7 Mistakes To Avoid When Buying Life Insurance in Singapore

7 Mistakes To Avoid When Buying Life Insurance in Singapore

Choosing the right life insurance in Singapore shouldn’t be a hassle. Yet, with so many options and details to consider, it’s easy to feel lost. This blog is here to shine a light on the most common slip-ups people make when picking a life insurance plan. By steering clear of these mistakes, you’ll be on your way to securing coverage that matches your needs. Let’s dive in and ensure your life insurance journey is smooth from start to finish.

1. Not understanding policy types

Understanding the types of life insurance available in Singapore for expats is crucial for securing the right coverage for your unique needs. There are three main types, catering to different life stages and financial goals, emphasising the importance of making an informed choice:

  • Term Life Insurance: Provides a lump sum payout in events like permanent disability or death within a specified term. It’s portable, affordable, and flexible, allowing adjustments to payout sums as life circumstances change, such as taking a mortgage or having a child. Ideal for expats needing adaptable financial safety nets.
  • Critical Illness Insurance: Essential coverage that pays a lump sum upon critical illness diagnosis. It covers 36 critical illnesses, including early-stage cancers, with options for multi-claim policies. This insurance is crucial in Singapore, where healthcare costs can be high, ensuring you and your loved ones are protected financially.
  • Income Protection Insurance: Offers a percentage of your pre-tax monthly income if you’re unable to work due to illness or injury, providing a financial safety net until you can return to work. It doesn’t cover employment termination or redundancy but is vital for expats as the sole breadwinner, ensuring living costs are covered during periods of incapacity.

Grasping these distinctions ensures you can align your choice with your current circumstances and future aspirations, making an informed decision that safeguards your and your family’s financial well-being.

2. Underestimating coverage needs

Underestimating coverage needs can significantly impact your financial security and leave your loved ones vulnerable. It’s essential to accurately assess the level of coverage required, taking into account lifestyle, debts, and the future needs of your dependents. This careful consideration ensures that you choose a life insurance policy that provides comprehensive protection, safeguarding your family’s financial well-being in your absence.

3. Mishandling ownership and beneficiaries

Incorrectly setting up policy ownership and beneficiaries can lead to unintended outcomes, potentially complicating the distribution of benefits and causing legal issues. For example, if a beneficiary designation conflicts with a will, it can create legal battles, causing financial strain on those you aim to protect. Ensuring these elements are properly established safeguards against these risks, guaranteeing your life insurance serves its purpose effectively for your loved ones.

4. Overlooking health and lifestyle changes

Health and lifestyle changes, such as improved fitness, quitting smoking, or a new chronic condition, can significantly affect life insurance needs and premiums. These changes may qualify you for lower premiums or necessitate increased coverage to match your new circumstances. Regularly reviewing and adjusting your policy ensures it accurately reflects your current health status and lifestyle, providing the right level of financial protection.

5. Procrastinating the purchase

Delaying the purchase of life insurance can lead to higher premiums and may limit your eligibility for certain plans as you age. Since age and health are key factors in determining your insurance rates, securing a policy earlier in life typically means more affordable premiums and better coverage options. This early decision can ensure financial security for your loved ones without the added burden of increased costs over time.

6. Lacking a clear objective

Having a clear objective for your life insurance is crucial for finding a plan that truly fits your needs. Whether you’re looking to protect your family, accumulate wealth, or cover specific debts, understanding your primary goal guides you in selecting the most suitable coverage. This clarity ensures the life insurance you choose aligns with your financial strategy and life goals, providing peace of mind that your and your family’s future is secured according to your specific desires and requirements.

7. Buying on impulse

Buying life insurance on impulse can lead to choosing a policy that doesn’t fully meet your needs or results in overspending. Without adequate research or professional advice, there’s a risk of missing out on better-suited options or more competitive rates. Taking the time for thorough comparison and consultation ensures that your life insurance decision is well-informed, tailored to your specific requirements, and financially sound.

How Diot-Siaci Asia can assist

How Diot-Siaci Asia can assist

Diot-Siaci Asia specialises in providing tailored solutions for life insurance in Singapore. Our expertise ensures you avoid these common mistakes, offering personalised service to find the right life insurance protection for you and your loved ones. 

Reach out for a quote to see how we can help secure your financial future and provide peace of mind for you and your family. Our range also includes top-up and maternity insurance options, ensuring comprehensive coverage throughout your stay in Singapore.