Singaporeans are said to be kiasu (fearful of losing out) in almost everything. Looking around at the enrichment classes that a child attends these days for their development and other peripheral expenses that becomes priority makes one wonder if Singaporeans are also spending just as much on protection.
How much protection is enough?
Based on a gap study conducted by Tower Watson for LIA in 2012, a person should have an adequate insurance coverage of 10 times his or her annual income especially if one has dependants1. Alternatively, a working adult requires an average protection needs of $626,0001 ! This may just well be a guideline to the amount of insurance coverage required.
So what should I do?
Once you have a simple method to identify your insurance coverage, you may then start to work on your shortfall. With the shortfall, you may fill the gap by simply adding a term plan. Due to the fact that there is no cash value at the end of the coverage also explains why it is one of the cheapest life protection product out there.
Furthermore, at Insurance@FSM, you will enjoy cost savings.
Protection coverage and cost savings with FSM
Table 1: Illustration of term insurance premiums (40 years old, Male, Non Smoker)
Product |
Sum Assured |
Premium Term |
Annual/Monthly Premium Paid |
Savings you get when you purchase from Insurance@FSM |
Life Plan (Term) |
$626,000 |
25 years till age 65 |
$1,631/ $142 |
$667 |
Life Plan (Term) |
$1,000,000 |
25 years till age 65 |
$2605/ $226 |
$1,066 |
Note: Savings amount is based on 30% commission rebate by Insurance@FSM and the premium rates are based on 19th February 2016. Calculations are done on the assumption that the distributor will receive commissions for only the first 6 years from policy inception. The rebate figures are meant as an estimate and are not guaranteed. If the policy lapses or terminates, outstanding rebates will not be payable.. This is a simple illustration that does not take into account different client profiles and type of insurance plans.
Why do I need insurance?
Insurance is a very good tool for managing risks for you and your loved ones.
If you are earning $3,000 a month and need to cover yourself adequately for $500,000, based on a 20% savings each month, it will take you $500,000 / ($3,000*20%) = 833.33 months or 68.4 years just to accumulate that amount. This is where buying insurance to transfer the potential cost, in exchange for a fee known as the premium, for insurance company to take on the risk that you may face.
The real benefit of insurance is to reduce the financial risk which will give you the support when you least expect it yet need it. Wouldn’t the affordable monthly premiums give you the peace of mind knowing that your love ones will be protected even when you are not around?
We would like to emphasise that buying insurance can be a lifelong commitment. You may browse through the different products information available on our website and drop us an enquiry at advisory@fundsupermart.com. Our dedicated team of advisers will be happy to assist you.
Protect yourself and your loved ones now and enjoy savings at Insurance@FSM!
Source: 1 Protection Gap Study conducted by Tower Watson for LIA in 2012
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Protect yourself for $1 Million with a Term Plan and Save Close to $1,000!