Debunking the myths behind life insurance
“I don’t need life insurance because I’m very careful,” said no one ever.
Fact: Life insurance is about being financially prudent. Like all insurance, life insurance is a means to safeguard yourself and your family against any unexpected situations.
This applies to almost anyone - from the sole breadwinner of the family to those who live a carefree single life. It’s about leaving a financial legacy to ensure your dependents are taken care of even from the beyond.
Yet, there are many who are unable to get past the “I don’t need a life insurance” stage because they believe that they’ve already covered their bases.
Keep an open mind though, because when you’re done going through some of the common myths behind life insurance, you might have a different opinion.
Myth: You don’t really need life insurance until you’re much older
Never, ever fall into this trap. The motivation behind getting life insurance at a later stage is mostly driven by fear. Fear of meeting your demise unexpectedly. Or having seen a few of your friends passing on due to illnesses.
The thing is, anything can happen to anyone at anytime. Having a life insurance is about ensuring you are adequately covered from the very beginning.
Plus, you really should not procrastinate when it comes to your life, or for that matter, your family’s well-being.
Fact: Get life insurance when you’re young and healthy
Getting life insurance when you’re younger equates to a lower premium.
While the premium does increase with your age, getting a life insurance when you’re healthier also means that you are covered for unexpected illnesses.
If you've already been diagnosed with particular conditions at the point of taking up a life insurance, these conditions would be excluded from your life insurance plan and your premium will likely be much higher. For both whole and term life insurance, getting it early would also mean that you don’t have to worry about exclusions due to your changing health conditions.
Alternatively, you can consider insurers with guaranteed term renewals. For example, DIRECT – Etiqa term life guarantees term renewal regardless of any changes in your health condition.
Myth: Life insurance costs too much for me
We know what you mean. You might perceive whole life insurance as a costly commitment due to its premium being in the range of thousands per year.
But in reality, this depends on the type of life insurance you’re getting. While it’s true that whole life insurance has a high premium tagged to it, the coverage you get is comprehensive and includes a cash value.
That, and the fact that it’s called "whole life" would hint at how extensive your coverage goes. It goes without saying that it’s better to set your life insurance plan as early as possible so that you or your dependents receive the comprehensive coverage as soon as possible.
Fact: Life insurance can be affordable
How affordable, you ask? Let’s just say it costs less than a good $50 buffet meal for the annual premium.
You read that right, it’s the annual premium we’re talking about. Of course, there’s one detail that we should mention - we’re referring to term life insurance. For example, the DIRECT – Etiqa term life plan is renewable every 5 years, or you can look at a 20-year fixed term.
The cost? It’s as low as $0.13 per day, which really is a welcome news for anyone who needs to have some form of coverage without busting their budget. Think students, housewives and even fresh graduates - all of whom will benefit from this low-cost yet comprehensive term plan.
Myth: Life insurance is more beneficial for families
We’re not saying this is totally untrue. It is a fact that life insurance is meant to ensure your dependents will be taken care of financially should anything happen to you. But this does not negate its importance to those who are happier with their single life.
There is a misconception that being single means that you don’t need to provide for the family, be it a spouse, children, or elderly parents.
Let’s put it out there – there’s no telling what will happen to you in the near future. Perhaps you’ve met someone whom you want to spend the rest of your life with. Or your parents are even healthier than you and might outlive you. What happens then?
Fact: Life insurance provides for everyone regardless of commitments
Do you know, just as assets can be inherited, debts are also passed on to your family members.
Needless to say, it’s especially important that you get a life insurance to relieve the financial burden of your passing. This could come in the form of funeral expenses or paying for ongoing home loans with the payout.
Remember this – the idea behind life insurance is to provide for people that are important in your lives. It does not matter if they are able to take care of themselves financially, or that they have enough to live by. Always, and we do mean this, always ensure there’s a plan in place to take care of your loved ones in your absence, regardless if they need it or not.
Myth: Life insurance comes with minimal to no returns
It’s no surprise that if you’re spending a good amount of money on your life insurance premium, you’ll want to know what it can do for you.
People often view life insurance as a money sink, one that does not benefit you unless you’ve passed on.
As selfish as it sounds, it has a tint of truth to it. That is if you’re looking at term life insurance plans.
Fact: Whole life insurance can have good returns
Term life insurance plans are great if you have a limited budget, and the one thing you’ll need to note is that there is no cash value upon completion.
However, should your financial health be better in the years to come, you can opt for a whole life insurance, which includes a surrender policy that has a return on the premium you’ve put in over the years.
Take DIRECT – Etiqa whole life as an example. While the policy does cover for whole life, you have the option to surrender the policy for cash value at the age of 70.
What’s more, the surrender value takes a projected investment return into consideration. Depending on the interest value during the period of holding the whole life plan, the cash value could be higher than the total premiums paid.
The necessity and long-term benefits of life insurance
Many people tend to place too much emphasis on the short-term costs of the insurance premium, and forget about the bigger picture.
Let’s be real about it – getting a life insurance plan is a commitment. It is as much about protecting yourself as it is about safeguarding your family in the event of your passing.
Whether you're looking at the more affordable term life insurance or the thorough whole life insurance, you’ll need to be fully aware of the process and know what you’re getting.
Getting your life insurance is a breeze with Etiqa as you can get a life insurance plan through an online process. It is fuss-free and quick, you can even log in to your MyInfo account to auto-fill your personal particulars.
Otherwise, you can contact any one of Etiqa's agents who can fill you in more about the plans and also answer any of your queries.
This policy is underwritten by Etiqa Insurance Pte. Ltd. (Company Reg. No. 201331905K). Protected up to specified limits by SDIC. As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid. You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you. Information is accurate as at 03 Jun 2019. This advertisement has not been reviewed by the Monetary Authority of Singapore.