Why Buy Through MoneySmart?Life insurance can sound daunting, but finding the right policy can be straightforward if you know your goals and options. Here’s a clear breakdown to help you make the best choice for your stage in life, your family, and your finances.
1. Identify your core objective
Pure protection (term life):
Offers coverage for a fixed period (e.g., until age 65 or 75). Payouts are given if you pass away or suffer a total and permanent disability within the term.
Most affordable way to get high coverage—term plans do not have saving/investment elements.
Example: Good for young parents with a mortgage and school-age children who need coverage until kids are independent.
Protection plus savings (whole life):
Provides lifelong cover (typically up to age 99 or 100) with a growing cash value that you can withdraw or borrow if needed.
Premiums are much higher (10–12 times that of term for the same sum assured), but you get both protection and a savings component.
Example: AIA Guaranteed Protect Plus (IV) offers multipliers for higher early coverage, cash value with guaranteed bonuses, and critical illness rider options.
Protection plus investment (Investment-Linked Policies/ILPs):
Lets you invest in sub-funds while enjoying insurance cover. Your cash value fluctuates with investment performance and is not guaranteed.
Good for those comfortable with risk, who want insurance plus potential investment upside.
ILPs are best for the financially savvy who are willing to monitor fund performance and accept market risks.
Choosing the right type comes down to your purpose—pure protection, lifelong coverage with cash value, or protection plus investment potential.
2. Calculate your coverage needs
Total up your debts:
Include home loans (HDB, private mortgage), car loans, student loans, and personal debts.
Estimate dependants’ needs:
Work out how much your children, spouse, or elderly parents will need until they can support themselves (e.g., children’s education costs, daily living expenses).
Factor immediate expenses:
Don’t forget funeral costs or immediate family support needs.
Subtract your resources:
Offset current savings, CPF balances, investments, and any existing life insurance (individual or employer group life).
Calculate your protection gap:
Coverage needed = (Debts + Dependant Needs + Immediate Expenses) – (Savings + Investments + Existing Insurance + CPF)
Example: If you have $830,000 in total obligations and $420,000 in savings/resources, you need about $410,000 in cover.
This method helps ensure your loved ones are fully provided for without over-insuring and paying more than you need.
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3. Factor in your life stage
Life stage | Recommended focus |
20s (young adults) | Affordable, high-coverage term policies. Consider an Integrated Shield Plan (IP) to upgrade MediShield Life for future health protection. |
30s–40s (families) | Increase coverage to protect income and dependents—prioritise death and critical illness cover, especially if you have a mortgage or young kids. |
50s+ (pre-retirement) | Focus on legacy planning (whole life), long-term care via CareShield Life supplements, and reducing coverage as liabilities shrink and children grow up. |
Review and adjust your coverage regularly as your financial situation, debt load, and family needs change.
4. Use comparison tools
Singapore’s online life insurance comparison tools are your best friend for checking prices, policy benefits, and product features side by side—all without sales pressure. Simply fill in your details (age, gender, coverage) to get matched quotes across insurers.
Check not just monthly premiums, but also coverage amount, included riders (such as critical illness or premium waiver), policy terms, and exclusions. Use filters for your budget and preferred policy type, and always read the policy summary before buying.
If your scenario is complex—say, blended families, high net worth, or advanced estate planning—speak with a licensed financial adviser to get expert advice before committing.
5. Final checklist before buying
Can you afford the premiums long-term?
Don’t buy more than you can maintain throughout the policy period—lapsed policies mean zero cover.
Have you considered necessary riders?
TPD (Total and Permanent Disability), critical illness and early critical illness can often be added as riders. Consider if you need extra cover for income interruptions due to health events.
Do you know about the 14-day free-look period?
After receiving your policy, you have at least 14 days to review and cancel for a full refund if you change your mind.
Did you read all the exclusions?
Know what won’t be covered—such as pre-existing conditions, high-risk activities, or suicide within the first year.
Are your beneficiaries up to date?
Always double-check you’ve nominated beneficiaries—this helps payouts happen quickly without legal hurdles.
