How Life Insurance Works To Protect Your (And Your Children’s) Happiness
We all know that life insurance is important, especially when you have young ones at home. But with so many types of life insurance plans available, things can get confusing.
At its most basic, life insurance provides payouts and benefits should you die or suffer certain devastating events, like total and permanent disability (TPD) or critical illnesses (CI). These serve to provide the financial means for you and your dependents to carry on with day-to-day life, thus protecting your loved ones from facing great financial hardship.
If you delve deeper into life insurance plans, you’ll come across other terms, like term life, whole life, critical illness, cash value – there’s a lot to digest! Here we look into what all this means for you and your family. 
Term Life vs Whole Life Insurance
Life insurance can be categorised into two main types: term or whole life insurance.
Term life insurance plans cover you for a set period of time, called the policy term, usually up to a certain age or for a certain number of years. If you should die (or suffer a TPD and/or CI, depending on your plan) during your policy term, your insurer will pay you a fixed sum of money (sum assured). At the end of your policy term, the policy coverage ends with no cash value.
On the other hand, whole life insurance plans offer protection for your whole life, plus enable you to build up cash value. Just like in term life insurance, a lump sum is paid out should you die (or suffer a TPD and/or CI, depending on your plan). The key difference is that a portion of the premiums you pay is invested in a participating fund. This accumulates cash value over time, growing your wealth.
Which of these will best keep your family happy and protected? Here’s what to consider.
What protection do you want?
As mentioned earlier, life insurance plans are meant to payout in case of death, TPD or critical illness. Critical illness here refers to a set list of 37 illnesses and diseases, defined by the Life Insurance Association of Singapore.
In Singapore, most plans will specify which stages of the critical illnesses they will provide coverage for – early, intermediate or advanced stage.
When looking at life insurance plans, take note of what stages of CI are covered and ensure that the coverage provided meets your protection needs. 
Just protection or protection with wealth accumulation?
If you’re only looking for protection against life’s uncertainties, consider a term life insurance plan. With its payouts in case of death, TPD or critical illness, you and your family will be well prepared for the worst case scenario. A plan you can consider is Income’s Star Term Protect.
Star Term Protect provides affordable coverage and guaranteed renewal1 of your policy, with coverage up to a maximum age of 84 years (last birthday). You’ll also be able to reduce out-of-pocket expenses with the optional Hospital CashAid rider in the event of hospitalisation.
If you’re looking for something that will keep your family protected and help you grow your money at the same time, a whole life insurance plan, like Income’s Star Secure Pro, may be good to consider. Besides basic protection against death, terminal illness, total and permanent disability, you can add the Advanced Life Accelerator rider to provide coverage against new, as-yet-undiscovered diseases2.
What makes this plan great for the current economic climate as well, is that in case you are retrenched and unable to find employment for three months in a row, you will still enjoy the same insurance coverage without having to pay premiums on your basic policy for up to 6 months3.
And if you do make it to old age with no claims on your whole life plan, it will provide cash value in the later years of the policy, making it a good choice if you’d like the option of some extra retirement income.
What will you be able to afford in the long run?
As life insurance is designed to protect you over a long period of time, it’s important to ensure your premium is affordable. Look for a plan which gives you as close to the amount of coverage you need as possible, while keeping within what you think is an affordable premium. The last thing you want is to find yourself unable to maintain your life insurance plan after a few years.
If in doubt, connect with an Income Advisor for expert advice on how to determine a budget for your insurance needs and guidance on selecting the best plans for yourself.
Make a well-informed decision to protect your family’s happiness
When you buy life insurance, it goes beyond personal benefit or even protecting your own finances. Life insurance can actually protect the happiness of the ones who depend on you. By insuring your life and against critical illness, you’re ensuring that you and your family will never have to face the financial strain that leads to choosing between “nice-to-have”s that bring the family happiness, and the daily necessities such as every day expenses and treatment costs. You won't know when life's uncertainties will strike. Life insurance can act as a safety net that ensures you will never need to put a pause on the things that makes your child and family happy in the event of unfortunate events.
Find out more about the ways in which you can protect your family’s happiness with a life insurance plan for yourself here.
1 Guaranteed renewal is applicable only if there is no claim on your policy during the policy term and the insured is age 79 (last birthday) and below. We will renew your policy for the same sum assured and policy term. However, if the insured’s 84th birthday falls within the next policy term, we will only renew it for a shorter term (in multiples of 5 years) such that the renewal term will not exceed the insured’s 84th birthday. The renewal premium will be determined by Income and is based on the policy’s renewal term, sum assured and the age of the insured at the time the policy is renewed.
2 An event (including a future unknown disease) leading to a surgery or an infection, and requires a stay in ICU for 5 days or more in one hospital admission, which is claimable under the Major Impact Benefit, subject to policy’s terms, conditions and exclusions.
3 You must have paid at least 6 months’ premiums, your retrenchment must have taken place no earlier than 6 months after the cover start date and you have not been able to find employment for three months in a row after being retrenched. Only premiums on the basic policy and Star Secure Pro – Protection Benefit compulsory rider (excluding any riders attached) will be waived up to 6 months. This benefit can only be claimed once. Please refer to the policy contract for further details.
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 Insurance 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.
These policies are protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Income Insurance or visit the GIA/LIA or SDIC websites (www.gia.org.sg or www.lia.org.sg or www.sdic.org. sg).
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