Best Life Insurance Plans Singapore 2021
Life insurance gives financial security to families that fall victim to unfortunate situations like the permanent disability or sudden death of the principal earning member of their family. It’s an assurance that your family will be taken care of financially even if just the breadwinner isn’t around anymore.
Given the many uncertainties we face every day, more and more are opting to get a life insurance plan. Of course, it’s not a task; you have to sift through many options. But the problem is, more often than not, you just don’t have the time to sit down and do all the research to figure out which best insurance plan fits your requirement.
In that case, no need to worry because we’ve got you covered. Here you’ll find everything you need to know about the life insurance policy to figure out whether or not it’s worth your money.
Why do we need life insurance?
One of the first questions that we should ask ourselves when thinking about buying life insurance is “Why do we need life insurance?” The answer to this question will help us determine whether or not this type of investment is right for us. Hence, not only will it solidify the importance of a crucial life decision, it will also narrow down the search according to our specific needs.
To ensure financial stability
The reasons why we should get life insurance are fairly obvious. The biggest one being that it gives you financial security. There are many different types of life insurance. Some payout in cash, some pay in kind and others allow you to choose what you want your payments to be. Whichever one you choose, your payout will give you financial security whilst you are alive and after you are gone.
To leave our loved ones an inheritance
It’s not only a matter of providing a temporary safety net that will protect your family from any unexpected challenges in life. Getting life insurance will also help provide them with an inheritance. Who doesn’t want this for their family, right? The inheritance you will be leaving them will help them secure a much brighter future.
To give ourselves peace of mind
We can all understand the anxiety around dealing with life’s uncertainties. That’s arguably what makes living more exciting, but we must admit that there are times when the stress just gets to us. Getting reliable life insurance will eliminate much of these worries and give you time to take care or enjoy other aspects of your life.
Pros of life insurance
Another reason that you need life insurance is the death benefit. The death benefit is the amount of money that dependents will receive if the policy holder passes away within the conditions stated by the insurance policy. A basic term life policy will provide you with a death benefit equal to the annual premiums that you pay. There are other types of policies that will provide more money to you in the event of your death. Your premium will be adjusted so that the death benefit is enough to cover your burial expenses and legal fees.
One of the biggest pros of life insurance is that your loved ones will have a secure home base when you are gone. If they have invested in a home, they will have a source of income should you not die during their lifetime. This means that you can either choose to pay them out of the proceeds of the life insurance or allocate the lump-sum payment straight into their accounts, providing them with a steady income each month.
Most permanent insurance policies give you access to a certain cash value account, and some policies give you access to dividends. You can choose to invest the money in stocks, bonds, mutual funds, or money market accounts. As your cache grows, you get to take advantage of tax benefits.
Cons of life insurance
Premiums can be quite expensive
The more ground the insurance policy covers, it can be expected to require higher payments. Considering the many things you have to take care of, this can be quite a hassle and can lead you to stressing over things even more. So the question, “is it really necessary?”, usually comes up when talking about life insurance.
The process can be tedious
We’re not only referring to the process of securing the policy itself, but we include the very first step you take, from deciding to get life insurance. It can be harrowing, especially if you know little to nothing about the field.
The cons of a life assurance policy pale in comparison to the advantages, making it a sensible choice for anyone wishing to ensure the financial security of their family.
Types of life insurance in Singapore
If you want to be prepared in the event of a loss of income because of any reason, you need to take advantage of the many different types of life insurance available in Singapore. People in Singapore enjoy the best life insurance services in the world. Singapore became the first country in Southeast Asia to develop a well-planned health care system. There are many life insurance companies in Singapore that offer various plans. These plans include Term Life, Whole Life, Variable Life, and Universal Life.
Differences between whole life and term life insurance
Whole life insurance
Of the three main types of life insurance in Singapore, whole life insurance is probably the most flexible and is designed to give you a lump sum payment when you die. You have an option to borrow money from your cash value or take out loans with the money from the policy itself. However, if you plan ahead you can use the cash value of your policy to pay off your debts, leaving a large cash amount which you can then invest. In addition, as your cash grows you may also be able to borrow against it, in the same way you would borrow money from a bank. Finally, if you want to convert your permanent life insurance policy into a fixed-deposit savings account, you can do so easily, although you will lose some of the flexibility of your contract.
Whole life insurance provides coverage for your entire life. You pay a premium every year and the policy provides a death benefit that can become depleted if you ever stop making premium payments. While this does not seem like a big concern when you are young, the death benefit can actually become very significant if you start to collect it. For example, if you had five children, and paid off the mortgage and bought a house, you could collect about forty thousand dollars after the first two decades of paying off the mortgage. For most people, however, the cash value component of whole life insurance is a significant factor in deciding whether or not they should purchase the policy.
Term life insurance
Term life insurance differs from whole life insurance in that it provides coverage only for a specified period. As such, you need life coverage in Singapore even if you don’t ever intend to collect the benefits. The great thing about term life insurance is that you generally pay much less than you would on a whole life policy. Still, you need to think carefully about how much coverage you actually need, since this will affect the premiums you will pay. One way to determine this is to compare what you can afford to pay on premiums with what you would pay if you died prematurely.
Of the three main types of life insurance in Singapore, term policies seem to be the most popular choice. The reason for this is relatively simple: term coverage offers very low premiums but long death benefits. For this reason, term policies can be very cost effective. In addition, as you age, you may wish to convert your term policies to permanent coverage.
Universal life insurance is also known as cash-value insurance because of its unique properties compared to the ones we have on this list. Similar to an investment account, a universal life insurance policy will yield cash value over time. The interest would follow whichever is greater between the current market rates or the minimum interest rate. This cash value can be accessed without affecting the death benefit of the policy holder.
Variable life insurance
Variable life insurance, or variable life, as it is also known, offers a cash value account and lifelong coverage. However, variable life policies also have higher downside potential of making more money than other permanent life insurance plans. As such, it is often paired with a universal or a whole life insurance policy.
Which life insurance is the right one for you?
Term Life Insurance is the most basic coverage and provides coverage for a particular period of time. It is usually purchased by people who do not anticipate any major health problems in the future. People with small children can purchase universal life insurance to cover burial expenses and some out-of-pocket expenses. Whole Life Insurance is considering the most expensive form of Life Insurance in Singapore, but it gives the maximum coverage of any other type.
Most people prefer permanent life insurance policies in Singapore because they pay more than term-life insurance products. Permanent coverage policies are typically purchased by people who expect to live for a long time. Typically, the cost of these permanent life insurance policies is very expensive, but they provide the most financial security to your family upon your death. To find the best rates on permanent life insurance products in Singapore, you can contact a life insurance company in Singapore that offers a variety of different products to meet the needs of your family and your budget.
Regardless of the type of insurance you choose, however, remember that it is extremely important to get proper coverage and that a reputable company will always be able to offer you the best possible coverage.
1. Will my health conditions affect how much I will pay for my insurance policies?
High-risk health conditions can increase the amount of money that you will need to pay on your life insurance policy. If you are considered a high-risk person by your insurance provider, you may pay a higher premium on your policy than people who have health conditions that are not as risky. For example, if you are overweight and have high blood pressure or diabetes, you may be charged a higher premium on your life insurance policy than someone with normal, healthy lives. If you need the additional money to cover these risks, you will need to look at purchasing a high-risk policy.
2. Can I change the beneficiaries of my insurance policy?
Most insurance companies require that you change the beneficiary annually, but there are insurers who allow you to do so as often as you want.
3. Do I need to take a medical exam?
Sometimes, people want to purchase term life insurance without having to undergo a medical exam. The reason for this is that they do not believe that they will need a medical exam.
With certain life insurance, a medical exam will not be required. But it is important to take note that if you take this route, you should expect to pay more for your insurance.
Term insurance, on the other hand, is considered to be an investment product and therefore the company will often offer a lower monthly premium if you buy a term life insurance policy while you are still young and in good health. However, term insurance does require a medical exam. The policyholder must pass a physical test, take a medical exam, pass a mental or written test, or be declared mentally incompetent before he or she can legally purchase term life insurance.
Singapore is home to many insurance companies that provide life insurance plans for its citizens. If you are looking for the best insurance plans, the experience can range from easily looking them up on the internet to having a convoluted collection of information that will end up being counterproductive. We’re here to guide you every step of the way. Feel free to drop us a message any time!