Asked 3w ago
If I'm single, there won't be anyone to receive the payout so I don't really know what's the incentive for getting a life insurance policy
You do not require death payout if you won't plan to have any dependents, but you should definitely get income protection cover (CI and Disability Income) and Long Term Care insurance as they'll pay you when you're alive but can't make an income.
If youre not planning on having any dependents then ur need could be limited. Limited but Income protection would be extremely important, in case you fall sick (critical illness).
And a health plan for hospitalisation. Its really great being single because no one depends on you but the down side is that you won’t have anyone to depend on. Who’s going to take care of the hefty bills then?
And of course for retirement, you would want to still have a steady cash flow that keeps coming in.
Life insurance self insures after a certain time frame. Typically after 25 years. This is to avoid paying for insurance once you retire. Life insurance often combines disability and critical illness, which are what you need even if you are single.
Disability income criterias are not easy to hit, as such I suggest a lump sum payout instead. Get total permanent disability lump sum payout and add disability income as a rider if you really require it.
It depends really. I think it is a misconception that you don't need life insurance if you are single. This is because being single and having dependents have nothing to do with each other. Let me explain.
You could have dependents if you repaying a loan with some. Or if you are a joint debtor on your brother's/sister's mortgage. In case of an unfortunate event, would your loved ones be able to cover the monthly installments on their own? If you have a bunch of invidvidual loans but your assets are less than your total debt, the burden of repayments could be passed on to your next of kin.
Also, being single means you have to handle cost many costs on your own. What if you were diagnosed with a critical illness or accidentally become disabled? You could lose your income and lose the means to support yourself. In such a scenario, a life insurance plan with critical illness & disability coverage would help you out tremendously.
Moreover, what if a few years down the line you do decide to have a family. Then having a life insurance plan would become prudent, but it would also become more expensive. Not to mention, getting a plan could be more tedious as you would have to go through several medical tests to get coverage.
So if you do decide to buy a life insurance policy, you can read through this blog to help you choose the right plan: https://justpaste.it/2evp3
You should be looking at getting coverage for Total Permanent Disability, Critical Illness and Early Stage Critical Illness, which a whole life insurance policy would provide coverage against it for the whole of life.
However though you would not require the death payout, most policies have that component inbuilt into them.
Definitely not, I didn’t buy any life insurance despite many agents telling me to. I have no need to leave behind a legacy despite me having loans for hdb and many other things. I have enough money to cover everything else in the event I’m dead and I personally believe leaving no more than what is needed. After all what is the point of paying so much just for another person to use it when I’m not even alive. The next person would do it too and the insurance companies forever holding on the money
I'm not an expert on insurance.
But my feeling is, life insurance is an investment.
I gather it's a structured investment,with risks/costs/benefits difficult to comprehend for laymen. What would be the annualized performance, then? Are there numbers?
(if the issuing company doesn't default during Your cycle).
And when there are those numbers, would a well diversified passive investing ETF dollar cost averaging Buy&Hold approach DIY style would be inferior to that performance ?
My feeling is: not.
It really depends on your life stage and age. If you're at the age of settling down by yourself, then that's fine but your decision to stay single may change at some point.
You will want to get a multi-pay CI plan because the flip side of not having dependents is that you'll have to fork out medical expenses yourself if need be.
Financial planning is an integral part of life. You can reach me here to find out more.
Generally, life insurance coverage can be split into three life's major event,
Total & Permanent Disability
There are a couple of factors that we need to clarify and plan before we can establish whether there is a need for death coverage if you are single. For example, do you have any dependents? Do you have any liabiltiies?
Based on the latter example, just because you are single doesn't mean that your liabilities will be written off upon death. Therefore, there exists a need for proper estate planning to this end.
Total & Permanent Disability
Since you are alive and continues to live, there exists a need to be insured.
Similar to the rationale for Total & Permanent Disability, there exists a need for you to be insured.
On the whole, these are general guidelines which may or may not work for you. Therefore, you are encouraged to conduct comprehensive financial planning. Through this process, it ensures that we are well-planned ahead in life.
I share quality content on estate planning and financial planning here.
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