How Do You Buy Life Insurance in Singapore?
When it comes to getting a life insurance policy in Singapore and anywhere else in the world, there’s not much difference. It’s also helpful you have several insurers to choose from. Finding one that has the right package for you doesn’t have to be too stressful.
Why Apply for a Life Insurance Policy
There are many reasons why you should do so, but the most important of it all is you want to make sure that your loved ones have something to depend on just in case something bad happens to you. The life insurance coverage can be used as an exchange for the loss of income. It will help continue financial stability for your family. The money can also be utilized to pay off existing debts, such as mortgage, credit cards, and car loan.
If you have left some estate for your loved ones, such as a home, the proceeds from the policy may be utilized to cover for the taxes. Sometimes the tax payments can be so huge only a small amount will be left to the family. If you have children, the life insurance coverage can be cashed out, which will then be used to pay for their educational funds.
If you happen to live longer than your life insurance policy, you can use it to augment your retirement income as well as to cover for your health care expenses, especially if you’re suffering from a dreaded disease.
You can also cash out your insurance policy and give it away as a charitable donation.
How to Look for a Life Insurance Agent
Most of the insurance companies in Singapore offer all types of insurance policies, from health to life. This way, you don’t have to look for several agents for various kinds of insurance policies. Nevertheless, it is highly essential that they all belong to the Life Insurance Association of Singapore. They are the ones that maintain the standards in the industry for so many years. They work alongside MAS or Monetary Authority of Singapore. The insurance companies therefore should be approved or registered by MAS.
The good thing is it’s still possible for you to look for an insurance agent internationally, as it’s easy for you now to apply for one through the World Wide Web. Or you can apply in an insurance company that has offices in various parts of the world if ever you decide to not retire in Singapore but somewhere else.
The Types of Life Insurance
In general there are two broad types of insurance policies in Singapore. You have the term insurance and the whole life insurance. However, you may come across more specific insurance policies.
One of the cheapest types of life insurance policies is the term insurance. It is also the most basic. You cannot build equity on it, which means there’s no such thing as building up investments or savings. Moreover, it doesn’t last for a very long time. The term insurance will be good for only a few years. After that, you have the option to renew it or not. Do compare term insurance before you make your purchase
Though this life insurance policy doesn’t cover you for the rest of your life, it is the most practical. Remember, the reason for getting life insurance coverage is to secure your family’s financial future. If you happen to live longer than your term life insurance, there’s a huge chance you are already retired and thus can take advantage of your retirement savings plan. Your children may already be done with school. There’s no need to maintain a life insurance policy and pay premiums.
Whole life insurance, meanwhile, covers you for the rest of your life. Because of this the fees and premiums are extremely high, but how much you pay may be fixed. You can also build up equity or savings through whole life insurance, so your proceeds increase over time.
You can tie your life insurance policy with annuities. This way, you can have a stable monthly income while you’re growing old. But before you can do so, you may have to be a member of CPF or Central Provident Fund. Then you are qualified and have met your minimum sum scheme. The funds you get from CPF’s minimum sum can be invested to the life insurance company of your choice.
1. Apply while you’re young. Don’t wait until you’re in your forties to get a life insurance policy. You may not be able to live longer to build equity on it or enjoy its benefits. Moreover, you pay more for the policy.
2. Apply when you’re healthy. Healthy people can take advantage of more affordable premiums.
3. Choose a policy that fits your needs. If you like a no-frills insurance policy, you go for term insurance. If you want to make some investment, opt for whole life.
4. Read the fine print. Insurance policies can become void. You will know instances where it becomes non-enforceable by reading the terms and conditions prior to getting the coverage.