Many young Singaporeans in their 20s or 30s may not always think about buying life insurance because legacy planning is far out of their line of sight.
However, what they fail to see is that unexpected situations can arise at any time and cause financial problems. What happens if an accident or a serious illness limits your ability to work? What if sudden death creates insurmountable debt for family members?
The unforeseen happens to everyone at any age, and a life insurance payout offers a solid solution to cover outstanding debt so loved ones don’t have to weigh it down.
Benefits of life insurance in your 20s and 30s
Life insurance plans in Singapore promise to pay beneficiaries an amount of money upon the death of an insured person to alleviate financial hardship in the event of a mishap. It’s good to note that buying life insurance in your 20s offers many more benefits than getting one in your 40s or later. Here’s why:
You can get better life insurance coverage
Even the best life insurance plans in Singapore do not cover pre-existing medical conditions. It is a common practice among insurers. This means you’re more likely to get comprehensive coverage if you’re younger and have fewer or no medical conditions.
Premium prices increase with age
Life and term insurance premiums are closely linked to your health and age. It gets more expensive every year as health tends to deteriorate over time and become more vulnerable to health risks.
If you want to pay a lower premium, buying a policy in your 20’s is a lot cheaper than in your 40’s.
You are protected against loss of income
Unexpected circumstances can sometimes take away your ability to earn income without warning.
In this case, life insurance provides you with a steady income to get you through tight cash situations, pay off debts or serve as a reserve for retirement.
It offers financial compensation for dependents
One of the main goals when buying life insurance in Singapore is for estate planning and financial support for loved ones when you die.
The insurance payout can free your family from debts like mortgage or car loans that you may be leaving behind and ensure they can continue to live comfortably without impacting their lifestyle.
Types of life insurance
When you are ready to shop around for the best life insurance plan in Singapore, note that such policies are divided into two three categories: term life insurance, whole life insurance and investment-linked policies (ILP).
term life insurance
Unlike life insurance, which covers the entire lifetime, term life insurance covers a specific number of years, e.g. B. 20 years or 40 years.
If you are on a monthly premium budget, financial advisors usually suggest starting with a term policy to get maximum coverage without paying expensive monthly premiums.
Full life insurance
Whole life insurance refers to policies that provide coverage up to the age of 99. Such policies allow you to increase your savings and benefit from maximum cash value returns when a policy is claimed or surrendered.
With life insurance premiums typically increasing by an average of eight to 10 percent each year, taking out a plan in your 20s is cheaper and offers broader coverage.
Investment-Linked Policies (ILP)
This is a hybrid financial product that includes life insurance functions and investment components. ILPs provide periodic life insurance coverage and use a portion of the premiums to invest in funds of your choice.
Keep in mind that ILPs do not have guaranteed cash values as they will fluctuate with the fund’s performance.
Best Life Insurance Plans in Singapore
In case you are ready to sign up for a life insurance plan, check out the following list of the best life insurance plans offered by different insurers in Singapore:
The best term life insurance
| insurer | SingLife – MyProtector-Term Plan II | AIA – AIA Secure Flexi Term | Tokyo Marine – TM Term Assure II |
|---|---|---|---|
| annual premium | $521 | $448 | $412 |
| cover | death, total permanent disability (TPD), terminal illness | Death, terminal illness, terminal cancer | Death, TPD and terminal illness |
| expression |
| Ages 5, 10, 20 and 30, renewable to ages 65, 75, 100 |
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The best life insurance
| insurer | SingLife – MyWholeLife Plan IV | Income – Star Secure | AXA – Treasure of Life (II) |
|---|---|---|---|
| annual premium | S$5,138 | S$4,915.20 | S$5,260 |
| cover | death, TPD, terminal illness | death, TPD, terminal illness | death, TPD, terminal illness |
| pay premiums | Single, between 5 and 25 years old | 5 to 30 years to 64 years | 10, 15, 20, 25 or 30 years |
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Conclusion
You should not sit on the fence when it comes to buying life insurance. These policies offer the greatest coverage and the lowest premiums if you are in your 20s or 30s.
Even if you can’t afford life insurance, you should consider term life insurance with a term of 10 to 30 years instead. In this way, you are financially secure throughout your working life at very low cost.
ALSO READ: Buying insurance during a recession
This article was first published in ValueChampion.
