Death creates a void that is hard to fill, but your passing away must not disrupt the financial future of your loved ones. Life insurance serves to protect your family’s financial health and status, particularly when you pass. In Singapore, purchasing life insurance could be viewed as a long-term investment tool that helps you save for your family’s futures expenses.
Precisely, life insurance is a helpful financial tool that should be an integral part of any comprehensive financial plan. That said, for people looking to provide the much-needed financial protection for their families, there are different types of life insurance designed to meet all sorts of needs and preferences. Life insurance comparison means you can always find a life insurance policy that suits your needs.
To help you decide what kind of protection will work best for you and your needs, this post will discuss the major aspects of life insurance. Read on to find the life insurance plans you can apply for in Singapore. This is a guide to IUL and whole life insurance from Affordable Life USA
What is life insurance?
At its core, life insurance is an agreement between you and an insurance company, where, in exchange for your premiums, the insurance company agrees to pay a lump sum to a designated beneficiary after your death. The lump sum paid to your beneficiary is called death benefit and can be used to fund just about anything.
While people have varying priorities and financial needs, when buying a life insurance policy, you need to ensure that the face amount is sufficient to cover your family’s essential expenses after your death.
Overall, life insurance offers you risk coverage and takes care of the monetary needs of your family after your death. Depending on the types you choose, your life insurance policy can be an opportunity to grow your investments.
Types of life insurance
Singaporeans looking to purchase life insurance policies have a whole lot of options from which they can choose. Depending on your diversified needs, you can purchase a policy from the broad types of life insurance: term and whole life insurance. Even better, you can customize your policy to better suit your life insurance needs.
Life insurance policies are broadly classified into the following categories:
- Terms life insurance: As the name suggests, this is a type of life insurance that provides coverage over a specified period of time. In Singapore, a term life insurance policy can cover you up to 75 years. Unless you outlive your policy, the insurer pays out the lump sum to your beneficiaries when you die or get a terminal illness.
- Whole life insurance: This is permanent life insurance, meaning it covers you until death finds you. However, coverage may last up to 99 or 100 years, depending on your insurance company. The biggest problem with whole life insurance policies is that they are about ten times more than term life policies.
- Universal life insurance: Universal life insurance is a premium form of whole life insurance with policies often marketed to high net-worth Singaporeans. It offers all benefits of whole life insurance, but the premiums are flexible.
Life insurance is broadly divided into two types, but there are so many options available to meet all sorts of Singaporean needs. The best option for you will depend on several factors, including age, long-term facial goals, health status, and lifestyle.
When is the right time to get life insurance?
The best time to get life insurance is when you are young. That said, if you are in Singapore and considering purchasing a life insurance policy, the right time for you might be now.
Practically, at a younger age, you are more likely to have lesser health issues, meaning you have a higher chance of landing lower and cheaper premiums. While this might be ranking last among the things you want to consider in the 20s, it is equally as important as accumulating wealth.
Conclusion
Life insurance protects your family’s financial status and promises to offer a lump sum to your beneficiaries in the event of your death. Depending on your personal beliefs, priorities, and financial status, you can purchase a policy from the different types of life insurance. A term life insurance policy is an ideal option if you’re comfortable with a shorter plan, while whole life insurance is for individuals who want indefinite coverage or have lifelong dependents. Hopefully, you will find this post helpful in your journey of buying a life insurance policy.
