SRS Insurance in Singapore: Annuities and Single-Premium Endowment Plans Compared

At the end of 2025, insurance made up 20% of the SRS investment portfolio, close to the 24% in shares, REITs and ETFs and well above the 11% in unit trusts. SRS insurance in Singapore usually means a single-premium endowment or an annuity, bought through an operator bank, a broker or an insurer.

SRS insurance is a life insurance policy paid for with money in your Supplementary Retirement Scheme account instead of your own cash. The scheme allows shares, unit trusts, bonds, fixed deposits, ETFs and certain life insurance products, while direct property is excluded. The policy is held inside SRS, so its payouts and surrender value follow SRS tax rules.

One rule treats insurance differently from other SRS investments. Penalty-free withdrawals run over a 10-year window, after which any balance except life annuities is deemed withdrawn and 50% of it is taxed. A life annuity can keep paying long after that window closes.

The choice usually comes down to three policy types: a life annuity that pays for as long as you live, a term annuity that pays for a set number of years, and a single-premium endowment that pays a lump sum or scheduled benefits at maturity. Each sits differently against SRS tax rules, and each can be compared with simply investing the same money in bonds or funds.

This guide explains which insurance SRS money can buy, how the three policy types differ, how payouts are taxed inside and after the 10-year window, a worked example on S$15,300 and S$100,000, the trade-offs against investing, and what to check before you sign.

SRS annuities vs single-premium endowments at a glance

The three policy types answer different retirement problems, and SRS tax rules treat the life annuity as a special case.

Source: IRAS tax on SRS withdrawals, MOF on SRS investments that mature after the window, DBS on using SRS for insurance (as of 3 November 2026)

An annuity payout rate and an investment return measure different things. Each annuity payment includes part of your own premium coming back to you, so the payout rate overstates the return the policy earns.

Can SRS money be used to buy insurance?

Yes, but only some insurance. Single premium insurance is among DBS's SRS investment options, and SRS funds can buy single-premium insurance products such as endowments or annuity plans. Brokers also offer them: POEMS includes single premium insurance in its SRS range, with endowment and investment-linked policies from insurers including AIA, AXA, Manulife, NTUC Income, Singlife and Tokio Marine.

What the SRS rules allow

OCBC's terms and conditions governing SRS accounts, effective 1 December 2024, limit SRS money to single premium insurance products and cap life cover, including total and permanent disability benefits, at three times the single premium. The same clause bars SRS money from buying any life insurance product that provides cover for critical illness, health or long-term care.

DBS applies the same cap: for endowment plans bought with SRS, life coverage including total and permanent disability benefits is capped at 3 times the premium, so SRS policies stay close to savings and income products.

What SRS money cannot buy

Health and hospitalisation cover. Integrated Shield plans, hospital cash plans and similar products are health insurance.

Critical illness and long-term care cover. Both are excluded outright under OCBC's terms.

Regular-premium policies. SRS-eligible products are single premium, so a plan with yearly premiums falls outside the rules.

Policies with large life cover. A plan whose death or disability benefit exceeds three times the single premium is outside the limit.

Direct property. Property is outside the list of SRS investments altogether.

Which insurance products SRS money can and cannot buy

Life annuities, term annuities and endowments explained

The three policy types differ most in when they pay you and what happens if you stop early.

Life annuities

A life annuity turns a single premium into income that continues for as long as you live, starting at an age set in the policy. Payouts usually have a guaranteed part and, for participating plans, a non-guaranteed part that depends on the insurer's investment results. The main benefit is protection against outliving your savings, which no fund or bond can offer on its own.

The trade-off is access to the capital. Once payouts begin, the premium is usually committed for life, and the surrender value in the early years can be well below what you paid. Some plans pay a death benefit to beneficiaries if you die early; others pay nothing further.

Term annuities

A term annuity pays income for a fixed number of years, then stops. It fits investors who want a predictable income bridge, say from retirement until another source of income starts. Because it pays for a known period, it can be compared directly with a ladder of bonds or Singapore Savings Bonds covering the same years.

SRS rules treat a term annuity like any other investment. If it is still running when your 10-year withdrawal window ends, its value is counted in the deemed withdrawal.

Single-premium endowments

A single-premium endowment takes one premium and pays a maturity benefit at the end of a set term, sometimes with smaller payouts along the way. Some are short-term savings plans with a guaranteed yield at maturity; others are participating plans where part of the maturity value depends on bonuses.

Income's Gro Capital Ease, for example, is a single premium savings plan with a guaranteed yield at maturity, a minimum single premium of S$10,000 and an option to pay with SRS funds, though its cash value on early cancellation may be zero. Across the category, returns are generally low, and these products often need larger sums and have extended lock-in periods.

How SRS insurance is taxed

SRS tax rules apply to money leaving the account, and an SRS-funded policy is still inside the account. Buying the policy is not a withdrawal, and neither is a maturity payout that goes back to your SRS account. Tax applies when money is withdrawn, or when the rules deem it withdrawn.

The normal withdrawal rules

From your prescribed retirement age, 50% of each withdrawal is taxable, with no penalty, and withdrawals can be spread over 10 years from the first penalty-free withdrawal. Your prescribed age is the statutory retirement age when you first contributed, which is 64 for first contributions made from 1 July 2026. Withdrawing before then makes 100% of the amount taxable, plus a 5% penalty.

The life annuity exception

A life annuity is the one SRS investment that can run past the 10-year window without being deemed withdrawn. If the investment is a life annuity, you are taxed on 50% of the total annuity payouts each year, for as long as the payouts are received. For annuities, the 10-year withdrawal period limit for SRS accounts does not apply.

That spreads the tax over your whole retirement. Each S$10,000 of life annuity payments adds S$5,000 to your income for that year, and with little other income, much of it can fall inside the first S$20,000 of chargeable income that is taxed at 0%.

Endowments and term annuities at the end of the window

Other policies get no such exception. An SRS investment need not mature at the prescribed retirement age, so you can hold an endowment that matures years later. But if the investment is not a life annuity and matures after the 10-year window, it is valued and taxed at the 50% concession at the end of the window.

That creates a timing gap. The tax is due on the policy's value at the end of the window, even if the policy only pays out later, so you need cash outside the policy to pay the bill. Policies that mature inside the window avoid the problem, because the proceeds return to SRS and can be withdrawn on your own schedule.

Taking a policy out of SRS

Since July 2015, you can make some withdrawals in the form of investments, transferring them out of the SRS account without selling them. This applies to withdrawals on or after the prescribed retirement age, on medical grounds, by a foreigner withdrawing in full after holding the account for at least 10 years, and certain withdrawals after death. Operators may refuse when the investment cannot be valued separately, such as an inseparable part of an insurance policy.

How a life annuity and an endowment are taxed around the SRS 10-year window

Worked example: relief going in, deemed withdrawal coming out

Take a citizen with S$100,000 of chargeable income who contributes S$15,300 to SRS in 2026 and, over the years, puts that and later contributions into single-premium policies. Two separate things happen: each contribution earns tax relief, and the policies produce whatever they produce.

Example only, based on IRAS individual income tax rates, IRAS tax on SRS withdrawals and MOF on SRS investments that mature after the window (as of 3 November 2026). Assumes tax residency, gross tax before rebates and no other income in the year of the deemed withdrawal. The S$100,000 policy value and the S$10,000 annuity payment only show the tax mechanics.

The relief and the policy are separate decisions. The S$1,759.50 tax saving lowers the cost of getting the S$15,300 into SRS, whatever you buy with it afterwards. A policy, a bond fund and an equity portfolio then each carry their own costs and returns.

The deemed-withdrawal line shows why maturity dates matter. With no other income, S$50,000 of taxable income costs S$1,250. If you were still earning, the same S$50,000 would sit on top of your salary and be taxed at your marginal rate.

SRS insurance vs investing in bonds and funds

The insurance case rests on guarantees and lifetime income, the investing case on flexibility, cost and growth. Both can be funded with SRS money and stay inside the scheme until withdrawn.

Source: IRAS tax on SRS withdrawals, DBS on using SRS for insurance (as of 3 November 2026)

A fixed payout also loses ground to inflation. Prices rose 2.2% in the year to September 2026, and a level annuity payment buys less every year that prices rise. A portfolio can grow with prices over long periods, but it can also fall, and it cannot promise income for life.

Life annuity, term annuity and single-premium endowment compared for SRS money

Examples of insurance plans that accept SRS money

Insurers change their SRS-eligible shelves often. These are plans the insurers themselves name as payable with SRS funds.

Source: Income Gro Capital Ease, Prudential SRS plans (as of 3 November 2026)

Your operator bank's own menu is the other route. DBS lets you buy single-premium insurance with SRS online via digibank, and OCBC and UOB list insurance among their SRS options. Ask for the product summary and benefit illustration of any plan before comparing it with others.

What to check before buying an SRS annuity or endowment

The documents an insurer must give you contain everything needed to compare plans. Read them with the SRS timeline next to you.

SRS eligibility in writing. Confirm the plan can be paid with SRS funds and that the premium will come from your SRS account, not your bank account.

Guaranteed and non-guaranteed values. Separate the guaranteed maturity value or payout from the illustrated bonuses, and compare plans on the guaranteed part first.

Surrender values year by year. Check what you would get back after one, three and five years, and compare it with the premium you paid.

Maturity and payout dates. Line them up with your prescribed retirement age and the likely end of your 10-year window. An endowment maturing after the window is taxed on its value at the window's end.

Life annuity or term annuity. Only a life annuity sits outside the deemed withdrawal, so confirm which type you are buying.

Death benefit and nomination. On death, SRS funds are deemed withdrawn on the date of death, with an exemption of up to S$400,000 adjusted for earlier withdrawals. Check who receives the policy benefit and how it is paid.

Charges and distribution costs. Ask how distribution and policy charges are reflected in the premium and surrender values.

When SRS insurance fits, and when it doesn't

An SRS policy suits a specific kind of investor: someone close to retirement who values certainty over flexibility. The same features that make it useful for that investor make it costly for someone who may need the money or has decades to invest.

Cases where it can fit

You worry about outliving your savings. A life annuity is the only SRS product that pays for life and stays outside the 10-year deemed withdrawal.

You want income you don't have to manage. Fixed payouts suit investors who would rather not rebalance a portfolio in their 70s and 80s.

You can commit the capital. Money you are sure you won't need before maturity bears the lock-in more easily.

You want to spread SRS tax thinly. Taking 50% of a modest annuity as income each year can keep taxable income low across many years.

Reasons for caution

You may need the money early. Surrender values in the early years can be far below the premium.

The illustrated returns depend on bonuses. Non-guaranteed amounts can be cut.

The maturity date falls after your window. You would owe tax on the value before receiving the proceeds.

Inflation matters to you. A level payout buys less each year that prices rise.

You have decades before retirement. A long horizon gives a diversified portfolio more time to compound, and SRS money can be moved into an annuity closer to retirement.

Compare SRS investing with StashAway before committing to a policy

If you would rather keep SRS money flexible than commit it to a policy, you can invest it with StashAway, with no subscription or redemption fees. Managed portfolios such as General Investing and Income Investing charge 0.2% to 0.8% a year depending on your balance, and Income Investing reinvests dividends when it is funded by SRS.

To choose your own US-listed and UCITS ETFs instead, ETF Explorer with SRS charges US$1 (excl. GST) per buy or sell order, with no monthly fee.

Unlike the guaranteed part of a policy, portfolio values move with markets, so you could get back less than you invest.

Frequently asked questions

Common questions before using SRS money for insurance.

Can I use SRS to pay health insurance premiums?

No. SRS money cannot buy life insurance products that provide critical illness, health or long-term care cover, and eligible policies must be single premium. Health plans have to be paid from outside SRS.

Are SRS annuity payouts tax-free?

Half of each life annuity payment is taxable each year, for as long as payouts continue. With little other income in retirement, that taxable half may fall in the 0% band, so the tax actually paid can be small or nil.

Does the 10-year SRS withdrawal rule apply to annuities?

A life annuity is excluded from the deemed withdrawal at the end of the 10-year window, so it can keep paying for life. A term annuity or an endowment that is still running at that point is valued, and 50% of the value is taxed.

Does surrendering a policy early trigger the 5% penalty?

Surrendering the policy returns its value to your SRS account, which is not a withdrawal, so no penalty applies at that point. The penalty applies only if you then take the money out of SRS before your prescribed retirement age. You may still lose money on the surrender itself if the surrender value is below the premium.

Can I buy CPF LIFE with SRS money?

CPF LIFE is funded from your CPF Retirement Account, so SRS money plays no part in it. A private life annuity bought with SRS can sit alongside CPF LIFE as a second source of lifetime income.

Does a single-premium endowment guarantee the illustrated maturity value?

Only the guaranteed part is promised. On participating plans, the illustrated bonuses depend on the insurer's future investment results and can be lower than shown.

What happens to an SRS-funded policy if I die?

SRS funds are deemed withdrawn on the date of death, with a tax exemption of up to S$400,000 adjusted for earlier withdrawals. The policy's own death benefit is paid under its terms, so check the nomination and payout arrangements with the insurer.