A 15-point due diligence checklist before taking out PPLI

A pre-application due diligence checklist for PPLI is a self-check organised around documents rather than verbal explanations: each of the 15 points maps to written material you can request from the insurer, custodian, asset manager, lawyer or tax adviser. It differs from an ordinary life insurance check. PPLI adds layers for ownership structure, asset eligibility, investment mandate, custody and carrier jurisdiction, and tax characterisation, and it lacks the layer of guaranteed cash value. The checklist therefore centres on two things: what happens when the account falls, and in which jurisdiction, and by whom, the policy is answered for.

How to use this checklist

Three principles. Documents first: product summary, charge schedule, policy contract, investment mandate, custody and asset management agreements, trust or company documents and tax opinions; if any one is missing, do not sign yet. Structure before numbers: first establish who holds the policy, whose life is insured, who benefits, in whose name the assets sit and what is guaranteed, and only then look at projected figures. Every point must answer "which document, and who confirms it".

Eligibility, time horizon and ownership structure (points 1–3)

1. Am I an Accredited Investor, and am I willing to opt in in writing?

An individual Accredited Investor (AI) must meet one of three tests: net personal assets above S$2 million (with the primary residence, net of any loan, counting for at most S$1 million), net financial assets above S$1 million, or income of at least S$300,000 in the past 12 months; the current text of SFA s 4A governs. Those who qualify must also expressly opt in. MAS has said that even where a client is an Accredited Investor, financial institutions should still consider the client's background and risk tolerance (5 Feb 2025). Where a company holds the policy, the test is whether its net assets exceed S$10 million (SFA s 4A(1)(a)(ii)); where a trust holds it, the specific trustee criteria in the Classes of Investors Regulations apply, subject to the insurer's confirmation.

2. Will I need these assets during the surrender charge period?

PPLI is usually paid by single premium, with surrender charges in the early years; partial withdrawals may incur charges and reduce cover, and the period and rates are set by the product summary. List future large outlays, such as buying property, injecting capital into a business or relocating, in a cash-flow schedule and set it beside the surrender charge table. If the assets have a definite use within the surrender charge period, PPLI is not a suitable container.

3. Who will hold the policy, and has a lawyer reviewed it?

Ownership by an individual, a trust, a company or a family-office entity differs in beneficiary rules, availability of nomination, who is identified under CRS and the procedure for changes (see PPLI and trusts and Family offices and VCCs). The test is whether there is a written structuring opinion from a lawyer together with the corresponding trust deed or company resolution. Changing the structure after underwriting usually means re-signing documents.

Life assured, assets and cash capacity (points 4–6)

4. Who is the life assured, and is there insurable interest?

Under s 146 of the Insurance Act 1966, the applicant must have an insurable interest in the life assured. Insuring one's own life automatically satisfies this; where a trust or company is the applicant, a lawyer and the insurer must confirm in advance how it is established, and with several lives assured, each one must be confirmed. Check the payout trigger at the same time: the death of a single life assured or of the last of several, as stated in the policy contract.

5. How confident am I that the assets I plan to transfer will be accepted?

In-specie transfers are subject to the insurer's review and acceptance. Common rules include concentration limits on holdings, minimum bond ratings, and exclusion of encumbered assets and leveraged products, as set out in the investment mandate documents. Until you have a written pre-assessment, do not assume your existing portfolio can be transferred as it stands (see Asset contribution and investment managers).

6. If the account falls, can I add cash, or accept that assets will be sold?

The account value is not guaranteed and may fall below premiums paid. The product summary usually sets a minimum account value, a minimum cash proportion and a grace period for top-ups. If the account falls short, the policyholder must add cash or assets, or accept that the insurer will sell assets under the policy terms to pay charges; a sustained shortfall may cause the policy to lapse. Model a fall of 30% and of 50% in the account, and see how long charges can be met and whether you could top up.

Benefit formula, cost projection and liquidity (points 7–9)

7. Do I understand the death-benefit formula?

There are two common types: account value plus a fixed additional sum (the guaranteed-issue form), or the higher of the sum assured and the account value (the medically underwritten form). The two differ greatly in cost of insurance and in what is paid after a fall. Guaranteed issue (GIO) guarantees that the policy is issued without a medical examination, not the investment outcome. Any formula applies only while the policy is in force and its conditions are met, net of amounts owed and charges due (see PPLI vs VUL).

8. Have I received a written charge schedule and a cost scenario projection?

Under LIA rules, investment-oriented single-premium ILPs in Singapore (death and critical illness benefits below 150% of the single premium) do not provide a Policy Illustration, and typical PPLI falls into this category. Only protection-oriented single-premium ILPs reaching 150% may provide an illustration, and they must add a 0% scenario (LIA). Ask the insurer for a year-by-year charge schedule and a written cost projection, and identify the year in which the policy could lapse because charges have used up the account under 0% and low-return assumptions. Projections are hypothetical scenarios and do not represent future results.

9. What does surrendering or partially withdrawing in the early years cost?

Check the surrender charge period and how the rate declines, charges and limits on the number of partial withdrawals, the effect of withdrawals on the minimum account value, and the valuation date and method (cash or in specie) for surrender and death benefits, as set out in the product summary and policy contract.

Custody, manager and carrier (points 10–11)

10. Who nominates the custodian and manager, and how are they changed?

The policyholder may nominate an asset manager and agree an investment mandate within what the insurer accepts, but cannot give specific buy or sell instructions; the insurer retains the final say on asset eligibility and mandate changes (for the investor-control rules, see Asset contribution and investment managers). Obtain the application procedure and approval conditions for changing the manager.

11. Where do I rank if the carrier's insurer is liquidated?

Singapore, Bermuda and Luxembourg each have mechanisms for asset segregation and policyholder protection (see Carriers in three jurisdictions), but neither these mechanisms nor an insurer's regulatory status amounts to a guarantee of policy value by any government or regulator; in an insurer's liquidation, a unit-linked policy is guaranteed a number of units, not a value (ACA, 25 Feb 2019). Ask the insurer for a written explanation of its carrier framework and compare it with the policy contract.

Tax characterisation and reporting parties (points 12–13)

12. Does my country of tax residence treat it as life insurance?

This is the point most often skipped. Whether the policy is treated as a life insurance contract where the policyholder, life assured and beneficiaries are each tax resident, and how account growth is treated, depends on local law and on the policyholder's degree of control over the assets (see Tax compliance). The test is a written opinion from a local tax adviser; families planning to relocate should also obtain an opinion for the destination jurisdiction.

13. Who is reported, and what figures?

PPLI is a Cash Value Insurance Contract under CRS, and the insurer reports the year-end cash value or surrender value; where a trust or company is a Passive NFE, controlling persons such as the settlor, trustee, protector and beneficiaries are also identified (IRAS, 11 Aug 2026). Where the policyholder or a controlling person is a US person, FATCA reporting and that person's own FBAR obligations apply as well. Check the self-certifications you have signed and the arrangements for updating them after a change in status.

Free-look period, PPF and annual review (points 14–15)

14. When does the free-look period start, and what does the PPF cover?

Singapore life insurers offer a 14-day free-look period from receipt of the policy documents, with a refund of premiums paid less medical and other expenses already incurred by the insurer (MoneySense, 11 May 2026). For a policy funded in specie, ask how assets are returned on cancellation within the free-look period and who bears any change in market value. The PPF covers policies issued in Singapore by Singapore-licensed life insurers, with an aggregate cap of S$500,000 on guaranteed sums assured and S$100,000 on guaranteed surrender values (per life assured, per insurer); benefits tied directly to the net asset value of underlying assets are not covered (SDIC).

15. Who reviews the statements and structure for me each year?

After the policy takes effect, check at least once a year the custody and policy statements, notices on minimum cash proportions and charge adjustments, the beneficiary arrangements, CRS / FATCA self-certifications, and whether the ownership structure still fits the family's circumstances. There should be a written arrangement stating who is responsible and when it is done.

One last question before signing

Once all 15 points have been checked, one question remains: if the account value falls to the point where it can only just cover charges, and I need the money, what happens to this policy, and can I accept that? Sign only when you can answer it from the documents. For the full steps, see Application process. Readers who want each point interpreted for their own situation can register their needs through the contact details on this site.