With adequate protection coverage, you can ensure that your loved ones can live the life that you have planned for them even if you pass away unexpectedly.
Do you know that up to 62% of Singaporeans agree that purchasing life insurance is a demonstration of their love and commitment to their families? (source: AIA Singapore Nationwide Protection Survey, June 2011).
To have protection for your family mostly includes providing enough cash so that they can maintain the current standard of living as well as to cover any outstanding debts and funeral expenses. Living standards vary from family to family and largely depends on the family income, all the more so if the family depends on a single breadwinner.
An industry average of 10 times of income is usually used by most practitioners to determine the amount of insurance required. Again, this is just a simple start point to determine your required insurance requirement. It is still best to seek the advice of a trusted consultant to assist you in determining the true protection value through a comprehensive financial health review.
For the uninitiated, some factors to consider include the need for immediate money, debt repayment, providing for loved ones as well as any possible forced sale of assets.
We usually classify life insurance under 3 main types:
- Term Insurance (lowest premiums without any cash value)
- Whole Life Insurance (highest premiums due to popular options which provide limited pay years)
- Investment Linked Insurance (highest flexibility but yet the most contentious of all types due to the perceived high mortality charge that is usually increasing year on year).
We shall be providing more information on each type soon!