Insurance can be a very good investment option if chosen carefully and wisely. Infact a good number of professionals and traders in Singapore consider insurance to be the best option for a risk free investment.
Life insurance is one of many types of insurance that are gaining popularitiy among the working adults of Singapore. By investing in a life insurance policy, a person can effectively transfer the financial risks of dying early and ensure guaranteed payout for the family members who might otherwise be left in some sort of economic turmoil. Most life insurance policies have cash value attached, which means the premiums are greater at the start of the policy than they would be in a term policy. The excess premium is invested in a separate account by the insurer for building up the cash value. As most insurers are experienced and skilled investors, they increase the cash value by a good margin. This factor ensures that the insurance policies are secured and a good return is evident.
Here are some of the advantages of having a life insurance:
- Income is guaranteed from a life insurance policy as funds that are earned and hoarded during the lifetime of the policy by the insurer are utilized to supply a firm source of returns.
- The insurer distributes the revenue earned among all the policyholders through yearly announcement of bonus or dividends.
- A life insurance guarantees that the family members have a monetary back up in case of any unexpected incident happens to the person who opened the insurance policy.
- Insurance policies are effectively tax-saving instruments as it offers tax-benefits. If chosen wisely, a fair amount of income can be transferred in the tax-benefit portfolio.
There are different types of insurances available in the market today; it is required to be familiarized with them prior to taking a decision. One has the option of taking a term life insurance policy that would cover for a set number of years, generally ranging from 10 to 30 years. These policies pay a benefit only during the term period that the insurance covers. It can be a fine option if someone is considering coverage for a set period, for example, until the children completes college education. There is also the option of taking a whole life policy, which is known as permanent life insurance.
People interested in having a life insurance in Singapore will be largely benefited from the recent initiatives taken by the insurance providers. Once the initiatives are implemented in mid 2014, it will change the way insurance products are sold. Among other measures, a direct online channel will be open. It will open doors for people to take basic insurance products without having to pay for financial advice and with just a nominal administration fee. A website will also be developed by the year end where consumers would be able to compare various insurance products before making the final decision. Once the measures are implemented, investment in insurance will be even more attractive than what it is now.
To help people make the right decision on investment and on saving money, these comparisons are done by iMoney Singapore.
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