Life insurance in Singapore
Simply put, life insurance provides a lump sum payment in the event of your death. There are three main types of life insurance policies and each one has its advantages and disadvantages.
Term life assurance
Term life assurance pays out a lump sum if the policy holder dies within the time specified on the policy. This means that if the insured survives the maturity of the policy, they will not receive anything.
Do I really need it?
If you have a children or family who depend on you, then there’s a good chance you need life insurance.
Here are some common reasons why people do not buy life insurance when perhaps they should:
“I’m young and single. I don’t need insurance”
Think about whether it is important for you to provide support for your aging parents, or perhaps a sibling with special needs. Do you have significant debts that may cause problems for loved ones? Being young, single and in peak health with a good family history pays dividends for your insurability.
"I’m a stay-at-home parent with no salary"
Just because you don’t bring a salary to the table does not mean you don’t make a vital financial contribution towards the family. The duties of being a child-carer, chauffeur, cook and housekeeper add up to a significant value. Insuring your family’s caregiver may help to preserve your quality-of-life at home.
“I have life insurance with my employer”
Some employers in Singapore grant life insurance equal to two or more years’ annual salary. Unless you are single with no dependents, it is important to ask yourself if this is enough to care for your family’s future.
“I’ll be gone. I won’t care”
The reason you need to insure your life is to protect your legacy, and to make sure your life’s work has not been in vain. Ask yourself if your family can maintain their lifestyle without you? Can they pay the mortgage without you? Can your children attend college without you?