Who doesn't want the best deals at the cheapest price? Always wanting the best, we inevitably get drawn to deals that promise the 'most value'. However, while it may be reasonable to go for the cheapest option for items such as jewellery or cars, insurance is not something that should be scrimped on.
While we do not advocate blind purchases or over-insuring, insurance is ultimately purchased for the purpose of providing protection. This ensures that our immediate expenses and those of our loved ones can be covered when faced with unexpected situations. Therefore, when choosing your insurance, it is essential that you do not neglect your protection needs and the suitability of the policy.
(See "5 Unbelievable Properties You Can (Almost...) Afford With Your HDB")
#1 Future needs
In our previous article "Average Singaporeans Need $1 Million Coverage. Have You Had Yours?", we showed how age plays a part in determining the costs of premiums. This is because your health may deteriorate as you grow older as you become more prone to contracting illnesses and other medical problems.1 This would affect your insurance premiums as your age and medical history could cause the premiums to become more expensive. In some instances, your pre-existing health conditions may even prevent you from obtaining any additional insurance coverage. This could leave you without insurance, lacking the protection and coverage that you desire.
Therefore, while opting for the cheaper policy may be a tempting option, it is imperative that you assess your financial needs before making any purchases. With the objective of an insurance being the ability to provide for protection in unforeseen circumstances, your policy should be purchased after careful consideration, taking into account both your current and future needs. This is to ensure that your planned insurance portfolio is a deliberate decision and does not neglect nor compromise any potential future concerns.
(See "Should Your Insurance Look The Same At 25 And 50?")
#2 Understanding the full picture
Merely focusing on the prices of insurance may result in an oversight of other relevant aspects. This is because prices alone are unable to show the full picture. As different policies offer different coverages, this inevitably influences the prices of insurance policies.
Therefore, it is important that you understand the various options and benefits that are attached to policies. This is because insurance is not a one size fit all and there may be additional advantages embedded within that could provide policy owners with greater assurance. For example, term plans across different insurers have factors that differentiate them. Ranging from an embedded critical illness accelerator to flexible policy conversion options, these policies cater to different needs and thus should not be compared based on its price. Instead, understand the full picture and what the various policies have to offer before choosing the policy that would best suit your requirements.
Available Term Plans |
Manulife - ManuProtect Term, ManuSignature Term NTUC Income - I-Term, Termlife Solitaire Tokio Marine - TM Term Assure |
(See "Is Your CPF The Ultimate Piggy Bank?")
#3 Budget planning
An important point that should not be overlooked is budget planning. This means organising your finances to draw up a budget that you are comfortable with spending on protection. As opposed to just comparing the prices and opting for the cheapest policy available, a budget could allow you to get the policy with the most value.
With differing liabilities, specified timeframe and financial abilities, a budget would be a more effective and efficient way to select insurance. Hence, instead of looking for the lowest priced policy, ensure that your coverage is personalised according to your protection needs. Obtaining comprehensive coverage could give you a peace of mind knowing that you will be covered in the face of unfortunate events. Setting aside a budget could also enable you to get your extensive coverage at the best value. To begin, use our insurance selector to help you discover products that may be suitable for you. This could give you a better idea of the policies available and annual premiums required.
(See "Are Financial Disasters Your Thing? Here's 4 Mistakes You Must Avoid")
How FSMOne can help you get on track
Our team of friendly advisers are able to help you review your financial objectives, long term commitments, and offer you investment and insurance advice specific to your needs. If you would like assistance in reviewing your financial and protection portfolio, or simply to get a quote for an insurance plan, you can contact our advisers at advisory@fundsupermart.com.
Available Products on FSMOne Insurance |
Term Life, Whole Life, Critical Illness, Annuity, Health, Endowment from Manulife, NTUC Income and Tokio Marine Life Insurance *Please check with our advisory team if the product you want is available on FSMOne Insurance |
Interested to learn more? Check out these articles:
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