While it’s true that getting life insurance becomes more of a necessity when you have dependants, even if no one is relying on you financially, you still have yourself to think about.
To help you get a head start on selecting an appropriate life insurance policy, we’ve asked insurance industry professionals to weigh in with their perspective on the best policies available.
Here’s a comprehensive look at life insurance policies:
What are the best types of policies today for the younger generation? (Age range: 21-35)
There isn’t one specific type that you ‘need’ to have; this is because procuring insurance depends greatly on your current situation.
For instance, life insurance is particularly necessary if you have dependants, but your budget will dictate the type of policy you can purchase.
Generally speaking, if you have a lower budget, an e-policy (insurance policy purchasable online) like the one offered by UforLife can serve as a cost-friendly solution.
Is life insurance as important as medical insurance?
Your hospital bills can easily eat through your savings, even with minor health issues. Since life insurance indemnifies your life only and not just medical costs (if you opt for a critical illness rider). In this respect, both are important policies.
It is best to get a regular term life and medical card separately, so you will pay for exactly what you need and important to you with wider options available.
How is purchasing life insurance online changing the way people take out policies?
At present, it gives consumers the option to secure regular term life insurance which is less costly than an investment-linked policy, or other policy that has a cash value attached.
As a result, the premium from life insurance online is also more manageable, and easy to be understood and processed. Due to all this greater benefits, we are likely to see an increasing number of first-time life insurance policy buyers become part of the market even if they are in the rural areas, as long as they have internet access to apply without going through any agents.
Other than the obvious benefits of buying life insurance online (less costly to obtain, convenient), do you see any other positives?
The best part about e-policies is that people now have the alternative option to buy basic life insurance and enjoy an elementary level of coverage.
Unfortunately, it has been the experience for most, that insurance agents hardly make the push for regular term life insurance policies. Thus very often, the opportunity to purchase more affordable life insurance policies is not even being presented.
As an industry professional, what do you look for in a life insurance policy?
The main concern for someone within the industry and the everyday consumer alike is cost firstly, and coverage, second.
Life insurance is cheaper at its most basic, but there are other benefits to buying ‘basic’ coverage, such as:
You can buy a greater amount of coverage as your funds are focused on insurance alone, not investment-linked.
Financial resources are more fluid and not tied up with other types of policies that have a cash value.
Excess funds can be used to invest elsewhere.
Therefore, in some respects, it would be better to simply get a regular term life insurance, with online policies being an even cheaper option if calculated without an agent’s commission.
So does this mean it makes better financial sense for the younger generation to treat life insurance policies and investments separately?
We can’t say that one is better than the other because it would depend primarily on the individual’s risk appetite and budget.
Moreover, it takes effort, time and knowledge to invest your money by yourself. You’ll also need to consider investment management fees if you choose to get a professional to take care of your portfolio.
Nevertheless, keeping the two separate will definitely give you more control over your resources than if you were to merge them.
What is your take on step-up rated premium plans?
It makes getting started a lot easier, and is preferable to not buying any insurance at all. Basically, step–up rated premiums are lower in the beginning stages, but will increase with time.
For example, you are most likely to still developing financial stability during your 20s - 30s while having car & home loans commitment to start up your life. The reasoning behind this type of payment plan (as offered by UforLife) is that as your financial foundation grows stronger, your ability to cover the higher premiums should also increase.
With fixed rate premium plan, you pay more in subsidizing for your old age no matter what your current age is, it might be ok for some people but not everyone in general.
What do you see for the future of online life insurance policies?
We expect that first-time buyers, younger people and those from low to medium income groups will be better enabled in the next few years to buy life insurance.
However, it is unlikely that the majority will completely abandon insurance agents; rather, we look forward to buyers being educated and empowered to ask their agents for regular terms and online insurance options.
What kind of complications do you expect to arise from having life insurance purchased online VS through an agent (if any)?
Mainly, one obvious trade-off is how the responsibility for information regarding insurance policies will fall on the buyer.
Nonetheless, with providers like UforLife, this is not a major issue, because they have simplified the process to make policies easy to understand.
Moreover, consumers will be equipped to evaluate their policies and make adjustments accordingly with online calculator tools. This too can support new buyers to make good financial decisions.
Additionally, insurance agents need not be left out when it comes to online policies. They can in fact fill the gap by recommending such policies and still provide servicing support to policyholders.
Some are discouraged from getting life insurance because they assume that the costs will be high. But this does not have to be the case, especially since companies like UforLife are paving the way with relatively inexpensive e-policies.
So if you don’t already have a back-up plan in place, do consider buying life insurance. Even a basic policy can help keep your loved ones and yourself, financially protected.