable term life insurance coverage for CPF members
The DPS is a term life insurance scheme that provides basic coverage of $70,000 for CPF members aged 21-60, ensuring dependents receive a payout if the member passes away or becomes permanently incapacitated.
Question 4: What type of life insurance policy pays a benefit only if the insured dies within a specified period?
- Endowment policy
- Whole life policy
- Term life policy (Correct answer)
- Annuity
Correct answer: Term life policy
Term life insurance provides coverage for a specified period (e.g., 10, 20, or 30 years). If the insured survives the term, no benefit is paid and the policy expires.
Question 5: What is an endowment policy in the Singapore insurance market?
- A pure protection plan with no savings element
- A plan that combines insurance protection with a savings or investment component, maturing after a set period (Correct answer)
- A plan that only covers critical illness
- A plan exclusively for education funding
Correct answer: A plan that combines insurance protection with a savings or investment component, maturing after a set period
Endowment policies provide a lump sum on maturity or death, whichever occurs first. They are popular in Singapore for medium-term savings goals like education or retirement.
Question 6: Under MAS Notice 307, what must Singapore insurers disclose in the Benefit Illustration (BI) for life insurance products?
- Only the premium amount
- Projected returns at two different investment rate scenarios (lower and higher) (Correct answer)
- Only the death benefit
- Only the surrender value at maturity
Correct answer: Projected returns at two different investment rate scenarios (lower and higher)
MAS Notice 307 requires insurers to provide Benefit Illustrations showing projected policy values at two scenarios: a lower (e.g., 3.25%) and higher (e.g., 4.75%) investment return rate.
BCP Life Insurance Products
What is a 'whole life' insurance policy commonly sold in Singapore?