Life Insurance Singapore
What Is Life Insurance?
What comes to mind when you hear of life insurance?
People often misconstrued life insurance as pure death protection, which means only upon one’s passing then will he be able to receive designated payouts from the life insurer.
However, in today’s world, it is more than just death protection, life insurance usually encompasses total and permanent disability and terminal illness benefit. And these life insurance policies are legally binding contracts between the life insurer and policy owners, stating the features and limitations of the benefits.
Why Do You Need Life Insurance?
Undoubtedly, what you own today, the lifestyle you enjoy, the goals you want to achieve, and the future plans you have in place for yourself and for your dependents, are largely supported by your current income.
When one life ends, another continues. With death protection, one can be assured that his/her loved ones will not be painfully impacted by financial woes as a result of his/her sudden passing, especially he/she is the breadwinner. With life insurance, they can continue to maintain their lifestyle and living expenses, and lead complete lives.
And what about disability insurance?
The culprits that lead to disability are mainly accidents or illnesses.
When this happens, it will cause a major disruption to a person’s life, depending on the severity of the disability.
Total and permanent disability will mean that one is unable to perform any reasonable work, hence total income loss.
At this point, not only will he/she need to consider the dependents’ needs and lives, but he/she has to take care of the own needs.
For example, a caretaker is needed to look after his/her activities of daily activities (ADLs) such as washing, feeding, toileting, mobility, transferring and dressing. The alternative will be to send him/her to a nursing home. All these cost money, and the disability insurance payouts will ensure that this sudden huge and ongoing expense can be taken care of in spite of the loss of job.
How Much Is Enough?
Financial planners are often asked upon this question: “How much is enough?”
Buying insurance is an important decision and there are many factors to consider to determine how much is enough.
One of the most important considerations will be the current income. Besides using that as a benchmark on the affordability of how much one can commit to insurance premiums, another reason is to determine how much insurance is needed to replace the income loss.
With respect to disability insurance,
For example, if one’s annual income is SGD$60,000 per annum, to ensure that any major unforeseen event will not affect him/her and his/her loved ones’ for the next 10 years, he/she will need
SGD$60,000 x 10 = SGD$600,000
By doing so, he/she can consider life insurance as “buying time” for himself/herself and the family. With these payouts, he/she is able to continue to live as normally as possible for the next 10 years, giving him/her time to adjust to the new lifestyle as a result of any disability.
Another method of calculation is to factor the monthly expenses that one incurs, especially the fixed expenses such as utility bills and mortgage loan, and even for discretionary expenses that will need to incur such as food, transport and education fees if one has children as dependents.
There are also additional expenses that will incur as a result of a disability, such as the cost of hiring a caretaker or nursing home fees as mentioned above.
With respect to death protection,
On top of covering the income loss or supporting the monthly expenses, one might be looking at leaving a legacy for his/her loved ones, or to donate to charitable organizations as a gift.
Above are some considerations which are mainly discussed upon, but because every individual has different concerns, risk appetites, and financial objectives, it would be encouraged to discuss this more in depth with an established financial planner.
Types Of Life Insurance
There are many types of life insurance products in the market. We will break them down into 3 major classifications:
Compare For Best Life Insurance In Singapore
If you would like to compare and review the life insurance policies from the different insurance companies for the best purchase, you might want to know more from the each of the whole life insurance or term life insurance.
We strongly encourage to connect with us by leaving your details below so that we are able to meet up with you to understand more about life insurance in Singapore.
Financialogy is a platform that allow consumers to understand more in details the different insurance products and services that is in the market. We believe that with more information to end user, they have a more informed choice when purchasing their insurance policies.
When looking for life insurance, we strongly encourage you to consult a licensed and certified financial planner to understand more about life insurance so that you can make a more informed decision.
Want To Know More About Life Insurance?
If you would like to know more about life insurance, you may contact us at (+65) 9380 2839 or you can click on the button below to enquire about the different financial services that we provide.
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We are a licensed and certified Financialogist in Singapore that provides a comprehensive financial planning solutions to meet all your financial and insurance protection needs.
Address: 47 Scotts Road, Goldbell Towers, Singapore 228233
Contact Number: +65 9380 2839
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