5 things to do before you buy life insurance
A life insurance plan covers you against death, terminal illness, and total permanent disability. You can either buy term insurance that covers you for a fixed period or opt for whole life insurance that covers you for the entirety of your life span. Now, buying life insurance can sometimes be confusing. This is true especially if you are buying coverage for the first time. Having the right information on hand can ensure that you make the right decision when it comes to buying life insurance. To help you out in this regard, we have listed down 5 things to do before you buy life insurance. • Calculate how much existing debt you have If something unfortunate happens to you, your existing loans and debt will probably fall on the shoulders of your loved ones. They may not have the finances to afford them. Therefore, your life insurance payout should ideally cover all your existing debt. Take into consideration any loans you have including your mortgage, car loan, study loan and even credit card debt.
• Figure out your family’s expenses If you are the sole breadwinner of your family, you need to think about how your family will manage financially in your absence. So, your life insurance coverage should be an amount that can keep your family afloat financially for a considerable amount of time until finances stabilise at home. This way, they won’t be utterly bereft of financial resources. • Think about important long-term and short-term financial goals Do you have a home mortgage for the next 15 to 20 years? Is your child about to attend university in a year or two? These are some of the long-term and short-term financial responsibilities you need to keep in mind when buying life insurance. The coverage should be able to cover majority of these goals so that your loved ones can breathe easy.
• Explore various plans and its affordability Once you know how much coverage you need, it is time to explore the most suitable plans available. Look for an insurer who gives you sufficient coverage at affordable costs that meets your needs. Their life insurance plans should also have riders which you can opt in for to enhance your coverage. • Reach out to a financial consultant Buying a life insurance plan is a big, long term decision and one that must be made with due consideration. Therefore, make sure to speak with a financial consultant for professional advice before you choose a plan. This way, you can be sure of being on the right track when you get your coverage. A financial consultant will help you choose the right life insurance plan according to your needs, budget, and goals for the present and future. We hope that this blog will prove helpful when you set out to buy life insurance in Singapore.
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