Term life insurance is a type of life insurance plan that is taken for a term or duration pre-selected by the insured individual. Term life insurance covers you against death, terminal illness, and total and permanent disability. If something unforeseen happens to the insured individual during the policy term, the payout from this insurance plan can be used to help their dependents financially. This kind of coverage provides protection for you and your family and provides you with peace of mind.
Quick facts on term life insurance
Here are a few important things to know about term life insurance for a better understanding of this form of coverage.
- You can select the premium term and policy term
Term life insurance plans offers flexibility in terms of coverage. You can select the number of years for which you wish to be covered. Usually, you can choose a term that is anywhere between 10 to 80 years (or even more). You may also select the premium payment term as per your financial capacity.
- Term life plans are quite affordable
When compared to whole life insurance plans, term life insurance is more affordable. If you are on a budget, you can consider being covered by term life insurance.
- There is no cash value
It is important to keep in mind that term life insurance plans do not offer you any cash value if you surrender coverage. This is one of the main reasons why term life plans are so affordable.
- Coverage can be customized
You can opt to enhance the coverage that you receive by adding riders to your term life insurance plan. Let’s look at some of these riders in the next section.
Riders for term life insurance
Leading insurers in Singapore allow you to supplement your term life insurance plan with riders for enhanced protection. For instance, you can add coverage for critical illnesses to your term life insurance plan. Some insurers even provide premium waiver riders. For instance, if you are diagnosed with certain early or intermediate stage medical conditions, your premiums will be waived for a certain number of years. Thus, you can focus your energy and finances on your recovery; your term life insurance policy won’t lapse but will be right there and active during your premium holiday.
Bonus tip – It helps to buy term life insurance plans when you are younger as your premiums will likely be a lot cheaper then.
Who should buy term life insurance?
Term life insurance can benefit almost anyone looking to get life insurance coverage at budget rates. If you have just graduated from college, you may be looking for the most affordable life insurance coverage option available. And, doing that is honestly better than not getting any coverage at all. Term life insurance would be perfect for you to help you start your protection journey immediately.
You may also consider buying term life insurance to get coverage for certain goals or milestones in life. For instance, a person who already has a whole life insurance plan might want to take a term life insurance plan to exclusively cover their home mortgage. In this case, the whole life insurance plan payout is meant to secure their loved ones and the term life plan will exclusively be focused on providing protection to pay off the mortgage in case the homeowner passes away during the period of the term plan. Thus, we can see how versatile the purposes of a term life insurance plan can be.
We hope that this quick guide has helped improve your understanding of term life insurance in Singapore. Do remember that you can always speak to a financial consultant for any further help in selecting a plan for coverage.