March 11, 2021
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When critical illness strikes, medical costs are not the only thing to worry about. The long road to recovery could cause significant financial stress, such as income loss and childcare-related expenses.
At first glance, standard Integrated Shield plans may seem like they can keep us financially protected from pricey medical costs when our health is ever compromised.
But recent statistics from Life Insurance Association of Singapore’s (LIA) 2018 Protection Gap Study found that an average Singaporean working adult only has critical illness cover of just $60,000.
In comparison, LIA recommends a sufficient CI coverage to be about four times the average annual pay of $81,663 or around $316,000.
Should you buy term life or whole life insurance?
Both forms of life insurance are meant to protect you if you die or become totally or permanently disabled. They typically pay out a lump sum to your family (if you die) or you (if you become disabled).
Term life insurance typically allows you to get covered until an age of your choice so you don’t need to pay for protection when your dependents are financially independent.
On the other hand, whole life insurance offers life insurance coverage for your entire life (or at least until you reach a very ripe old age). This usually means coverage for death and total and permanent disability.