1. What is the best time to buy term insurance?
Usually, people buy term insurance when they are young and healthy, so that they can lock in coverage for a long term at affordable rates.
2. How much term coverage do I need?
According to Basic Financial Planning guide launched by MAS, Association of Banks in Singapore (ABS), Association of Financial Advisers (Singapore) (AFAS) and Life Insurance Association (LIA), you are encouraged to obtain insurance protection of 9 times your annual income for Death & Total Permanent Disability, and for Critical Illness, 4 times your annual income.
Source: https://www.lia.org.sg/media/4008/basic-financial-planning-guide.pdf
3. What is the difference between term insurance and endowment insurance?
Term insurance provides protection for a fixed period. It pays the sum assured only if you pass away, become totally and permanently disabled or are diagnosed with a covered critical illness (if the benefit is included) during this period. These products are typically more affordable as they do not include a savings element, meaning there is no cash value if the plan is surrendered early.
Endowment insurance combines protection with a savings element. It pays the sum assured along with any accumulated bonuses either at the end of a fixed period (maturity date) or upon death/total and permanent disability (if this benefit is provided) during this period. Endowment insurance allows you to take part in the performance of the participating fund in the form of bonuses that are not guaranteed.
You may refer to 'Your Guide to Life Insurance' for more information.
