SINGLE-PREMIUM products refer to insurance policies requiring one initial lump-sum payment.
This is unlike regular-premium policies, where policyholders pay at regular intervals for a minimum stipulated period.
Central Provident Fund (CPF) savings cannot be used to buy regular-premium products.
The sales of single-premium products are mainly investment- linked products (ILPs), which provide insurance cover as well as some exposure to the stock market.
An example of a single-premium ILP is NTUC FlexiLink, said Mr Edmund Wee, a full-time financial consultant with Income.
ILPs - they can also be regular- premium ones - are like unit trusts, except that they are sold by insurance companies.
ILPs also have the added feature of life insurance cover.
The life insurance industry is driven by single-premium and regular-premium businesses, with single-premium sales dwarfing regular-premium sales enormously.
For example, the fourth quarter of last year saw single-premium sales soar 37 per cent to $2.61 billion, with regular-premium sales up 39 per cent at $271 million.
For the whole of last year, single- premium sales chalked up $8.86 billion, a robust 34 per cent growth over 2006. Regular-premium sales totalled $821 million, up 28 per cent.
The CPF sector is important to single-premium sales, as it accounts for over half of overall single- premium sales for the industry.
The CPF sector accounted for 62 per cent or $5.47 billion of single- premium sales last year.
GABRIEL CHEN