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Why You Need Life Insurance Even If You Are Young and Independent

Written by Singlife | 21 Sep 2020 |

For a young person who’s just starting out to work, life insurance may not immediately sound like the first thing you’d spend on with your first paycheck. Since you’re still young (in your early to late-twenties), is life insurance really necessary? Should money you earn in your first job be better spent on hobbies and outings with your friends?

But everyone you meet will tell you getting life insurance when young is important. Why?

The general misconception from getting one is that you’re young and therefore don’t need life insurance coverage. You’re less at risk of being afflicted with a fatal disease. You did a health check and everything’s tip-top fine. The standards of medical care here is top-notch. No one at your age falls sick and dies. It can’t possibly happen to you. The list goes on and on.

Time to reconsider.

Even for Singaporeans, the threat of critical illness cannot be escaped. With rise in colorectal cancer amongst young adults and certain rare cancers more prevalent amongst the young, the young are certainly not infallible to illness. In fact, certain cancers are often diagnosed in advanced stages, compared to older patients, due to the misunderstanding that some cancers are rare amongst younger patients—bringing the concern of terminal illness into the realm of young adults.

According to definitions from the Life Insurance Association Singapore (LIA), terminal illness refers to the conclusive diagnosis of an illness that is expected to result in the death within 12 months.

Today, while COVID-19 has a comparatively lower fatality rate for young adults, there is no guarantee that further health complications will not appear down the road, even after recovery. In fact, some studies show that survivors of COVID-19 still struggle with proper functioning of their lungs, heart and liver. It’s too early to fully understand the lasting consequences the virus has on our bodies.

So yes, perhaps the popular acronym #YOLO is taking on a crucial, new meaning in these disturbing times—-hence we should thoroughly consider getting covered as soon as possible before anything worse befalls.

If you’re young and considering life insurance, here are some details to look out for, using Singlife’s Term Life insurance as an example: Singlife provides two base plans for different coverage needs—DIRECT-Term Series 1.2 is a simple and affordable plan, while Term Life Series 3 is a flexible and customisable plan.

 

1. Policy Term

 Term life insurance is a type of life insurance that provides insurance coverage for a fixed term of your choice. Unlike whole life insurance, premiums for term life insurance are usually cheaper too—that’s because it only lasts for a fixed term and has no cash value (meaning that should you decide to give up your coverage, you will not receive cash in return).

Singlife’s DIRECT-Term Series 1.2 offers terms for 5-year, 20-year and up till age 65. Term Life Series 3 lets you customise coverage period (from 1 year to terms up to age 99).

 

2. Sum Assured

In Singlife’s case, the sum assured varies from a minimum of S$50,000 to a maximum of S$400,000 for DIRECT-Term Series 1.2 and S$410,000 to S$2m for Term Life Series 3. Note that your premium varies based on the sum assured, as well as on your policy terms, your existing health condition and age.

 

3. Lump-Sum Payout Conditions

The payouts of term life insurance usually occur upon death or terminal illness. For DIRECT-Term Series 1.2, this includes total and permanent disability.

It is important for you to know the scope of coverage, as well as what the payout conditions entail. For instance, in order to claim under the terminal illness benefit, the diagnosis of this condition must be supported by a specialist and confirmed by the Company’s appointed doctor.

 

4. Riders

Riders are additional benefits attached to the base plan. It usually comes at an extra cost.

You would usually take a rider you want to enhance your coverage to have better peace of mind.

For example, you want to be able to claim a portion of your sum assured if you are diagnosed with critical illness. Do this only if you can afford it. Otherwise, you can always stack it on later, subject to terms and conditions, when you are financially ready.

For both of Singlife’s term life plans, they do offer their own optional riders: DIRECT-Term Series 1.2 has the DIRECT-Critical Illness Series 1.1 (covers 30 critical illnesses), while Term Life Series 3 has two riders: Critical Illness Advance Rider Series 3 (covers 36 critical illnesses) and Disability Advance Rider Series 3 (covers total and permanent disability).

 

5. Flexibility to Increase Sum Assured

Most insurance plans do allow for upgrades where you pay additional premiums to broaden and increase coverage amount (subject to underwriting). With Term Life Series-3, you have the flexibility of increasing sum assured without any medical underwriting upon certain specified life events. This is helpful if you get married, have a child or you’ve recently bought a house; especially if you do not want to take on additional policies elsewhere and you feel the additional sum assured to your existing coverage should suffice.

Life insurance is critical no matter what age you’re at. If your parents have bought life insurance for you since you’re young, then you’ll understand why they did so in the first place. It is also important that you review any existing policies you have and their coverage terms.

Did you also know that the earlier you get term life insurance (before 30), the lower the cost? Furthermore, with Singlife’s term life insurance, your insurance premium will stay level throughout the renewed policy term. This also means that should you purchase a term life plan for a 20-year term, you get to enjoy the same affordable cost of premiums for the next 20-year term. No doubt your future self will thank you for making these considerations now!

Ultimately, unforeseen events do happen and you’ll need to protect and support yourself and your loved ones no matter what. You only live young once (#YOLYO), so don’t throw it all away and live the rest of your life unprepared.

 Beyond Term Life Insurance, Singlife also offers Critical Illness Insurance and Cancer Insurance.

It is also offering a limited-time 25% off its base plan for the Standalone Critical Insurance Plan and 15% off riders for Critical Illness Insurance up till 30 November 2020.

 

The information is meant for your general knowledge and does not regard any specific investment objectives, financial situations or particular needs any person might have and should not be relied upon as the provision of financial advice.
 
All Singlife’s policies are protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Singlife or visit the LIA or SDIC web-sites (www.lia.org.sg or www.sdic.org.sg). 
 
This advertisement has not been reviewed by the Monetary Authority of Singapore.
 
Information is correct as of xx xxx 2020.