Life insurance is a topic that is often overlooked, potentially due to the morbid discussion to be had or the belief that ‘everything will be alright’. Yet, it something that almost everyone should consider, as a premature death can affect your family both emotionally and financially, especially if you’re an expat in Singapore with assets across multiple jurisdictions.
Here are some of the most common myths associated with life insurance;
1. The insurance you have via your employer is all you need
Whilst having insurance through your employer is a nice perk, it would be dangerous to solely rely on this cover for a number of reasons. Employers will often provide insurance on a multiple basis e.g. 1 or 2 times your annual salary. This ‘salary’ doesn’t usually include commission, bonuses and any additional income you may have such as dividends from company share schemes. Therefore, you may not have a sufficient amount of insurance to cover your total income and expenditure.
Secondly, even if you do have ample insurance through your job, this cover would terminate should you leave the company. You can of course replace this cover on the open market when you move, but this is likely to cost more given your older age. Plus, any medical conditions you have developed over the years will probably lead to a more costly premium.
Finally, you may be able to get a cheaper policy on your own, especially if you are young and in good health. You will also have the flexibility to choose the amount of cover you need and on what term, without it being restricted by a multiple of your salary. As premiums generally remain the same throughout the duration of the policy, locking in a premium whilst you are young is likely to save you money over the longer term.
2. Only the breadwinner needs insurance
Whilst protecting the income of the bread winner is extremely important, the value of a stay at home spouse is also an area that would be worth insuring. For example, if the stay at home spouse was to pass away, the breadwinner may need to hire extra help in the form of cleaning and child care, which can prove quite costly. The breadwinner may also wish to take time off work to help the family adjust to their loss, and proceeds from any insurance may help with this.
3. Life insurance premiums are expensive
Life insurance can actually be quite cheap, especially if the cover is taken out early and when in good health. Furthermore, the benefit level and the duration of cover can be varied to ensure the overall premium meets any budget you may have.
4. I am in poor health so won’t get insured
Just because you have an underlying health issue, doesn’t mean you can’t obtain insurance. Many insurers are happy to consider such applications, and have expert underwriters who assess your details on an individual basis.
5. I can get a better deal online
Whilst the internet can be a good source of information, you may not necessarily get the best product, at the best price. Engaging a broker to act on your behalf means they can do all the hard work for you, and suggest products based on your individual circumstances having compared the whole market. They can also advise on the quality of the insurance companies involved and also ensure the policy is set up on the correct basis.
6. I am too young for life insurance
Whilst you may not have financial dependents or a large asset pool at this stage, implementing insurance now could save vast amounts of money further down the line. This is because the main component of life insurance premiums is age. The longer you wait, the more expensive these premiums will get, and the more likely you are to develop medical conditions that will increase these premiums further.
Whatever decision you make when it comes to life insurance, be sure it’s an informed one. We would welcome the opportunity to sit down with you for a free, no obligation discussion regarding your insurance needs.
