Singapore Insurance: on Four Top Misconceptions of Insurance
According to The Strait Times (PUBLISHED NOV 22, 2020, 5:00 AM SGT) there are four top misconceptions of insurance in Singapore. Click below to read the full article.
I Still Young I Don’t Need Insurance
The first misconception according to The Straits Times, is that younger generation may have the thought that they are still young and healthy thus, does not need insurance. But the reality is that illness and calamity can hit people of all ages. And the younger you are the lower will be the insurance premium. Obtain insurance while you are still healthy will have you covered under standard term thus, avoid you from not being insurable, policy exclusions and/or premium loading on your future coverage, when you suddenly develop medical conditions. It is suggested to obtain your life insurance the moment you started working.
I Don’t Need More Than One Insurance
As you grow, so will your career and your daily life commitments and needs. In short, there is no one insurance policy which will eventually covers all your needs, it is an integration of insurance policies to completely protect and reach your financial goals. For example, medical insurance will help to reimburse your hospitalisation medical bills. Life insurance will protect your family future living expenses when you no longer around to care for them. Income protection due to critical illnesses and/or total and permanent disability will replace your income when you no longer able to work. When you want to save for your child university education, there is children education endowment plans. Lastly when you want to have a guaranteed stream of income for your retirement, there is retirement endowment solutions. Thus, these five types of insurance plans will relatively be enough to help to protect and reach your financial goals.
Insurance is Expensive
Everything in this world has a fixed value, except your life which is deemed priceless. Prices of insurance will be expensive when you want a high coverage, example, a million dollar and beyond coverage, and when you obtain it at an older age. In reality, insurance can be affordable when you obtain it at a younger age, and opt for a reasonable amount of sum assured. You may obtain term plan to enhance your coverage if you do not require surrender value, as term plan is relatively cheaper than plan with surrender value. Lastly, do understand that as long as you are able to earn an income your net worth will continue to increase, thus, this is one place where we deemed life is priceless. Problem will arise when you are unable to earn that income and take care of your love one, thus, premium of your insurance is not the problem, its coverage become the solution to your calamity.
Only Older Folk Buy Insurance
Younger generations, may see insurance as “death policies” and while being young and healthy they do not require life insurance as they feel they are unlikely to die soon. Thus, they might have missed the only opportunity to obtain insurance at a much lower premium rate, as age will only increase and insurance premium will only increases with age. If we put death aside, we will be able to see that insurance is not just a policy which covers against death. As mentioned above, insurance is also able income protection due to critical illnesses and/or total and permanent disability will replace your income when you no longer able to work. Some may also mistook medical insurance as life insurance, thus they felt that medical insurance like MediShield Life alone will be sufficient. For those who already had insurance obtained for them from their loving and understanding parents, they can just look into enhancing their current insurance portfolio, this will help to further lower the premium in the long run.
One Last Thing
Having suitable and sufficient life and income protection insurance are important as it create and provide you and/or family members, with financial support which was not there in the first place. Continue your insurance and financial planning knowledge by reading my other articles, for life insurance comparison on Term Life and Whole Life Insurance Comparison, and Income & Disability Protection Insurance Planning. If you are ready to know more about retirement planning knowledge you may visit my other articles on; What is CPF Life & 5 facts of CPF Life, Retirement Planning and Infographics on What is Retirement Planning and Examples. Hope all these articles helps you have better knowledge on you insurance and financial planning. Do contact your friendly financial consultant if you require further help, or contact me as my objective is to make insurance easy to understand and financial planning a happy process, in Singapore.
Source:
https://www.straitstimes.com/business/invest/four-top-misconceptions-of-insurance
Note: Opinions expressed are solely in Mr. Chan Kong Meng’s personal capacity and neither express the views or opinions of Prudential nor represent any professional advice in Mr. Chan Kong Meng’s capacity as a PACS representative.