5 Important Things to Consider When Buying Insurance in Singapore
Life is full of uncertainties and has a way of throwing unpleasant surprises at you when you least expect them. You may be at the top of your game in your chosen career and then suddenly get into an accident, preventing you from working for months. You may be the picture of health today, but later this year, you could get diagnosed with a challenging medical condition. For these reasons and more, insurance is essential as it can protect yourself and the people you love from financial burden if something unfortunate does happen.
The insurance industry in Singapore is experiencing rapid progress as more and more Singaporeans realise the value of financial planning and protecting the people and things they care about the most. If you also desire to buy insurance to have that important financial safety net, here are crucial factors that you need to consider to find the right plans to take out.
The Types of Coverage You Need
The first thing you need to consider before buying insurance is your needs. This way, you can get policies that are truly in line with those singular requirements. Otherwise, you might just waste your hard-earned money paying for plans that you will hardly use. Find out the kinds of coverage you need by assessing your situation and what you have, then figuring out which aspects of your life you want protection for.
For example, if you are the breadwinner in the family and your primary concern is protecting your dependents should you suffer from permanent disability or pass away unexpectedly, you might want to focus your resources on getting life insurance. Conversely, you might want additional funds for treatment and hospitalisation in the event that you suddenly fall ill. If so, you should look into health insurance plans. It’s also an option, of course, to take out multiple insurance products if you feel that you need coverage for more than one aspect of your life.
The Reputation of the Insurance Company
In the same way that you will not buy an expensive car from a dealer you know nothing about, you should also only purchase insurance from a reputable insurance company. The last thing that you need is to make consistent premium payments only to discover later that your insurer lacks the financial capacity to fulfil their contractual obligations and provide payout when you finally need the money. Find the right insurance provider by checking the following:
- Company history. There are hundreds of insurance companies in Singapore, so the easiest way to filter the top ones is by checking how long the firm you are eyeing has been in business, the number of clients they have, and the types of insurance they provide. The longest companies in operation are usually also the best.
- Credit rating. The credit rating of an insurer is another crucial consideration as it shows the company’s financial strength and ability to meet its financial obligations. Naturally, the higher the rating, the more reliable the company is.
- Claims statistics. Find out the claim to settlement ratio of the insurance provider you are eyeing to get an idea if the company is willing to provide the funds as promised when the need arises. A high claims settlement ratio means the firm is dependable and efficient in settling claims.
Insurance Coverage
Since the ultimate reason you are buying insurance is for financial protection, you should never commit to a policy without knowing what kind of protection you are paying for. Be sure to read and understand the coverage of the insurance plan you are considering, so you know the benefits you are entitled to, such as the maximum amount of payout the insurance provider will give you when you make a claim.
Policy coverage varies depending on the insurance providers. A life insurance plan offered by NTUC Income is not necessarily the same as Prudential’s life insurance, which is why you should always compare insurance policies from different companies to find the best one.
If you are looking to buy a life insurance product, you may want to check out the compareFIRST insurance information portal. Through this site, you can conveniently compare the premiums and features of life insurance products offered by all life insurers in Singapore.
Policy Exclusions
Apart from reviewing the benefits, features, and coverage of the insurance product you are eyeing, you should also find out the insurance exclusions or the cases not covered by the plan. You do not want to find out late in the game that you or your beneficiaries are not entitled to any payout after paying for the policy for years.
For instance, if your primary purpose for buying general health insurance is to help cover maternity costs if you get pregnant, you will be wasting your money. Unless you study your options, you would not know that maternity-related expenses are a standard exclusion in such a plan.
Your Budget
From life and health insurance to travel and retirement plans, there are numerous types of insurance products that can benefit you. But it does not mean you need to get all of them. Aside from considering your protection needs, it is also crucial to examine your budget. What is the use of getting several policies when the insurer terminates all of them because you cannot pay the premiums regularly? If you cannot afford to buy more, you can start with the most important and build on that.
Buying insurance is an immense financial commitment. That is why you should take the time to ponder on the things discussed above. When you understand the essential considerations when purchasing the right insurance plan, you will be in a better position to find a policy that will be most advantageous for you from a reputable insurance company in Singapore.
