For many, the primary intent of having life insurance is for the purpose of protection. However, it can also be used as a savings vehicle over time.
Here are 6 solid reasons why you must have life insurance:
1. Protection and peace of mind
Life today is full of uncertainties! The continuity of coverage gives you and your loved ones a certain quality of life and prepare against any unforeseen circumstances. You get to enjoy the same level of protection and coverage stated in your policy even if your health conditions have changed over time. This means you will always have peace of mind!
2. Planning for life stage needs
Life Insurance provides financial support over life's many milestones. With proper financial planning conducted at each life stage, milestone events, such as securing your dream home, setting up a family, your children's education, their marriages or planning for your retirement are achievable.
3. Protection plus savings over long-term
With a participating policy, you can ride on the prudent investment strategies of insurers to meet both your protection and long-term wealth accumulation needs.
4. Growth through dividends
Risk-averse individuals can choose to set aside money in a policy which participates in an insurer's participating fund. Such policies have potential investment returns in the form of annual dividends or bonuses which are added to the policy. These dividends or bonuses are non-guaranteed and the amount declared, if any, depends on the performance of the insurer's participating fund.
5. Loan features
Certain life insurance policies give you the option of taking a loan against your policy after it has acquired cash value. However, do note that a certain quantum of interest is chargeable on the policy loan and you should always check with your insurer on the rate of interest and the available repayment options.
6. Tax Relief
In Singapore, Life Insurance Relief is provided on annual insurance premiums paid on life insurance policies bought on your life and for a man, the life of his wife, subject to meeting conditions set by the Inland Revenue Authority of Singapore (IRAS). You can find out more from IRAS's website.