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What is Term Insurance

What is Term Insurance – Singapore has a very developed insurance industry and together with it many choices of insurance coverage for you and your family.

As there are more and more different forms of coverage terms and products, it is advisable to learn more about what you are going into and plan out what is best for your long term & short term plans.

Having the necessary knowledge and basics will make sure you do not get into products that maybe useless for you.

Funds could be better off deployed in other places for growth or coverage purposes.

Let us today share with you what it is and how you can purchase it for your coverage for you or your family members.

If you are keen to learn more about Tips to consider when Buying Term Insurance in Singapore. You can also read our article on that topic.

*Note: This article does not constitute financial advice, please get your financial advice from qualified financial planners*


Term insurance are generally products that are used for protection purpose. They usually affordable and common amongst insurance products.

So What is Term Insurance in short?

Term insurance covers you with insurance coverage for a fixed amount of time, say 5 to 30 years.

Most commonly, persons purchasing term insurance cover themselves in the case where they suffer death or permanent disabilities while they have young children in schooling ages.

Most people in Singapore will cover their term insurances until their children are of financial self sufficient ages before they stop cover.

 

What are the scope of coverage that Term Insurance provides?

Basic term insurances usually covers death, total & permanent disability, some major illnesses.

Such term insurance plans usually can go from 5 to 40 yeas coverage and also the sum assured amounts stay the same until end of coverage.

 

Are there any cash value?

As term insurance are mainly for protection coverage, there is no cash value involved in term insurances.

 

Is there any investment risk?

There are not investment components in term insurance.

So no, there are no investment risk in buying term insurance.

 

Can we attach a rider to term insurance policies?

Yes, riders can be attached to add on benefits provided by the basic term insurance policy.

It is usually highly encouraged to cover extra rider products to include coverage of other forms.

Common things to take note of:

  1. Make sure you pay up your policy when they are due, if you lapse the payment and wish to reinstate them, you might be subjected to medical check ups and if you are not medically fit anymore, you may lose some form of protection.
  2. Make sure you cover yourself enough so that you dependents are still covered if anything happens to you.
  3. Get Term Insurance coverage young as you may not be able to get coverage if you are beyond a certain age, depending on insurer.

 

What is the difference between buying individually or taking part in a Group?

Group Insurance are usually done by a company or a union which is set up not just for the purpose of receiving insurance cover.

Group insurance usually are cheaper as there is a big group of premiums to cover for cost, they also cover for quite a decent amount of pay outs.

For persons who are in the Singapore Armed Forces for example, they can opt in to accident plans that are very competitive in rates.

For businesses, there are two forms, opt-in or automatic coverages.

For those who are automatic, basically your company will make payment out of their own pockets for your privilege.

Whereas, for those who are given opt-in options will have to decide if they want to take part in this program.

One last thing about group coverage is that the coverage is contingent to this person still being a member of the particular group or company.

Which means they will lose coverage if they leave the group or company.

 


Who are we at Avant Consulting?

Avant Consulting is a Singapore based business consultancy firm.

Our services include but not limited to:

  1. Business Consultancy for businesses that require cash flow planning and business strategy planning
  2. Financial planning for key persons and the business
  3. SME Loan Brokering & Mortgage Loan assessments and Brokering
  4. Business registration services & Accounting Services 

If you require additional help, speak to us so that we can tailor the best targeted strategies for you and your business associates.

What is Term Insurance