how much life insurance do we need?
By applefreak
@applefreak (3130)
Singapore
July 16, 2008 10:24pm CST
came across this article from another website (http://www.qotion.sg/tips-personal-insurance). i remember seeing a few discussions on how much life insurance should we buy. i'd like to share this article with fellow mylotters. do tell me if you find that this article is good or not. personally, i've got life insurance for almost 10 years of my income.
[i]It depends on your personal circumstances. If you have dependents, you should aim to insure for 5 to 10 years of your earnings. If you have accumulated savings, the insurance cover can be reduced by this amount.
For example, if you earn $40,000 a year, you should have life insurance for $200,000 to $400,000. If you have accumulated savings of $50,000, this can be reduced from the amount of your insurance.
As a minimum, you should insure for 5 years of earning. If you are able to afford it, you can increase your coverage to 10 years of earning.
The sum assured is payable on death and permanent total disability.[/i]
2 responses
@applefreak (3130)
• Singapore
17 Jul 08
i believe all of us should get some personal insurance. i've got corporate insurance but i still got myself a couple of personal policies. corporate insurance is only valid when you are still with the company. what will happen if something dreadful happens when one is between jobs? getting a term life insurance policy is quite affordable and a must-have for people with dependents. cheers and all the best to you. 
@ahgong (10064)
• Singapore
21 Jul 08
I never really thought about getting insurance to cover me for the number of years of my salary like you did.
Hmm... looks like I need to re-evaluate my premiums already.
Thanks for the article. I have schemed through it and found it plenty useful.
Copied and saved a copy for further references.
So, in your opinion, which insurance company has the best coverage todate?
@applefreak (3130)
• Singapore
22 Jul 08
well now that you are married, some of your priorities have definitely changed. if it is possible, try to insure 100% for both of you for the HPS. it's really cheap insurance that can be paid by CPF. at least the flat will be fully paid for if anything happens to either one of you. it's really tough to have to take care of your spouse, bring home the bacon and still pay your share of the housing loan. cheers ;p
@applefreak (3130)
• Singapore
21 Jul 08
actually there is no insurance company that offers the best coverage. it all depends on your needs and wants. different companies offer different benefits so it's really important for you to sit down and examine your needs. personally, i'd recommend a term life insurance coverage to top up the difference in coverage. it has the cheapest insurance premium for the largest coverage. the difference in premium compared to endowment plans can then be invested according to your risk appetite. this is what i am doing currently and i find that it works for me. however, if you prefer not to do your own investing, then a life policy will be good. cheers ;p
