Life Insurance in a Nutshell

By Contributing Author, 10 June 2016 1653

There are so many types of insurance in the market, the most common being life insurance. But what is it exactly, how does it differ from other insurance coverage, and is it really the best insurance for you?

Life insurance, as its name suggests, offers protection throughout your lifetime. At its most basic, life insurance provides death and disability benefits, and some offer the option of adding “riders” that cover critical illness as well. Some plans also offer yearly cash payouts over your lifetime, helping you build up your wealth so that you are always financially protected with peace of mind.


Term Life vs Whole Life Insurance

It’s confusing to know which type of insurance coverage you should get. You can start by narrowing down whether you prefer Term Life or Whole Life Insurance.   

In a nutshell, Term Life plans are purely for protection up to a specific age or duration, during which time the insurer will pay a fixed sum of money (sum assured) upon death. The premiums are usually lower than with Whole Life plans, as the policy has no cash value. With Whole Life insurance, you get protection plus savings. Like Term Insurance, a lump sum is also paid out upon death but the key difference is that a portion of the premiums paid for Whole Life Insurance goes towards investing in a fund, and this accumulates cash value over time. The coverage for Whole Life Insurance is for one’s entire life. 

Here are some other considerations when choosing life insurance: 

A lifetime of protection

Life is fraught with uncertainty. We may not be able to avoid all the unexpected or unfortunate events in life, but with adequate insurance coverage, we can protect ourselves against financial fallout in times of adversity. 

Most life insurance with dread disease coverage in Singapore provide benefits only during the advanced stage of a disease. However, there are some plans that allow you to receive financial support even at an early stage so that you can seek prompt treatment without having to worry excessively over the bills. 


Financial security throughout your life

Our financial needs change as we progress through different stages in life. Therefore, your life insurance policy should be flexible enough to enable you to live life to the fullest at any age. A policy like Gro Prime Saver, easily available online, offers yearly cash payouts as early as from the 5th year onwards, until 100 years of age. In addition to the annual payouts, policyholders will receive special cash benefits on the 20th and 30th anniversaries of their policy. You also have the option to accummulate these cash payouts at a rate of return of up to 3.25% p.a., so your wealth grows together with you. 

If you’re looking for something that gives you security during tough times, VivoLife, also available online, is a good life insurance plan for a rainy day. In the unfortunate event of retrenchment or being diagnosed with early stage cancer, its retrenchment benefit and Early Cancer Waiver rider let you enjoy the same insurance coverage for a limited period of time without having to pay future premiums. 


Affordable premiums

As life insurance is designed to cover you for life, the premiums are intended to be affordable. Life insurance policies are commonly offered by many insurance companies in Singapore and it’s best to speak with several insurance advisors from the different companies so that you can compare and contrast important details like the extent of coverage, benefits, flexibility, and prices – and choose the plan that best addresses your concerns. Your goal is to stay protected with comprehensive coverage while paying affordable premiums.

If you’re unsure about how much coverage you need, connect with an Income Advisor, or consult our digital advisor, askSage. Remember, no one is ever too old – or young – to be insured. You just need to take that first step in the right direction. 


Important Notes:
This article is meant purely for informational purposes and should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income products mentioned are specified in their respective policy contracts. For customised advice to suit your specific needs, consult an Income insurance advisor.

This advertisement has not been reviewed by the Monetary Authority of Singapore.