Esteem Eternity II by Etiqa: A No-Medical Whole Life Option

Esteem Eternity II is a single-premium whole life participating plan from Etiqa Insurance Pte. Ltd., designed primarily for individuals seeking lifetime income without undergoing medical underwriting. As a "guaranteed issuance" policy, it does not require health declarations or medical checks at the time of application, making it accessible to those who may have difficulty obtaining standard coverage. The product provides a guaranteed surrender value of 80% of the single premium paid from day one, alongside lifetime monthly income payouts starting from the second policy anniversary. These payouts consist of both guaranteed and non-guaranteed components, with the latter dependent on the performance of Etiqa’s Participating fund. The plan also allows for cash coupons and protects policyholders under the Policy Owners’ Protection Scheme administered by SDIC.

How it compares

When evaluated against similar single-premium whole life plans for a 35-year-old male non-smoker with a $100,000 premium input, Esteem Eternity II presents distinct trade-offs regarding liquidity, returns, and cost efficiency.

Premium and Structure: Like Signature Income (III) SGD and PRUWealth Income, Esteem Eternity II requires a single lump-sum premium of $100,000. In contrast, GREAT Lifetime Payout 3 allows for flexible premium terms ranging from 2 to 5 years.

Surrender Value at Year 20: A key differentiator is the guaranteed surrender value. Esteem Eternity II offers a fixed guaranteed surrender value of $80,000 (80% of premium) throughout the policy duration. This matches the illustrated surrender values for Signature Income (III) SGD and PRUWealth Income at year 20. However, GREAT Lifetime Payout 3 significantly outperforms in this metric, offering a projected surrender value of $300,000 per $100,000 premium, reflecting its longer premium-paying term and different benefit structure.

Net Returns (5-Year Average): Comparing the Participating fund’s historical performance is critical for non-guaranteed benefits. GREAT Lifetime Payout 3 shows a strong 5-year net return of 2.39%, followed by PRUWealth Income at 2.23%. Esteem Eternity II, however, reports a negative 5-year average net return of -0.40%. This indicates that recent fund performance has been weaker than its peers over this specific timeframe.

Total Expense Ratio (TER): Cost efficiency varies across products. GREAT Lifetime Payout 3 has the lowest TER at 1.54% for the last 5 years, followed closely by Esteem Eternity II at 2.25%. Signature Income (III) SGD has a higher TER of 2.64%, while PRUWealth Income sits slightly below Etiqa’s product at 2.27%.

Illustrated Returns: At the illustrated investment rate of 3.00% p.a., Esteem Eternity II shows a 5-year net return of -0.40% and a 10-year average of 1.92%. For context, PRUWealth Income illustrates higher returns at 2.23% (5y) and 3.95% (10y), while GREAT Lifetime Payout 3 illustrates 2.39% (5y) and 3.68% (10y).

Pros

• No Medical Underwriting: The "guaranteed issuance" feature allows enrollment without health checks, ideal for those with pre-existing conditions or age-related underwriting challenges.
• Guaranteed Liquidity Floor: Provides a fixed guaranteed surrender value of 80% of the premium from day one, offering a baseline level of capital protection regardless of fund performance.
• Lifetime Income Stream: Offers predictable monthly income starting from year 2, with the option to withdraw deposited funds at any time (subject to minimums).
• Strong Insurer Rating: Backed by Etiqa Insurance Pte. Ltd., which holds an A credit rating from Fitch.

Cons

• Recent Fund Performance: The Participating fund’s 5-year net investment return is negative (-0.40%), lagging behind peers like GREAT Lifetime Payout 3 (2.39%) and PRUWealth Income (2.23%).
• Lower Guaranteed Surrender Value: Compared to GREAT Lifetime Payout 3, which illustrates a $300,000 surrender value for a similar premium base, Esteem Eternity II’s guaranteed portion is capped at $80,000.
• Non-Guaranteed Income Reliance: A significant portion of the monthly income (e.g., 1.45% to 2.90% of premium) is non-guaranteed and subject to fund performance and expense ratios.
• No SRS/CPFIS Payment: Does not allow payment via Supplementary Retirement Scheme (SRS) or CPF Investment-Scheme, limiting tax-deferred or CPF-funded options for some consumers.

Who it may suit

Esteem Eternity II is best suited for individuals who prioritize guaranteed accessibility and lifetime income stability over high potential returns. It is particularly appropriate for:

1. Applicants with Health Concerns: Those who cannot pass standard medical underwriting due to age or health history.
2. Income-Focused Retirees: Individuals seeking a steady, lifelong cash flow stream rather than capital appreciation.
3. Risk-Averse Investors: Those who prefer the certainty of an 80% guaranteed surrender value over higher-risk, higher-reward participating plans with lower guaranteed floors.

This is general information based on CompareFIRST.sg data, not financial advice. Premiums and features can change; please verify with the insurer or a MAS-licensed financial adviser before making any decision.