Life Insurance Policy Guide | Understand Insurance Policy in Singapore

Insurance | Life Insurance

Have you bought a life insurance policy recently? Understanding insurance policy is a life skill that should be taught in schools. To lose your hard-earned money due to a bad insurance policy is a nightmare! In this blog, we bring you a Life Insurance policy guide in Singapore. Read on to find out more… It will be less tedious than doing mole calculations in chemistry or, worse, social studies propaganda.

Life Insurance Policy Guide in Singapore 

How to Read a Product Summary for Insurance?

Your insurance product summary has the key features of your insurance policy briefly. It will usually start with a table on the first page, followed by a breakdown of the main coverage categories. If you proceed to the end of the document, you may find information about your premiums. As well as other information such as loyalty bonuses, etc.  Carefully read the document each time you buy or renew a policy. This will prevent missing out on a claim when you could have. It is a good idea to highlight the titles of the major categories of coverage. So, you can see at a glance what you can make claims for.

Insurance policies appear to be gibberish at first glance. But once you get used to a few commonly used terms, you’ll notice that they always harp on the same few things. Here are a few of the common terms you will come across frequently.

Co-Insurance

It is the percentage of your bill that you must cover on your own and that the insurer will not pay. Most commonly seen in hospitalization insurance. For example, hospital bills are paid both by the insurance company and the customer.

Benefit 

Benefits include the incidents and circumstances against which you are protected. If they occur, you will be compensated by the insurance company. For example, if your plan includes hospitalization benefits, you will receive (an) insurance payout(s) if you are hospitalized.

Claim 

You can file a claim to receive the coverage provided by the insurance policy. For instance, if you purchase travel insurance for a trip and your flight is cancelled with no refund, you can make a claim for the cost of your airline tickets.

Cash Value

This is the amount of money accumulated by hybrid life insurance policies. For example, whole life insurance, endowment plans, and investment-linked insurance over time. You will receive the cash value of your policy when it’s the payout date, or when you surrender your policy.

Conditions

The terms and conditions of any insurance policy are your and the insurer’s obligations and responsibilities. If you do not meet all of these requirements, you may lose your insurance coverage.

Understand a Benefit/Policy Illustration

The benefit amounts you will receive in various situations are shown using tables in policy illustrations or benefit illustrations. This document is typically given to life insurance policyholders. And may contain information such as your estimated insurance premiums if you renew your policy (for term insurance). The benefits table for cash-value policies (i.e. hybrid life insurance plans) will show how much you will pay into your policy. It will also show your projected non-guaranteed returns and estimated surrender value over time.

Keep the policy illustration document handy when planning your finances. As it can help you plan for the future by anticipating your future premiums or returns. Don’t take the numbers too seriously, because any estimates or non-guaranteed returns are not set in stone.

Read a Table of Insurance Premiums

The premium table shows how much you’ll have to pay in premiums over time. For example, if you have hospitalization insurance, the premium table will show you how much you need to pay. It will be based on your age, and you can plan ahead of time to avoid hikes in premium.  As you enter the next age bracket, the premium you pay will also increase. Read the premium table because it will show how our insurance costs rise as you age. You can also use your premium tables to compare insurance policies from different insurers. This can help you switch to a better plan.

Read the Insurance Policy Exclusions Carefully

To avoid unpleasant surprises, it is always a good idea to review the list of policy exclusions. You don’t want to pay insurance premiums year after year only to find out in twenty years that your hospitalization policy had been excluded.  Consider policy exclusions before buying an insurance policy.  Different insurers may offer you similar policies but carefully read the details. One of the policies may have generous offerings as compared to the other. This Life insurance policy guide will help you to comprehend your insurance easily.


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