Important Benefits Of Life Insurance

Say you are a breadwinner to a family of three. You are happy to sustain the needs of your family. Suddenly, you caught the coronavirus bug. What will you do? You can no longer go to work! You cannot fulfill your work from home duties either.

Fortunately for you, you decided to purchase a life insurance policy prior to this event. Your critical illness is covered. Apart from that, how can life insurance help you in the future?

Firstly, there are two types of insurance such as whole life and term insurance. The latter is cheaper than the former. I will get to that later. Nonetheless, life insurance serves as your protection for unforeseen events, your shield for medical emergencies, and your extend relief after retirement.

The difference between whole life and term insurance is the amount of money you will have to put inside and the amount of money you will get back. Both policies provide protection in the event of total permanent disability and death.

Term insurance, true to its name, provides you with protection only for a fixed period of time (such as 20 to 30 years). The plan expires after the given term. If nothing happens to you and you do not make the claim, you get nothing. On the other and, whole life insurance covers you until you die. This is as long as you pay your premiums.

PROTECTION FOR UNFORESEEN EVENTS

Ensure that you will be able to support the needs of your surviving family with life insurance. When the income earner dies, there is a significant impact for the surviving family. There are possibilities when a survivor can provide for the rest of the family’s needs as well, but it is better to be prepared.

Keep the impact of death to minimum and provide your surviving family members with a source of income by arranging your life insurance plan.

SHIELD FOR MEDICAL EMERGENCIES

Whether you are single or married, having an emergency fund is vital to your life. You will never know when bad events such as this pandemic will occur.

Getting life insurance and having emergency funds are the best way to be ready for any emergencies. It will not only assure you but it will also prevent you from having an empty pocket when you drown in an unfortunate situation.

Some people might say that getting life insurance is like getting ready for your funeral. However, you may look at it as a means to prepare yourself for survival.

RELIEF FOR RETIREMENT

Using the cash value of your life insurance policy allows you to have an additional financial support once you retire.

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You may also use this money to indulge yourself, after you retire. Just ensure that you work within your means.

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How To Save Money In Your 20s

You are in your twenties! You may be thinking that you have the rest of your life ahead of you. Well, you are right. Whether you just graduated from university or are on your way to finish your final term, you can start sending out your Curriculum Vitae.

Finally! You landed your first full-time job, before the Circuit Breaker period started. During your first two weeks, you learned the rules of the trade. You were able to find your rhythm and your work tribe along the way. Then, you received your first paycheck.

You hold your hard-earned money in your hands. Suddenly, you felt like a kid in a candy store. You want to buy whatever you see with this newfound wealth. Are you going to blow off your paycheck in one day? Or, are you going to save it for the rainy days?

It is good to treat yourself every once in a while, but it is better to set aside some money for future expenses. You do not know what the future holds! With our crumbling economy, many establishments such as Robinsons department store have taken the hit. Robinsons stated that they will close some of its branches. Do not let yourself fall into the trap of bankruptcy.

You can do more in your 20s. Start with these tips:

ELIMINATE THE TEMPTATIONS

Food establishments have been gaining more limelight these days. Delivery services such as GrabFood and food panda had been earning a significant amount of money as many Singaporeans are stuck in their own homes.

To get a taste of the outside world, establishments lure potential clients thru social media. A box of donuts sounds as tempting as a buy-one-take-one milk tea. However, you must limit your spending and sugar intake. Eliminate temptations by reducing your time spent on social media such as Facebook and Instagram. These are filled with display ads. YouTube is not safe either!

CREATE A BUDGET

Budgeting is a system that keeps track of your cash-flow and enables you to stay within your financial capacities. Categorize your expenses based on your priorities.

Set aside a portion of amount on fixed expenses first. These fixed expenses include utility bills, rental costs, and transportation costs. Your variable or non-essential expenses shall follow suit.

INVEST A LITTLE

Investing can be intimidating, especially when you have zero knowledge about it! Money Digest has a wealth of articles related to investments. Start reading these articles.

Nonetheless, consider investing small amounts of money and letting a professional handle your portfolio. I am referring to Mutual Funds. Seek help by using the right tools. You can even invest as little as S$100!

Related: Cheap Investment Opportunities In Singapore

Cheap Investment Opportunities In Singapore

KEEP THINGS IN THE CART

What do you say to online shopping promotions? Not today, sir! It is easy to be trapped in the attractive promotions found online. Do you really need another phone casing or a night stand?

Billionaire music mogul Jay-z was once quoted saying: “You cannot afford something unless you can buy it twice”. Can you really afford two sets of AirPods? If so, is that necessary? You may want to wait a day or two, before you decide to purchase something from the shopping cart.

ACT WITH THE FUTURE IN MIND

Since you are making a decent amount of money these days, set some financial goals for yourself. If you want to travel next year as most of the international travel restrictions will be lifted, then you may start saving now. If you want to live on your own by the end of the year, then you may start saving now.

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Always act with the future in mind. You hold the key!

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Get covered for accidents and COVID-19 for less than $0.30/day

Get covered for COVID-19 and personal accidents for less than $0.30/day

Protect yourself and your family members from the impact of the novel coronavirus. The ongoing pandemic has means uncertainty for a lot of people. To cope with the health and financial challenges, SingSaver has launched a personal accident insurance policy with FWD to extend coverage for COVID-19.

The new and exclusive insurance product will cover infectious disease including COVID-19, Dengue, Zika and more at only $98/year — one of the cheapest in the market.

One of the highest limit/coverage for COVID-19

The policy offers coverage for the highest number of Infectious Diseases in the market. It also has the highest Death Benefits of $50,000; plus Guardian Angel Benefits and Funeral Expenses Benefits at $50,000 and $2,500 respectively.

That is not all. You will be covered with a $1,000 limit for inpatient and outpatient expenses and $25/day in hospital income for up to 365 days! ($50/day if you are admitted to ICU) Yes, you see it right. Insurance coverage for the entire year. (Most insurer has a higher daily hospital cash payout but has a cap of around 14 – 30 days)

With unlimited medical evacuation, you enjoy a peace of mind if you contract an infectious disease or met with a accident overseas.

No occupation loading

Working in an environment that carries more risk? Most insurers in the market impose occupation loading which increases the price by as much as 80%! You’d be glad to know that FWD does not impose occupation loading. (Yay, for frontline healthcare workers)

The plan also covers all personal accidents

The personal accident plan also covers all accidents. In the unfortunate event that there is an accident i.e. your Grab ride gets into a collision or a GrabFood rider on e-scooter knocks into you, you are well covered with this policy.

Frequently Asked Questions

  1. For hospitalisation due to accidents and COVID, cost of ward stay is excluded right? (i.e. I’ll need to have medical insurance for that instead)
    Covid19 – SG govt covers the hospitalisation ward stay, so the $1K medical expenses is additional $ for you. For other infectious diseases and Accidents, your ward stay can be reimbursed via medishield life/ integrated shield plan (the $1K medical expenses is additional $ for you).
  2. The plan covers me for 1 year. Anything to note if I want to renew?
    Usually renewal or buying a PA policy will ask some questions like Age below 65, never excluded from any PA insurance
    applications previously, etc.
  3. Does it cover accidents arising from car accidents? i.e. my Grab ride gets into a collision, or a GrabFood rider on e-scooter knocks into me
    Yes, it covers ALL ACCIDENTS – as long as it is an accident.

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Expenses You Must Never Swipe On Your Credit Card

I have to admit! Credit cards are convenient, especially at this time. However, swiping your plastic card often costs you more money than other payment options. Regular charges from interest rates and annual fees are coupled by hidden surcharges. The latter are transaction-based fees that can add up!

You must maximize your savings and use your debit card as much as possible. On that note, here are the expenses that you must avoid charging into your credit cards.

#1: EDUCATION EXPENSES

Most schools and universities accept credit cards as a form of payment nowadays. Some even offer attractive interest rates. Just because it is available does not mean you have to use it. During my time, a diploma course in a private institution costs S$10,000 a year. Imagine paying a 3.5% interest per month? This will accumulate to about 51.11% interest in an annum. This is too much, if you ask me.

#2: GAMBLING EXPENSES

Gambling addiction is inside the Psychological manual of Psychologists and therapists. Gambling is there for a reason! It poses an uncontrollable damage on one’s finances and relationships. If you are thinking of using your credit card to cover your gambling-related costs, you are in deep trouble. Go home!

Contemplate on the monthly interest rates you will have to pay on the top of hidden fees. The interest rate will shoot up continuously until you pay your balance in full amount.

#3: MEDICAL EXPENSES

Many experts agree that you must use your Government medical allowance, non-retirement savings, and available cash to pay for medical expenses. If the COVID-19 situation is tough for you, you may get a low-cost loan option too. Medical expenses can immediately put you in a mountain of debt. You cannot simply turn to your credit card to pay for your entire hospital bill!

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As you take in all the above information, it is important to know how to avoid surcharges. Follow these tips.

a. Use a debit card to pay for your retail expense as it directly deducts from your bank account. Another electronic service that rarely incurs fees is NETS.
b. Book your flights using travel points. Use your travel points or air miles when you book for a flight overseas.
c. Use vouchers when institutions do not accept credit card points or rewards.
d. Link your credit card to PayPal. PayPal allows you to link your bank accounts in one place. This way, you will be able to pay the merchant free of extra fees.
e. Search for other businesses that offer zero interest rates on credit card transactions.

May these tips help you shop around!

Sources: 1 & 2

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