Menu Close

Choosing Life Insurance: 4 Key Considerations

Are you considering buying life insurance, but not sure how or where to start? Here are 4 points to help you find the right life insurance.

1. Understand the difference between term and whole life insurance

There are two common life insurances that you might have chance upon previously – whole life and term life insurance.

Here are some of the key differences between term life and whole life insurance:

  1. Protection Period: Term life insurance has a set protection period while most whole life insurance gives you a life-long protection, as long as you pay your premium.
  2. Policy Costs: The premiums of term life insurance are typically lower than that of whole life insurance.
  3. Additional savings component as part of policy: Whole life insurance policies may include an additional savings component where the payout you receive from the policy will include the sum insured and any other cash value that has been accumulated.

2. Know how much financial protection you need

Another key consideration when deciding which life insurance to purchase is to know how much financial protection you require.

According to the Life Insurance Association (LIA), your life insurance protection gap coverage can be calculated like this:

Protection needs – resources available = Protection gap

This protection gap that was calculated can be seen as the amount of financial protection that you require. Here are some additional considerations as you weigh your protection needs and the resources available. 

Your other protection needs may include but are not limited to:

  • additional expenses which you may not have accounted for (e.g., medical expenses);
  • housing and personal loans you need to pay off; or
  • any ongoing daily expenses (e.g., household expenses, childcare costs and caretaker expenses)

The resources available may include but are not limited to:

  • cash on hand or easily accessible through bank accounts;
  • available funds through CPF;
  • available funds from investments; or
  • existing insurance plans and investment-linked products

Considering these points may help give you a better idea on your personal financial protection needs, allowing you to better plan out the amount of coverage that you may require. Or, you could follow the guidelines by the LIA to have a coverage of around 9-10 times your annual salary.

3. Buy life insurance as early as possible

Buying life insurance may not be the first thing on your mind when you are young and healthy with few or zero responsibilities. However, purchasing life insurance at the early stages of your life is useful and important. 

For most life insurance, you tend to pay lower premiums at a younger age. In other words, purchasing life insurance at a younger age at a lower premium can potentially help you save on your premiums and divert these funds for other expenses or savings. Having life insurance is crucial to ensure that your loved ones are well taken care of if anything unfortunate were to happen to you.

4. Know your current life stage

The amount of coverage we need changes at different stages of our lives, as our life priorities and responsibilities shift. Having a clear idea of which life stage you are at, allows you to better plan out your finances and gauge the coverage you need.

For example, if you decide to start a family, getting life insurance becomes more important as you take on new responsibilities and commitments. The amount of coverage you need would also be higher than before to support your new priorities, such as paying off home loans and saving for your children’s education. 

If you happen to fall into this category, you may want to check out FWD Term Life Plus insurance, where you can get up to S$1.5 million coverage1 by applying online. Ensure that your family is financially protected so that you can focus on what matters most. Find out more about FWD Term Life Plus insurance or get a quote now.

Still confused? Contact us hereHave more questions that need answering? Speak to our experienced consultants to clarify further.

1 For customers aged 50 and below, you may purchase up to S$1.5 million coverage without medical check-up if you are in the pink of health. For customers above age 50, the allowable limit for purchase without medical check-up is S$500,000 sum assured.
This is for general information only and does not constitute financial advice. This is not a contract of insurance. You are advised to read the policy contract for details.
This article contains only general information and does not have any regard to the specific investment objectives, financial situation and the particular needs of any specific person. All insurance applications are subject to FWD’s underwriting and acceptance. This does not constitute an offer to buy or sell an insurance product or service. Please refer to the exact terms and conditions, specific details and exclusions applicable in the policy documents that can be obtained from our authorised product distributor. You may wish to seek advice from a financial adviser representative for a financial analysis before purchasing a policy suitable to meet your needs.
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. Buying health insurance products that are not suitable for you may impact your ability to finance your future healthcare needs.
This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the GIA/LIA or SDIC web-sites ( or or
This advertisement has not been reviewed by the Monetary Authority of Singapore. Information is correct as at 4 Aug 2022.
Posted in Insurance, Life & Health