When it comes to securing your family’s financial future, life insurance is one of the most important tools at your disposal. In its simplest form, it is a contract between you and an insurance company in which you pay premiums in exchange for a certain sum of money provided to your designated beneficiaries upon your demise. This amount can come in handy to pay for expenses like funeral costs, medical bills, and outstanding debts.
Many people believe that they only need life insurance when they have children, but that is not the case. In fact, there are many times throughout your life when having life insurance can be beneficial. Here are four instances when you should consider purchasing a policy:
- When you are starting a family
- If you are the primary breadwinner in your household
- When you have significant others who rely on your income
- As you approach retirement age
That being said, there is no one-size-fits-all solution for life insurance. As there are many different options available in Singapore, it is crucial to make sure that your chosen plan meets your needs. Consider this: Do you need coverage for a specific period of time? How much can you set aside to cover the cost of your life insurance premiums?
With that in mind, we’ll explore what term life insurance is and how it works so you can make an informed decision.
What is a term life insurance?
Term life insurance is one of the most popular types of life insurance, and for good reason. It is affordable and offers protection for an agreed period of time, making it an ideal option for those who are looking for temporary coverage. Term life insurance is a type of policy that provides protection at a fixed period of time. This can last 10, 15, 20, 25 or 30 years.
Should you pass away during the specified term, your beneficiary will receive the guaranteed lump sum payout. Term life insurance is often chosen by people who are in their early 20s and 30s, as it is less expensive than other types of policies. It is, in fact, the simplest and most affordable option in terms of monthly or annual premiums, depending on your insurance provider. Term life insurance can also serve as a safety net for young families who want to ensure their children are taken care of if something happens to them.
Do note that there is no payout if you outlive the term. The policy, however, can be renewed, providing protection for as long as you need it.
Benefits of term life insurance for expats
Everyone can benefit from having a life insurance policy in place. This is especially true for foreigners who are living and working in another country. For expats in Singapore, term life insurance can be an especially important part of financial planning. Should something happen to you, your loved ones can be left with a significant financial burden. A term life insurance policy would provide them with the resources they need to cover your final expenses.
If you are the sole breadwinner for your family, the policy can replace your income and help them maintain their standard of living in Singapore. For these reasons, buying term life insurance is one of the most important steps you can take to protect your loved ones.
Once you have a good understanding of your needs, you can start shopping around for policies that fit within your budget. However, it’s important to remember that term life insurance costs can vary significantly from one provider to the next, so it’s worth taking the time to compare rates before signing the dotted line.
Start planning for the future
Depending on the coverage of your term life insurance plan, the policy may also provide more comprehensive protection for critical illnesses and more. This comes in the form of riders to protect you in any type of emergency. With the right policy in place, you can have peace of mind that your loved ones are in good hands.
If you are keen on getting a life insurance and protection plan in Singapore, a trusted provider can help you calculate how much coverage you need based on your current circumstances and guide you. For more information, feel free to schedule an appointment with Expat Insurance today.