Life can be great in Singapore, and many of us enjoy a lifestyle that we couldn’t replicate at home. Yet, while we enjoy the good times, it can be easy to forget that things can occasionally go wrong. For example, what if you or your partner became critically ill or died? While contingency plans may be in place if this should happen in your home country, do you have those same plans set up in Singapore? Certified Financial Planner and author ANDREA KENNEDY gives her tips on how we can protect those that matter most, even after we’re no longer here, and she recommends chatting to Expat Insurance for life insurance advice to suit your personal circumstances.
#1 Check your term insurance coverage
If you don’t have it, get it! Term life insurance is simple and relatively cheap insurance that covers the life of the person insured. Singapore life insurance is portable, which means you can take it with you if you leave Singapore – so long as the payments are made. In general, the benefit packages received by foreigners working in Singapore cover less than 50 percent of what families will actually need. And a word of warning: even if you have superannuation or other types of security, it’s very likely that, after factoring in inflation, your family will only be covered for a few years. ‘Top up’ term life insurance can fill this gap. Speak to an expert, such as the Life Advisor at Expat Insurance, who can calculate the shortfall in your policy.
#2 Make sure your wills are up-to-date
Did you know that wills are jurisdiction specific? This means that you will need a will for any and every location where you have significant assets, whether it’s a bank account or a home. For example, if your spouse has a Singapore bank account held only in their name, in the event of their death you will have to go through probate (the legal process of validating a will) in order to access those funds. Ultimately, Singapore estate law would apply, and even without a will you’d be able to access the funds. However, you can sidestep this major inconvenience if you both have up-to-date wills.
#3 Custody of children
Under Singapore law, if both parents die simultaneously, their child or children will become a ward of the state until a relative is located. We urge every parent to address guardianship in their will. This should include a clause about “temporary guardianship” in Singapore. Your helper, if you have one, is not suitable as she would be deported soon after your deaths.
#4 Own a home in Singapore?
Homeowners are advised to not only have a will, but to also establish a Testamentary Trust in the will. This Trust will take ownership of your assets upon your deaths and can then be organised to provide for your children. A Trust allows your estate to avoid probate and provides a smooth transition of your asset base into a vehicle that will follow specific instructions to provide for your children after your death
#5 Select the right life insurance plan
It’s important not to confuse “investment insurance plans” – which are expensive forced savings plans – and simple term life insurance. One is an investment, one is protection coverage. Be careful, you could end up paying hefty fees for what is otherwise simple life protection.
Finally, Andrea recommends that expats speak to an insurance advisor who is focused on their client’s needs first, and not their own commissions. Expat Insurance, for example, has a dedicated Life Advisor, Ethan, who focuses solely on protection insurance. He is available to discuss queries about Singapore life insurance, disability insurance or critical illness cover, and help guide you through the process of obtaining appropriate term life insurance.
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Call Ethan for a free quote on 6439 8029.