Jo-Ann Huang of Channel News Asia reports that Singaporeans are grossly under-insured:

Insurance is all about protecting against the unforeseen but studies have shown that Singaporeans are 11 times underinsured.

Experts said underinsurance is most common in adults aged 29 to 45 and young professionals and families with young children are more underinsured than others.

According to experts, more immediate financial commitments such as daily expenses and education may prevent one from being adequately insured.

Tan Hak Leh, President, Life Insurance Association, said: “They may neglect to have in place the proper financial planning to take care of the needs of the family should something unfortunate happen to them.

“The critical financial products that can help their ongoing needs such as the education fees for their children, and the daily expenses should something happen to the key breadwinner of the family.”

Studies showed that a healthy individual requires almost S$500,000 of coverage in case of death, critical illness or disability.

But most Singaporeans are insured up to only S$48,000.

Other financial advisers said younger Singaporeans would rather earn returns than invest in protection.

Raymond Ng, President, Association of Financial Advisers, Singapore, said: “The younger Singaporeans will feel that their priority of life is different. That is where the adviser has to advocate the needs based selling and to advocate the concept of insurance.

But financial advisers agreed that paying premiums over a lifetime could be costly.

For example, a healthy individual in his or her mid 20s is required to pay more than S$90,000 of insurance over 45 years.

This will give them sufficient coverage of S$500,000 until the age of 70.

But advisers said it is a small price to pay to avoid leaving your loved ones in financial difficulty.


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