Insuring yourself on a private plan that is more comprehensive is imperative to protecting both you and your family on the rainiest of days – and no, we’re not talking about employee benefits or a company-wide insurance policy.
When it comes to individual insurance cover, we mainly see questions around three main categories; critical illness insurance, whole life insurance, income protection and term life insurance. It’s important to not lose sight of your objective when buying health cover, especially as expats living and working in Singapore.
In simple terms, term life insurance covers you in the event of permanent disability or death. Why should term life insurance be on your list for financial planning? If you are the sole breadwinner for your family, have dependants, or have responsibilities, proactiveness in your finances can go a long way. One of the biggest misconceptions around the purchase of health insurance is only buying it when you need it. Getting good term life insurance when you are comfortable can protect you in the down times and keep premiums low.
Find out more about life insurance health cover here.
As the leading health insurance broker, the Expat Insurance team has had wealth of experiences in managing both personal and corporate health cover plans for expats and locals here. No matter the circumstances, our well-designed policies are made to suit your needs.
1. Going for a short tenure or term
Before you decide to buy a term life insurance policy, it can be helpful to understand several things – so as to prevent making any of these mistakes.
One of the main mistakes made with term life insurance purchases is to go for a short tenure. Decidedly, the length of the term is up to you, but we recommend that you plan right and go for a decent length of coverage time.
When you buy the insurance, for how long you’ll be insured, and the risks of the tenure all play a part in the efficacies of the plan. For instance, you may want to save a few dollars – buying a ten-year term life insurance at 30, but you may end up needing it more at 40 with increased risk of illnesses. Similarly, making this mistake can lead to you needing another term at 40, in which case premiums may be incredibly high.
We all want to save costs but it makes prudent sense to determine the right tenure for your term life insurance prior to making that purchase.
2. Buying insufficient coverage or waiting too long before buying
As mentioned earlier, buying health cover earlier translates to better financial planning. When you wait too long to buy coverage, you run the risk of high premiums. A high premium to be paid over a tenure can prove to be financially challenging, especially for the entire family. That said, buying too little coverage in the hopes of saving a dollar only predisposes your family to greater vulnerability.
If we consider the cost-effective method, buying term life insurance sooner rather than later can help. Like many other insurance plans, the longer you wait, the higher premiums get. Similarly, money alone cannot get you a good policy. Buying term life insurance late only becomes harder with increased health risks and costs.
Is term life insurance a necessity? Read more here.
3. Buying too many riders on top of your term life insurance
Conversely, there is a balance to strike when it comes to strengthening your term life insurance. Adding riders to your health cover can be incredibly useful in bolstering your coverage. For instance, riders like accidental death benefit or disability benefit can safeguard your dependents’ needs in the future, should an unfortunate event occur.
However, many people are convinced by the emotional value propositioned by these riders as opposed to really evaluating the value they add to their original coverage. Buying too many riders can be counterproductive – serving to only increase the premium by a stark amount but not actually amounting to sizable benefit.
Distinguishing between adding riders for emotional reasons and actual considered value can help your term life insurance planning go that much smoother.
4. Reviewing your term life insurance plan
Your term life insurance plan is never a one-stop purchase – like other purchases, reviewing them will ensure that they fit according to your needs at any present moment.
Over the years, your habits, needs, and financial capabilities may have changed – calling the need for a term life review with your agent. From losing an old habit like smoking to having more children or earning better, your term life insurance needs to accurately reflect that.
Your health cover, term life insurance and other policies are a big part of a healthy term life insurance. Not reviewing your coverage is a costly mistake you’d want to avoid!
Insure Your Life With Expat Insurance Singapore
Beyond liquid savings, the mark of a healthy financial plan includes insurance planning. High healthcare costs – especially ones that are unprecedented and unaccounted for – can make a dent in your finances. Making a well-informed plan around your term life insurance can protect you from unexpected pitfalls (the pandemic is one clear example of an unexpected downturn in times!)
Speak with our health insurance brokers today to see how we can design a plan for you and your family.