Take your time, and don’t peek at the answer before you give your own response!
Whether you are an insurance noob or a seasoned industry veteran, we guaranteed that you will have fresh insights on Insurance like never before.
1. What’s best way to shop for Life Insurance?
A – Meet with your financial planner and follow his recommendations
B – Conduct your own research and determine the insurer, plan type, and coverage amounts that is best for you
C – Use an online comparison site to search out the best prices
D – All the above
You may have your own planner, but it never really hurts to be more hands on. No one single planner actually represents all the Insurers in Singapore, so you are really doing yourself a favor when you shop around for your best interests.
As we like to say, knowledge is power. Oh yes, did we mention that you can compare Life Insurance plans here?
2. What is the key determinant of premium rates for Life Insurance plans?
A – The number of financial dependents you have
B – Your occupation
C – Your annual income
D – Your age and health status
As a rule of thumb, Insurance gets more and more expensive as you get older and as your health deteriorates. While your occupation could also influence the premium (e.g. an oil rig worker faces more hazards than an accountant), the difference is not staggering as compared to age and health conditions.
It would probably help to quit smoking too.
3. What is the right amount to spend on Life Insurance each month?
A – It depends
B – Nothing more than 500 dollars
C – 7 -15% of your monthly income
D – 2-3% of your monthly income
You might be forgiven to think that C might actually be reasonable. In all fairness, it is, since we found that out based on this article here.
But actually, there is no such constraint that should really be imposed. Some people may prefer to do their investments via insurance, which bumps up the overall figure. Bottomline is, you need to be the judge as to if the spending is sensible or not.
4. What is the biggest factor to determine how much death cover to purchase?
A – Final expenses and burial costs
B – Funds for the surviving spouse to readjust and move to a new house
C – The amount that is needed for your financial dependents to maintain their quality of life
D – 10X of annual income should be plenty
Death cover is meant to allow those reliant on you for financial support to continue enjoying a certain standard of living. This would include education fees for your children, or nursing care for your parents, for example.
10X of annual income sounds plausible, but it does not really affirm if the death cover is sufficient or excessive. To get a better idea, use our Discover Engine to find out once and for all.
5. On what grounds may a Claim be denied?
A – When the claim amount is humungous and the Insurer doesn’t want to pay
B – When there is material misrepresentation during the application process
C – If you are unable to produce the original policy documents
D – When there is no stated beneficiary in the policy
Life Insurance is a contract, and as long as you keep up your end of the bargain, the insurer will keep theirs. Other than just dutifully paying the premiums, you also have to be truthful when applying for the policy. Leaving out material details like past health conditions and medical treatments could well be grounds for a voided policy.
Here is one such example that cost a policy holder more than 32,000 in claims because of an omission.
But take heart, even if insurers turn the claim down, there are always avenues for redress. We examine a case that was famously turned down by the insurer and then upheld by the law.
6. Which group of people listed below are not suitable to receive Insurance coverage?
A – Everyone needs insurance
B – People older than age 50
C – People younger than age 3
D – People who are single and have no dependents
Even from child birth, it would be prudent to start the child off with at least a hospitalization plan and perhaps a small amount of cover. This is because you may never know if he or she may develop health conditions in the future that exclude them from being able to buy insurance.
Likewise for those above 50, it is never too late to have cover, especially if they want to leave behind a legacy or ensure that their medical bills will always be taken care of.
Singles need to take care of their own financial coverage too! *Cough-Critical-Illness-Cough*
7. True or False: Life Insurance is too costly
For the love of God, this is obviously false. Insurance can be cheaper than your daily cuppa. We dig out 8 other things more expensive than insurance that may surprise you.
8. True or False: I have to die for my family to receive benefits from my life insurance policy.
False. Things like hospitalization cover, Critical illness cover, and disability insurance all pay out while you are still alive. Those benefits allow you to recover, or spend more time with your family at the very least.
9. True or False: Once I bought a life Insurance policy, I will never have to worry about it again.
Again, false. Like fashion, policies can become outdated or not applicable to its original purpose anymore. During key life events like marriage, the birth of a child, or a career switch, it would be helpful to review your coverage and policies to see if they are still relevant.
In fact, we recommend that you approach your advisor at least once every 2 years.
10. True or False: Insurance is something you can buy at any given time
If you are sensing a theme here, you are most observant. Insurance CAN be something that you can buy at any point in your life stage, but it is dependent on you having good health. Since looking into the future is one thing that we humans cannot do very well, we have to categorically state that Insurance cannot always be bought as and when you choose. So, false.
(Buy your insurance early, while you still can choose)
11. True or False: Group life insurance through your employer is sufficient
Alas, false! Your workplace could give you great insurance benefits, especially if you are a senior employee. But that all comes to a crashing halt the day you stop working. While you may intend to keep working, the company could have other ideas (like downsizing, or restructuring) at the most inconvenient times.
Always good to have coverage that you can truly call your own.
Putting it all together
How did you do? Did some of the answers surprise you?
Actually, the results do not matter in the slightest.
What really matters is that you take this knowledge (new found or otherwise) and put it into practice. That means reviewing your coverage. That means having conversations with your financial planner. That means reading up more about Life Insurance and how it impacts your life.
At the end of the day, the purpose of this quiz is meant to prod you into thinking, and then taking action.
What then, are you waiting for?
(If you don’t have a trusted advisor, we will be happy to hook you up. Just drop us a message here)
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.