Shopping for life insurance is somewhat similar to buying shoes. With so many types and designs available, how do you find the right one that’ll take you through your days in comfort?
If you’re after something simple and practical, term life insurance might be the answer. Here are five reasons why term life insurance could be the perfect fit for your insurance needs.
#1 It’s straightforward
If you want basic shoes that keep your feet protected from the elements as you go about your day, you won’t need LED clip lights, spare laces, shoe charms and other extras.
Term life insurance is just as straightforward. It gives your loved ones a lump sum of money if you pass on during the coverage period. In some cases, it also gives a payout if you’re diagnosed with terminal illness or total and permanent disability. That’s it!
It’s the simplest form of life insurance – pure protection, without sometimes complicated investment layers or other bells and whistles.
Incidentally, if you’re stumped about what protection plans you need, check out this guide to finding the right insurance plan for your concerns.
#2 Low cost, big cover
We all have that pair of trusty shoes that gets the job done at a fraction of the cost of designer limited edition shoes. Likewise, term insurance is more affordable than whole life plans or other plans that combine protection with investment or savings.
Compared to whole life insurance, term life insurance typically costs less for the same amount of coverage.
At the same time, term insurance gives coverage that can go up to S$1,000,000 or more. Whether you have just joined the workforce or you’re starting a family, you can choose a coverage sum that suits you.
I completely understand that affordability is a priority when you’re just starting to manage your own finances, which makes term life apt for budget-conscious young adults or those with growing families. In fact, here’s how to nail the financial aspect of adulting.
#3 Various options
Just as shoes come in different sizes to fit your feet, term life insurance has different coverage periods to fit your protection needs. Because it’s meant as a cost-effective solution, you might choose to be covered until you’ve paid up your home loan, until you retire or whatever your specific “critical years” are. Having ample coverage during this chosen period gives you the assurance that if the worst happens to you, your family will continue to be financially supported.
Singlife Elite Term II offers various coverage periods, including a policy term till age 98 – meaning it’s quite likely you’ll be covered for your whole life, with chance of a payout. Should you get a term plan coverage till you are 98 years old and pass away at the ripe old age of, say, 97, your loved ones may receive the death benefit payout as an inheritance.
In case you’re wondering, the life expectancy at birth of Singapore residents was 83 in 2022.1 Want to live to 100? Here’s the path to a long and happy life.
#4 Add-ons to address specific concerns
When shoes don’t quite sit right with your feet, customised arch support insoles or toe filler inserts can ensure comfort, i.e. a better fit.
With a term life plan, you can add riders to your basic plan and customise it to suit your specific protection needs. For instance, you could add coverage for total and permanent disability or critical illnesses. These riders aren’t always for the purpose of getting lump-sum cash payouts for specific insured events, such as cancer or disability – they could also be premium waivers to relieve you of making premium payments if the covered events were to take place.
#5 Convertible
For most people, your trusty shoes are the ones that'll take you easily from everyday activities like grocery shopping to a work event.
Similarly, term insurance gives you flexibility. Some insurers allow you to convert your policy into a whole life policy. Why would anyone want to do that?
Well, your priorities change as you advance through life and it makes sense for your life insurance to evolve with them. When you’re a young working adult thinking about starting a family or you’re supporting elderly family members, protection would be the main concern, which is what a term life policy takes care of. However, once you’re a pre-retiree and your grown kids are no longer financially dependent on you, you might want to focus less on protection while benefitting from policy bonuses or cash value in your old age, which a whole life plan does beautifully.
Before you step outta here…
Like shoes, there’s no one-size-fits-all when it comes to life insurance. However, term life may be your preferred option for a tailored coverage that suits your unique protection needs and budget while letting you step out with the courage and financial confidence you need to take on the world.
Notes
1. Source: Department of Statistics Singapore, Complete Life Tables for Singapore Resident Population 2021-2022, accessed on 8 January 2024.
