What are the 7 good things about term insurance
Term insurance offers coverage for a fixed period of time starting from a minimum of 5 years to a maximum of 30 years. You can also choose to obtain cover up to a certain age, for example 65 or 75 years of age.
Term insurance is perfect for people who prefer to have some flexibility in the duration of their cover and getting protection for a certain number of years based solely on their needs. Term insurance policy can be very comprehensive in protection. There are enhanced covers provided in the form of riders. Riders act as additional benefits that the life assured can choose to add to the policy. If you are thinking of signing up for term insurance, here are the attractive features that can help you decide.
1. Financial security for you and your family
The term insurance will provide coverage for you and your family when you pass away. This offers financial security for your family in the event of your passing as the death benefit or sum assured is paid out. Term insurance can include additional benefits while the insured is still alive, as a range of riders are available with different add-on coverage. This could include coverage for critical illness or disability. In a way, you are paying a premium for a benefit that can provide security to your loved ones in the years that matter.
2. High Coverage for Low Premium
Term insurance policies come with smaller premium amounts and are cheaper than life policies such as Whole Life policies. Term Insurance does not accumulate cash value and as a result, they are suitable for anyone who wants to focus on obtaining high coverage without having to spend a lot. A Whole Life policy will cost more to provide the same amount of coverage, as it accumulates cash value over time.
3. Buying coverage for only a period of time
As one of its attractive features, term insurance can be purchased so that you have cover only in the years that you require. For instance, term insurance is useful for events such as:
- Buying a properly (the policy term can cover up to when your mortgage is expected to be paid for);
- When one has a new-born child (the policy term can cover up to when the child is expected to be financially independent);
- Wanting to provide for the education of your children (the policy term can cover up to when the child is expected to complete University)
and many more. When choosing the policy for your term insurance, choose wisely on how long you would like to be covered for.
4. A renewably policy
It’s possible for you to renew and extend your term insurance policy after it ends without any further medical underwriting. Bear in mind that after the original coverage period is over, it will cost you more to purchase the policy for the same amount of sum assured due to you being at an older age.
The older you are, the higher the premium. If customers do not make claims throughout the policy term, it is possible for the insured to renew up to 84 years, depending on the insurance company. Take a look at the popular NTUC policy here .
5. Great for young working adults
Term insurance is a popular choice among young adults, especially newlyweds, young parents and young professionals that just joined the workforce. Since a term insurance premium could cost as little as 1% of their annual income, many young people choose term insurance for its affordability.
6. Option to convert the plan into a whole life plan
Some insurers offer customers the option of converting their term policy to life insurance, such as Investment-Linked Policy or Whole Life Policy without medical underwriting. Young adults, who don’t have spending power, can purchase term insurance. When they have built up enough savings, they can convert the term insurance to a life insurance policy.
7. Availability of Additional Benefits/Riders
Riders are additional benefits that can be purchased to enhance the coverage of your term plan that pays in the event of death. There are a wide range of riders available for several insurable events. Depending on the risk covered, the price of the additional benefits could be small. Examples of typical riders you can include are:
- Total and Permanent Disability
- Critical Illness
- Early Critical Illness
- Disability Income
- Waiver of Premium
Find out more about the benefits and coverage of Term Insurance
If you are interested in purchasing a term insurance policy, you can learn more about the product here. Also, you can do a quick needs analysis to find out how much insurance cover you really need. Click here to get an immediate quote and see the best term insurance options available to you in Singapore.
InsureDIY has financial advisers that can help you make the right choice and answer any of your questions! For more information on the benefits and coverage of Term insurance, you can contact us at [email protected].