Life insurance: Do you need it?

Most employee benefits packages provide some level of life insurance. However, it’s usually not enough for most families who will need to cover one or two decades of expenses if the breadwinner is no longer around. Employee benefits are also not transferable if you lose your job. Buying a personal policy, however, will ensure that the coverage can be used anywhere you go.

Term life insurance vs permanent life insurance in Singapore

There are two types of life insurance policies – permanent life insurance and term life insurance. Both types provide protection against financial loss in the event of death or permanent disability.

One key difference between the two is the coverage duration. Permanent life insurance is designed to cover you for your entire lifetime, assuming you’re paying the monthly premiums. Term insurance lasts for a set period of time that you choose when you buy the policy; for instance 10, 20 or 30 years.

The other main difference between permanent life insurance and term life insurance in Singapore is how much money you will get back if nothing happens to you.

In addition to providing the death benefit to your beneficiaries, a permanent life insurance policy includes a savings component in which cash value accumulates over time. If you cancel your life insurance policy, you will receive the accrued cash value, called a surrender value, while you are still alive.

Term life insurance, however, does not accumulate any cash value and is used purely as a protective tool. This means that there is no surrender value to the policy, which allows for premiums to be more affordable.

How do I determine which type of policy is best for my family?

The best life insurance is the one that pays you when you need it! You’ll want to consider how long you need coverage for and how much of it you need.

You’ll also need to consider your budget. Term insurance is the most cost effective form of pure insurance as it is not bundled with any saving or investment component.

The benefits of term life insurance for expats

The Diot-Siaci team recommends term life insurance for expats in Singapore for many reasons, including flexibility and portability.

Term life insurance can be amended at different stages of your life, and it can travel with you to your next overseas posting. This can provide just the peace of mind you need in times of transition and uncertainty.

Additionally, you can purchase term life insurance with riders to provide additional levels of coverage. For instance, critical illness cover, and total permanent disability insurance, which provides protection in the event that the insured suffers a loss of limb or sight that prevents them from working.

For more information, get in touch with the Diot-Siaci Group. Their brokers are experienced in working with expats to determine the best term life insurance policies to suit their needs.