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Coming to Terms with Term Insurance: 5 easy steps

Posted 23 November, 2015 by Clearly
in Educate Yourself
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Selecting Term Insurance: Hardly rocket science

Regardless of any particular life stage you are in, it is a good bet that it will be hectic and pretty much time deprived. Amid the demands of work, family, and social commitments, it is pretty easy to lose track of perspective – and life can turn topsy turvy at any given moment.

Planning ahead for any tragedy does not make it happen any sooner (or even at all), but it provides you with a peace of mind that everything will be taken care of on the financial front no matter what happens. When it comes to raw cover, no insurance plan beats Term Insurance in terms of bang for buck. Dollar for dollar, Term Insurance gives a level of protection that is sufficient without breaking the bank.

If you are in the marketing to buy Term Insurance for yourself or your family, here are 5 easy steps to assist in your decision making.

 

Step 1: Back to Basics – Understand the product

 

Term Insurance is often touted as no frills insurance for a reason. It is simply insurance in its most basic, bare bones form: Exchange Premiums for Protection, for a pre-agreed period of time. Because the time frame of most Term Insurance plans can be set between 3 to 30 years (or more), it is an easy way to address any gaps in your cover for any period of time. Furthermore, it allows you to pick up other coverages like Critical Illness together with the Term Insurance.

 

Step 2: The early bird gets the worm – Start early

 

It is definitely possible to pick up Term Insurance at almost any age, but once you are financially and psychologically ready to pick up insurance, it pays to acquire it while you are young. While its easy to think that by acquiring it later in life, the premium in the earlier years can be saved, these savings actually do not make up for the more expensive premiums in later years. Furthermore, your health conditions may change (for the worse), and it is harder to get Term Insurance if you wait.

 

Step 3: Know thyself – Understand your current situation

 

The main objective of insurance is to provide you or your family with an income or financial ability to maintain a certain level of living standard regardless of what happens to you. So the amount of cover you may require could vary from each life stage. Take a cold hard look at your financial obligations : Are you raising a family? Do you have any financial dependents? Chances are you need far more financial protection compared to a single person. Evaluate your current assets and income versus any debt or mortgage payments that has to be serviced, so you have an idea of any shortfall and select a plan size accordingly.

Do bear in mind that situations change, and that inflation does set in – so a good rule of thumb is to have a review every 3-4 years.

 

Step 4: Knowledge is power – Some factors matter more

 

Your Insurance premium will vary according to your age, occupation, family history and lifestyle habits. Since Insurance is all about calculating the probability of dying and risk of serious illness, it makes sense that people who maintain a healthy lifestyle of not smoking, keeping a their weight in check, exercising regularly and not drinking excessively will command lower premiums. However its crucial to be entirely truthful in any insurance application as this affects the validity of the policy.

 

Step 5: Shop till you drop – Compare your options

 

Term Insurance (or most Life Insurances for that matter) is still a commodity, like water. The analogy is especially apt because like water, it is crucial for life yet readily available. While some of us may consent to paying for “designer” water in restaurants and pubs, most of us are happy enough to order the free version whenever possible. The difference between various insurers in Singapore could be up to 40% or more, so it makes sense to compare prices before purchase.

Term Insurance is ideal for comparison because of its simple nature, and it is readily understood in a matter of minutes. You wont go wrong checking our comparison section – a few hundred dollars saved is a superb use of 2 minutes of your time.

 

In Conclusion

 

If you already have an intention to purchase insurance cover, congratulations. Getting the selection process over and done with is the next step. Once it is struck off your to-do list, you are then free to focus on the here and now, safe in the knowledge that firm action has be taken to protect your family for the long term. We hope that by following our 5 step guide, you will be equipped with the know-how to make the best decision possible.

Do you have any difficulty when it comes to selecting Term Insurance? Do let us know in the comments below!

www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

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