Esteem Income II by Etiqa: A No-Medical Whole Life Income Plan

Esteem Income II is a single-premium whole life insurance plan offered by Etiqa Insurance Pte. Ltd., designed primarily to provide a steady stream of monthly income rather than just a lump-sum death benefit. As a participating policy, it combines guaranteed and non-guaranteed elements, with payouts starting from the 13th policy month until the insured reaches age 125. A key differentiator for this product is that it requires no underwriting or medical checks at the time of application, making it accessible to individuals who may have health concerns. The plan includes coverage for death and terminal illness (up to SGD 5 million), with the option to change the life insured after the second policy year. Premiums for this product range from $100,000 to $500,000, with an average premium of approximately $210,801 across recent quotes.

How it compares

When evaluating Esteem Income II against similar whole life income plans on a like-for-like basis (age 35, male, non-smoker, $100,000 sum assured), distinct trade-offs emerge regarding cost, liquidity, and returns.

Premium Structure and Cost Efficiency Esteem Income II requires a single upfront premium of $100,000. In contrast, Great Lifetime Payout 3 by Great Eastern also accepts a $100,000 premium but structures it over a payment term of 2 to 5 years, offering flexibility for those who prefer spreading costs. However, Great Eastern’s plan has a significantly higher Total Expense Ratio (TER) of 1.54% compared to Esteem Income II’s 2.25%. Manulife’s Signature Income (III) and Prudential’s PRUWealth Income also operate on a single-premium basis, aligning with Etiqa’s structure.

Surrender Value and Liquidity A critical comparison point is the guaranteed surrender value at year 20. Esteem Income II offers a guaranteed surrender value of $80,000 (80% of the premium). This matches the guaranteed surrender values of both Signature Income (III) and PRUWealth Income. However, it falls significantly short of Great Lifetime Payout 3, which provides a much higher year-20 surrender value of $300,000. For policyholders prioritizing early liquidity or capital preservation in the medium term, Great Eastern’s offering appears more robust based on these figures.

Returns and Performance Looking at net returns over a 5-year horizon, PRUWealth Income leads with a return of 2.23%, followed by Esteem Income II at -0.40%. The negative 5-year return for Esteem Income II reflects its long-term design; however, its 10-year projected return improves to 1.92%. Great Lifetime Payout 3 demonstrates strong performance with a 5-year net return of 2.39% and a 10-year return of 3.68%, outperforming all other peers in the provided data. It is important to note that Esteem Income II’s non-guaranteed elements are illustrated at 3.00% and 4.25% p.a., but past performance of its participating fund shows volatility, with a 5-year net investment return of -0.40%.

Pros

• No Medical Underwriting: The policy is issued without health declarations or medical checks, simplifying the application process for those with pre-existing conditions.
• Lifetime Income Stream: Provides monthly payouts from the 13th month until age 125, offering long-term cash flow certainty.
• Flexible Life Insured Change: Allows policy owners (non-corporate) to change the life insured up to three times, and corporate owners without limit, aiding in estate planning.
• Guaranteed Base: Offers a guaranteed surrender value of 80% of the premium throughout the policy duration.

Cons

• Lower Medium-Term Returns: The 5-year net return is negative (-0.40%), indicating that this product is not optimized for short-to-medium-term wealth accumulation compared to peers like Great Eastern or Prudential.
• Modest Surrender Value: The year-20 surrender value ($80,000) is significantly lower than Great Eastern’s equivalent offering ($300,000), limiting liquidity options in the early decades.
• Non-Guaranteed Income Volatility: A substantial portion of the monthly income is non-guaranteed and depends on the participating fund’s performance, which has shown negative returns in recent years (-1.44% over 3 years).
• Limited Payment Options: Does not allow SRS or CPFIS premium payments, restricting funding sources to cash only.

Who it may suit

Esteem Income II is best suited for individuals seeking a hassle-free entry into whole life insurance without undergoing medical underwriting. It appeals to those who prioritize a guaranteed lifetime income stream over high medium-term investment returns. The product is particularly relevant for older applicants or those with health issues who might be declined by traditional plans requiring medical exams. Given the lower surrender values in the early years, it is less suitable for individuals who may need to access their capital within the first 10–20 years. Instead, it fits long-term wealth preservation and income generation strategies for those comfortable with non-guaranteed bonus fluctuations.

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.