Insurance is about protecting your loved ones future, about living life knowing that their financial needs will be taken care of. Here at Insurance@FSM, we believe that everyone can attain proper insurance coverage without incurring huge costs. Unfortunately, when insurance commissions are skewed to compensate your “friendly” agent or banker, you really have to think hard if they truly have your interest at heart or simply see you as a means to fill their pockets.
Based on a study by Tower Watson for LIA in 2012, the average protection need is 10x a person’s annual salary. This amounts to an average protection coverage of $626,000, which may differ between individuals due to varying liabilities and commitments. Many people are under insured due to the fact that agents are only interested in selling you the most expensive products which gives them the highest commission!
Protection needs comprises of 3 things:
- Ongoing living expenses for dependents (e.g. children, elderly parents)
- Outstanding liabilities (e.g. credit card, car loan)
- Additional expenses (e.g. final expenses and unpaid services)
At different stages in our lives, we have different financial needs. A couple with kids may require a higher coverage amount, as compared to a young adult just starting out their career. To help illustrate the savings you can get through Insurance@FSM, we have some examples below based on the average protection coverage a person should have.
How Insurance@FSM helps you get much more affordable premiums?
Ronald, age 35, is a non-smoker. He is looking at having coverage for death and terminal illness, so that his financial obligations are fully covered. The lowest cost option is to utilize term insurance plans, which provides high insurance coverage and has a fixed duration.
Table 1: Term Plan
Product |
Sum Assured |
Premium Term |
Annual Premiums Paid |
Estimated Total Commission Received from Insurer |
Savings You Get Through Insurance@FSM |
Term |
$600,000 |
35 Years |
$1,650.60 |
$2,640.96 (approx. $1,000 first year commission) |
$792 |
From table 1, Ronald can get himself a $600,000 sum assured coverage, which comes at a pretty low annual premium of $1,650.60. Based on Insurance@FSM’s 30% commission rebate, Ronald will enjoy an estimated total savings of $792.
However, Ronald may prefer to accumulate cash value in his insurance plan while seeking protection coverage. In this scenario, he can utilize a whole life insurance plan to do so.
Table 2: Whole Life Plan
Product |
Sum Assured |
Premium Term |
Annual Premiums Paid |
Estimated Total Commission Received from Insurer |
Savings You Get Through Insurance@FSM |
Whole Life |
$200,000 (with Minimum Protection Benefit of $600,000 till age 70) |
20 Years, Covers for life |
$5,852.60 |
$7,491.33 (approx. $4,000 first year commission) |
$2,247 |
From table 2, Ronald can attain $600,000 sum assured coverage through the minimum protection benefit that is available on some whole life plans. This usually enhances the coverage during the years when you would likely have the most financial obligation. Based on Insurance@FSM’s 30% commission rebate, Ronald will enjoy an estimated total savings of $2,247.
A whole life plan would continue to provide protection coverage after the age of 70, albeit at a lower sum assured of $200,000, while a term plan will cease to cover at the end of the policy duration.
By comparing the total premiums paid, a term plan costs $57,771 while a whole life plan costs $117,052. For the additional benefit of whole life coverage, it might make sense for Ronald if his budget allows for him to purchase and service the policy throughout the premium term.
With different plans available, comes the difficult task of choosing the right one for your financial needs. At Insurance@FSM, we have a team of professional investment advisers and specialists to help review and walk through with you the different plans that are available, so that you can make the best informed decision. Get the protection coverage you need today, contact our investment advisers at advisory@fundsupermart.com.
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