When Is the Best Time to Sign Up for Life Insurance in Singapore?
Life insurance is a legally binding contract between a life insurer and the policyholder who enrols in the insurance program. When the policyholder enrols, the life insurer agrees to pay a sum of money to the policyholder’s beneficiaries when the latter passes away. In exchange, the life insurance policyholder must either pay the insurer a single premium upfront, or pay smaller increments on a regular basis. For most Singaporeans who have life insurance, it’s usually the latter arrangement that they’ve signed up for.
There are several good reasons for Singaporean citizens to consider getting life insurance.
For one, life insurance will address their loved ones’ financial needs in case they die or become permanently disabled. A number of programs for life insurance Singapore residents enrol in also include an investment option. That allows for the policyholders to earn a little money on the premium amounts they pay, which makes these programs good sources of passive income.
You may be thinking of getting life insurance for yourself and your loved ones in the future. But when is the best time to enrol?
Here are five indicators that you may be ready to sign up for life insurance in Singapore.
1. When You’ve Ascertained Your Needs and Financial Goals
The first indicator that you’re ready to get life insurance is that it fits with your current life plans. Perhaps you’re old enough to think about setting aside money for the future, instead of generating income to cover your basic needs. Perhaps you’re already married, and life insurance makes sense because you want to guarantee your partner an easier time when you pass away. Or perhaps you already have dependents, like very young children. In this case, you may want to get insurance for the years that they can’t earn for themselves yet.
If you’re in any of these situations, and getting life insurance is a sensible decision, then it may be time to enrol.
2. When You’re Sure That You Can Afford Life Insurance
Getting life insurance means that you have to be responsible about the premiums. You should only sign up for life insurance if you know for certain that you can afford it. It’s wise to sign up when you’re fairly set in your career and have enough funds to cover regular premium payments.
One thing you should take note of is that premiums are often lower when you’re younger and healthier. The older you get, and the more complicated your health situation becomes, the more expensive your insurance plan will be. You may want to consider getting life insurance now as opposed to when you’re much older, as today is when it’s the most affordable.
3. When You’ve Got All Your Health Records in Order
If getting life insurance is definitely on the table, you’ll need to get your health records in order before you apply. Your life insurer will need to know about your current health condition and whether you are living with any physical ailments. They’ll also need to know if you engage in high-risk activities, like smoking.
Once you’ve got your latest health records and know where you stand with regard to your health, you can apply for life insurance.
4. When You’ve Found the Right Insurance Program to Sign Up For
Now that you’re considering life insurance, which programs should you sign up for? There are a lot of different policy options in the market, and you may be overwhelmed with the sheer number of choices available. But you should only say yes when you’ve found the right program to enrol in.
Before committing to anything, do your research on the different kinds of life insurance policies available to you. There are term life insurance policies, which expire after a certain time period has elapsed. There are also permanent life insurance policies, which remain in place until the policyholder dies or unless the policies are revoked. There are unbundled life insurance products, and also bundled products like whole life insurance programs or investment-linked policies (ILPs). If you’re interested in investing as well as getting life insurance, you can sign up for one of these. Lastly, there are insurance products that come with and without the services of a financial advisor. If you’d like for someone to advise you on managing your investments as well as your life insurance policies, you can pay the extra cost.
5. When You’re Confident About How the Insurance Policies Work
Lastly, it will be the right time to sign up for life insurance when you are confident about what doing so will entail. You must be clear about the coverage of the insurance and whether your program truly aligns with your needs and your investment horizon. You must also know what exactly you’re paying for, and how much money you’ll have to pay over time. In addition, you need to know how to make claims, how you’ll be assessed for claims, and who to contact regarding your claim status.
The bottom line is, you need to be sure about your ability to read the fine print and follow it to the tee. When you’re no longer queasy about dealing with all this information, you’ll be ready to enrol.
Some Additional Reminders When Signing Up for Life Insurance in Singapore
Before you start on your life insurance journey in Singapore, here are some last tips for you to take note of.
- You don’t have to sign up for the first insurance program pitched to you. Shop around for policies and see which programs suit you best.
- There’s usually a 14-day period called a “free-look” in which you can review your life insurance policies one last time and decide whether to keep them. Speak with your insurer to know when exactly the free-look cancellation period for their insurance product will end.
- Don’t forget to pay your premiums on time so that there are few obstructions to renewing your policies or withdrawing the insurance money.
Though getting life insurance may be a scary prospect to many Singaporeans, it frankly shouldn’t be.
Someone who is getting life insurance for the first time need only know if they are ready. Think carefully before you say yes to signing up. Nonetheless, if the policies meet your needs and align with your life plans, enrolling in life insurance will be an extremely rewarding decision for sure.