Relocating to a new country for career growth is truly exciting. To make sure that it is as fruitful, you need to invest in adequate insurances. A trend shows that while expats in Singapore do focus on getting proper health coverage, they often forget about life insurance.
Life insurance forms an indispensable part of your insurance portfolio. If something unfortunate befalls you, your loved ones will receive a lump sum payout from your life insurance that can truly help them to sustain themselves. This is important especially if you are the breadwinner of the family. While the passing of a loved one can leave family members emotionally broken, a life insurance policy ensures they won’t be financially bereft.
A life insurance policy is one that offers a payout upon the insured person’s passing. The payout may also be given if the policyholder gets diagnosed with a terminal illness or total / permanent disability. There are two main types of life insurance plans – whole life insurance and term life insurance.
Whole life insurance offers coverage for as long as you live. On the other hand, term life insurance is a plan that lasts for a pre-set number of years of coverage. Leading insurance providers offer a wide coverage range from 5 to 82 years in term life insurance.
So, what sets term life insurance and whole life insurance apart?
The difference between the two types of coverage mainly lies in the length of coverage offered. In term life insurance, you may choose the period of coverage whereas whole life insurance automatically covers you for life. Moreover, term life insurance is a pure protection product whereas whole life insurance may also include an investment aspect, depending on the type of plan you choose. Finally, do note that there is a difference in the premiums, with whole life insurance premiums generally costing a bit more. There is, however, a plus point to paying these premiums as whole life policies do have a cash value if surrendered prior to the policy’s natural termination or policy maturity. On the other hand, term life insurance plans come with cheaper premiums but don’t offer any cash value upon being prematurely surrendered.
So, the choice between whole life insurance and term life insurance really depends on your unique needs and affordability. That being said, here are some points to keep in mind when buying life insurance in Singapore:
Calculate your payout requirement
You need to calculate the sufficient amount of finances your family would need upon your departure. Keep in mind that any existing debts you have will be directed to them for payment such as mortgage loans. Not forgetting to include inflation into your calculation. For instance, you might want to choose a life insurance policy that has a payout that can help your spouse in comfortably finance your child’s higher education in case you are not around.
Opt-in for riders
Riders can truly help complete your coverage. It is especially recommended to opt-in for a rider that can waive your premiums for a couple of years if you are diagnosed with certain medical conditions.
Check affordability of premiums
Remember that your life insurance policy will only hold value if you see the premiums paid with no gaps or hitches. So, when opting in for a life insurance plan, don’t merely check your current financial standing. Look forward to a couple of years down the line and see whether you will still be able to continue to make the premium payments as your responsibilities and commitments increase.
Both whole life insurance and term life insurance each have unique benefits to offer their policyholder. To discuss your needs with an insurance consultant and pick the plan best suited for you. Take care.