Marriage vows are sacred. One of the verses specifically mentioned is, "In sickness and in health, I legally take it to be your wedded husband/wife." As we come to accept the fact that our lives no longer revolve around one person only, we have to be responsible for our spouses too.
As a married couple, we are starting to plan for a family and probably retirement in the long run, but we may have neglected protection against events that could result in death or terminal illnesses. In today's world, both spouses are likely to be working to build on their long-term plans so if something unfortunate were to happen, the financial and emotional burden on the surviving spouse could be too much to bear and the family could run into financial difficulties.
One of the biggest purchases that we could make would be our first home. The joy of having our own place is a feeling that is unexplainable but that does not mean that everything is well and we could just spend our time and effort in decorating our crib. The majority of us would be getting either a bank loan or an HDB loan to finance our house. These are huge commitments and it is important to think about what will happen if we are no longer around or become afflicted with a total and/or permanent disability. We could possibly have to sell our houses because it is too costly to finance the flat as we come to terms on the tragic loss of our loved ones.
Decreasing Term Insurance or Mortgage insurance is one product that caters to such needs.
The sum assured is reduced progressively over the duration of the policy which is in line with your loan term with the banks or HDB. Hence, in an event that either spouse is no longer around, suffering from terminal illnesses or being afflicted with a total and permanent disability, this payout would come in handy to pay off the existing loan amount, reducing the financial burden on the surviving spouse.
After settling the housing loan commitment, we should start planning on what if the unexpected events trip us up in life and stopping us from living our life the fullest. We mentioned in earlier paragraphs on being responsible to each other so we should not pass on the large financial burdens to our loved ones; instead, we should be getting ourselves insured with adequate cover.
With time and as we age, hospital bills are getting more and more expensive. The discovery of new drugs to cure or reduce long-term damage to vital organs due illnesses, while beneficial in providing a cure and respite, are likely to be expensive and increase medication costs. Hence, it is important to get ourselves covered in the event of hospitalisation and any subsequent outpatient treatments. This will help to reduce our medical bills and if possible, fully paid, by the insurers.
Furthermore, we have touched on the topic of Health Insurance in other articles and if you are buying an integrated health insurance product, you can make use of your Medisave to pay for the premiums. By doing so, you would have provided security to your loved ones if you are warded or if anything unfortunate were to happen, the payout would be sufficient to pay off the existing housing loan to reduce the financial burden.
At Insurance@FSM, we have on board a list of term and health insurance products available from the different insurers. Please feel free to look through the different product factsheets and if you have any questions, you can always approach our friendly team of Investment Advisers for a more detailed discussion subsequently.