Term Life Insurance: What is the Limited Pay Option & Who Can Benefit?

HSBC Term Protect Advantage - Term Life Insurance - Limited Pay Option Benefits

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We all know that life insurance is one of those necessary #adulting things that we should get — it protects not just ourselves but our loved ones as well, should anything unfortunate happen to us. 

Especially during a time of uncertainty, such as the Covid-19 pandemic, having a policy that stands firm is indeed reassuring.

When it comes to life insurance, the most common types are term life insurance and whole life insurance. Both types have their own pros and cons, depending on your need. A big difference is that you pay much cheaper premiums for a term life insurance vs whole life. With term life, there’s no surrender value if you don’t make a claim before it terminates; whereas for whole life, there’s a chance you can get back some monetary value when you surrender the policy.

Now, here is a unique term life insurance — HSBC Life’s Term Protect Advantage, that is unlike the typical term insurance as described above.

HSBC Life’s Term Protect Advantage has these top benefits. 

  • Affordable premiums
  • Guaranteed Insurability options (allows you to increase coverage without medical underwriting)
  • Limited Pay Option
  • Surrender value* when you no longer need the coverage (you can surrender your policy and receive the guaranteed surrender value of your policy. Only from the third policy year onwards)

*Provided if you choose limited pay option only.

What is the limited pay option and why should you consider it?


In a limited pay option, premium paying term is shorter than the policy term. i.e. You take out a 25-years term life policy with the limited pay option; you stop paying premiums after 10 years, but you continue to be covered for 15 years more.

Sounds good? Let’s take a look at the benefits when considering a limited pay term insurance:

1. Premiums don’t increase with age/healthcare costs

The premiums for some insurance policies can get more expensive as you get older. With a term life insurance, however, you don’t have to worry about the price getting more expensive each year. Also, you may have noticed insurance costs increasing due to increasing healthcare costs. A limited pay term life insurance helps with that.

2. Pay off premiums earlier based on your choice

With a limited payment option, you only need to pay premiums for a fixed number of years even if the policy term is longer. This means that you can pay off your premiums during your working years when you still have income coming in, and don’t have to worry about paying them when you retire. That’s one less debt to bother with down the road! 

3. Allows you to be covered for longer period

When you know that you don’t have to pay the premiums after retirement, you can choose term plans with longer policy terms, which continue even after you retire. Once the premiums are fully paid, you will enjoy uninterrupted coverage under the plan without the risk of it lapsing.

4. Surrender value

The truly unique benefit of HSBC Life’s Term Protect Advantage is its surrender value when you choose the limited pay option. Most term life policies don’t have a surrender value when the policy is surrendered for whatever reason. Check out the surrender values in this chart:

HSBC Term Protect Advantage - Term Life Insurance - Limited Pay Option Benefits
The above chart is for illustration purposes only. It is based on male, age 35, non-smoker, policy term – 40 years and premium term – 30 years.

More about HSBC Life’s Term Protect Advantage

Now that you’re more familiar with term life insurance and the limited pay option, here are some key features of HSBC Life’s Term Protect Advantage plan:

  • Affordable; also protects you against death and terminal illness 
  • Flexible premium and policy term — choose how long you want your coverage to be and how long you want to pay for it 
  • Guaranteed Insurability Option — lets you enhance your coverage at key stages of your life
  • Convertibility benefit — flexibility to switch to a whole life or endowment plan without medical underwriting
  • Unemployment support benefit — if you find yourself out of a job, you can opt to pay your premium at a later date up to a year
  • Guaranteed surrender value (unique to HSBC Life’s Term Protect Advantage) — when you no longer need the coverage, you can surrender your policy and receive the guaranteed surrender value of your policy (only available for the limited pay option)

Who can benefit from HSBC Life’s Term Protect Advantage?

I know what you’re thinking: This all sounds good so far, but how would this apply to me? With this in mind, here are some scenarios to consider:

You find yourself at a new stage of life (marriage, new baby, new house)

It’s a new stage of your life and you want to make sure you’re sufficiently protected. The plan’s Guaranteed Insurability Option allows you to increase coverage without medical underwriting when you hit new milestones of your life. 

You lost your job

There’s the Unemployment Support Benefit of the plan which allows you to defer your premium payment for up to 365 days. 

You fell ill or got into an accident

The plan offers these optional riders — Disability Cover, Advanced Critical Illness (CI) Waiver, Advanced CI Cover.

HSBC Life’s Term Protect Advantage’s limited premium payment feature allows you to complete your premium commitments earlier, so you will not be affected if there’s an increase in the riders’ premium (only for CI) at a later stage. 

You’re reaching retirement (and financial freedom)

As you get closer to financial freedom, you want to think about leaving a legacy for your family. If, touch wood, you pass on before the plan ends, your family still gets the death benefit. Alternatively, why not convert the term life plan into whole life or endowment without any medical underwriting.

Click here to find out more about Term Protect Advantage plan or make an appointment with one of the authorised distributors today. 

Term Protect Advantage is underwritten by HSBC Insurance (Singapore) Pte. Limited (Reg. No.195400150N). 

This article contains only general information and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person. This is not a contract of insurance and is not intended as an offer or recommendation to buy the product. A copy of the Product Summary may be obtained from the authorised product distributors. You should read the Product Summary before deciding whether to purchase the product. You may wish to seek advice from a Financial Adviser before making a commitment to purchase the product. In the event that you choose not to seek advice from a Financial Adviser, you should consider whether the product in question is suitable for you. Please refer to the policy contract for the exact terms and conditions, specific details and exclusions of this product. As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid. Buying health insurance products that are not suitable for you may impact your ability to finance your future healthcare needs. 

Information is correct as of January 2021.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
Protected up to specified limits by SDIC.