Is Term Insurance worth it in Singapore?

Are you looking at getting an insurance product but unsure what to get?
Is Term Insurance worth it? In this article, we summarise the consideration to get term insurance plan for yourself.

What is Term Insurance?

Term Insurance is a type of life insurance product that provides coverage ranging from a fixed period of typically 5 years onwards and up to 99 years old.  Most plans come with no cash value. Cash value refers to the amount of money that you can withdraw upon termination/surrendering of your policy.

What does Term Insurance in Singapore generally cover?

Main Plan
  • Death
  • Terminal Illness
  • Total and Permanent Disabilities (TPD)
Optional Riders
  • Early Stage Critical Illness
  • Multipay Critical Illness
  • Advanced Stage Critical Illness
  • Premium Waiver
  • Others: According to each individual plan (Do check with each different insurer to find out more)

Types of Term Insurance

  • Increasing (Uncommon in Singapore): Protect Death Benefits against Inflation. Benefit and Premium payable increases over the years.
  • Level: Benefit and Premium remains the same throughout the policy years.
  • Decreasing: Benefit decreases and Premium payable remains the same over the years.
  • Convertible term: options to convert term plan into a permanent plan within coverage year without the need to go through medical examination.
  • Yearly Renewable Term Insurance: gives the policy owner the right to renew the policy each year until the life insured reaches the specified age without evidence of insurability.
Foreigner considering whether to buy Term Insurance Plan in Singapore

As Singapore has one of the lowest Mortality rates across countries, it makes life insurance like the Term plan’s main plan premium cheaper as compared to other countries.

is term insurance worth it

Why buy Term Insurance?

  1. Mortgage Protection
  2. Person looking for only protection element for their dependants
  3. Persons with budget concern
  4. Persons looking for a higher amount of Death Benefit (1mil and above)
  5. Persons with dependant looking to get protected in the event of a mishap.
  6. Persons looking to get Critical illness coverage at a lower cost.
  7. Persons looking for temporary coverage

Is Term Insurance Worth Considering?

In conclusion, the purpose of buying a term insurance product is to ease a family member’s financial burden and give them an alternative financial backup plan in the event of a mishap. Even though it does not have any cash value, there are still a lot of other advantages of getting a term plan.

Buy Term, Invest the Rest (BTITR)

This is a strategy that people often go with when buying a term insurance plan. Alternative to getting a whole life insurance plan, BTITR allows an individual to get the same or better result by investing the excess premium where one would have to pay for if they choose a whole life insurance plan instead.

The outcome is a potential higher return plus a separation between protection and growing your wealth.

At Moneyline.sg our partnered license advisors can compare products across 15 insurance companies. Let us know your details and we will get you the best term insurance plan that suits your requirement.

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