Not sure if you need life insurance? (Yes, you do.) Here are 7 common misconceptions, addressed by a life insurance company in Singapore.
Most of us have at least heard of life insurance… and have experience on how best to avoid insurance advisers at roadshows. Insurance (and insurance advisers) often unfairly get a bad reputation, due to one or two bad personal experiences or anecdotal stories. Here, we debunk seven common myths Singaporeans have about life insurance, and reveal how life insurance can be an important element of your financial life.
Myth 1: I’m already covered by MediShield Life for hospitalisation; I don’t need life insurance
Myth 2: I don’t have dependents, so I don’t need life insurance coverage
Young, single, and free — and not in need of life insurance, right? That’s not true. While life insurance certainly plays a vital role for individuals with dependents to care for, a person without dependents can also get great benefits from being insured. Have you ever considered who would take care of funeral expenses or any of your outstanding personal debts after your death? The death benefit from a life insurance plan can go towards such expenses. You could also designate a portion of the death benefit as part of your estate to be distributed to your named beneficiaries or to charitable organisations. And while most young people may think of children when the word “dependent” comes into mind, it actually refers to any person who is financially dependent on you. So, if you’re supporting your ageing parents during their golden years, then they are technically your dependents. As such, any financial planning you do should take into account their future financial needs in case you’re unable or not around to take care of them. If you’re keen on getting a financial head start as you move through life, getting insured is one of the smart financial moves you should make in your 20s.
Myth 3: I’m still young; I’ll wait until I’m older before I buy life insurance
Myth 4: Life insurance is too expensive
Myth 5: It’s hard to figure out how much life insurance I should have
Myth 6: I bought life insurance years ago, so I don’t have to think about it anymore
Myth 7: I need an insurance adviser before I can buy life insurance
While advice from an insurance adviser is recommended for certain types of life insurance, there are some types of policies that you can purchase on a Do-It-Yourself basis. For instance, a term life policy may be bought by oneself online, without the need for any financial advice. This is ideal for individuals who already know what type of coverage they need and the sum assured. An example of such a policy is a Direct Purchase Insurance (DPI) plan that allows you to purchase without financial advice, directly from the insurer. In most cases, you can simply get an online quote by filling in your personal details and a preference of your coverage amount and policy duration. Once you’ve received the quote, you can make a payment online right away, and within minutes you’re insured. SingLife offers this service for their term life as well as endowment policies. If you’re planning to get a life insurance plan, check out these tips.
A version of this article first appeared on singlife.com/blog. Singlife is a life insurance company based in Singapore.