Life Insurance in Singapore: What is it, Who Offers it, and How to Choose the Right One for You
What is life insurance?
Have you ever considered whether your loved ones will have adequate financial support when you die? You can secure your beneficiaries’ futures by taking a life insurance policy. A life insurance policy lets you pay a recurrent premium to the insurance company in return for a tax-free lump sum when you die.
The recipients of your death benefit can be your spouse, children, or any nominated dependent. The benefit is paid out if you die while having an active policy. This insurance payout is a solid income replacement that will financially sustain your beneficiaries so they can afford food, bills, housing, and related expenses. It is
There are different types of life insurance in Singapore, but the main ones are term life insurance and whole life insurance. Term life insurance is the most popular type because it offers good coverage at affordable prices. However, always note that the cost of the policy depends on factors like age, policy length, your health, and lifestyle.
Do I need life insurance?
If you are the sole provider in your family, there are high chances that your family heavily depends on you for financial support. In that case, you need a fallback plan to help them cover their expenses until they get another source of income. If you are married but without children, there are chances that your spouse was a cosigner in your mortgage, credit cards, or car loans. Upon death, these costs are transferred to spouses, and assets can be attached with delinquent loans. Life insurance is the best way to protect them from financial turmoil.
Types of life insurance
There are many types of life insurance; however, term life insurance and whole life insurance being the main ones. The other types are just variations of the two.
Term life insurance
As the name suggests, a term life insurance policy is available in term lengths ranging from 1 year, 5, 10, or 20 years. The insurer and the insured agree on a coverage amount only paid to the dependents if he dies while the policy is active.
Term life insurance differs from other life insurance policies as it lets clients lock into a coverage agreement through the length of a policy. Some packages, however, allow an option to have an annually renewable configuration, whereby the policy will keep on renewing every year as long as premiums are paid. Annual policies are handy when you only need coverage for a few years. The main advantage of term life insurance is that it is very affordable. However, a significant disadvantage is that beneficiaries will not receive a payout if you outlive the policy.
Whole life insurance
The whole life insurance policy gives the insured a life insurance coverage that lasts until they die, on condition that they keep up with their premium payment schedule. However, the standout feature in a whole life insurance Singapore is that it accumulates cash value on the policy. That way, it acts as an insurance policy that has features of an investment. However, even though it doubles up as an investment, a major disadvantage is that the premiums cost more than permanent policies.
The best way to find life insurance in Singapore
The comparison process for insurance policies is cumbersome if you are dealing with physical insurance offices. To some extent, it is still tiresome to download single brochures from every insurance website to make comparisons. Follow the easier route by using an online comparison system to find the most viable solutions for you. With just a simple quiz or consulting an online specialist, getting the best life plan Singapore has for your needs is easy. Using this trick gives you specialist advice, structured financial payments, and convenient ways to apply in one portal.
Two highly recommended life insurance companies in Singapore include AIA and AXA. The companies offer competitive rates and attractive riders.
AIA provides a package that offers adequate coverage for death and total or permanent disability. The “Guaranteed Protect Plus II” disability covers are up to age 70, while the critical illness is optional but covers you up to age 100. Furthermore, the interested subscriber can add multipliers (2X, 3X, or 5X), increasing the lump-sum payout for your dependents. You will also get bonuses paid if the premiums made some excellent returns where they were invested.
AXA Life Treasure
With “AXA Life Treasure,” you get a whole life insurance plan which has an extra disability and terminal illness coverage all in one package. In addition, as the policy term remains active, members are allowed to boost the benefit sum through the multiplier benefit rider. At the same time, you can opt to reduce the multiplier sum if you do not need them anymore. This gives the insured some added flexibility to alter their policy as their financial capabilities change. The result is that you can easily adjust the premiums to prices that you can afford.
Considerations before signing up
While going through each policy, understand what is covered in the package and what is excluded. Having more inclusions is a benefit to your dependents. However, if you ignore some excluded events, you may end up paying for a package with misjudged confidence that your family is secure. As a result, you should always use inclusions and exclusions to pinpoint the right package to buy.
Carefully consider the nominees and ensure that they benefit the most. You can do that by giving their full information in the nominee registration form. Doing that ensures the process of transferring funds to the nominees is smooth. Finally, have more than one nominee just in case one of them is involuntarily disqualified due to death.
With plenty of affordable life insurance options, sole breadwinners do not have to panic about sustaining their families after death. Instead, they can take extra charge by ensuring they select reliable insurance packages and regularly pay their premiums. Even in your absence, you can still play a significant role in financing your family members’ needs until they are financially independent.