This article is an updated version from the last time it was published in early 2016.
We’re delighted to have a consultant from Great Eastern Financial Advisors here with us today to tell us more about life insurance. Not simply just any life insurance, but a rather unique financial product- one that is not much talked about whenever we are meeting our very own planners from whichever company they represent.
Why don’t our very own insurance agents talk more to us about other financial instruments? That’s because a bulk of financial planners in Singapore are only licensed to sell the typical life insurance plans that we are often used to.
Great Eastern Financial Advisors stand out because their planners take on extra modules from the College of Insurance in order to sell additional plans- plans which can be found in the banks, or accounting firms, and lawyer firms. And on top of that, they go beyond just selling life insurance, but what I like about GEFA is that they also perform a holistic financial planning for you where they can advise you on legacy planning which usually involves Estate planning after your demise.
Ever thought why you’re always short of money for tuition, school, or even for simple holidays? That’s because our forefathers before us didn’t plan anything for us before THEIR demise. Can you imagine if you do something now for your family, your next generation and even the next would profit from your planning today.
What used to be only prevalent in the United States has already been made available in other parts of the globe and to our dear country—Singapore.
I can see your brows knit in confusion by now, so let’s cut to the chase and get to the point. I’m talking about none other than Universal Life Insurance.
Universal Life Insurance, is, in all intents and purposes, is a specific kind of permanent life insurance. Regrettably, letting you understand its nature would entail talking about some few basic nitty gritty details about it. Don’t worry, I’ll try to be as reader-friendly as possible. And at the end of this article, we’ll include a short video of what Universal Life Insurance is all about.
As discussed in our previous blogposts, investing in life insurance entails paying money which we call premiums in order to keep ourselves, our property like our vehicles and house insured. With the payment of premiums, we get a specific type of protection based on the policy we have chosen.
Typically, in a universal life insurance policy, the excess premium over and above the current cost of insurance is given back to the cash value of the policy on a monthly basis together with the interest that has grown. However, in Singapore, what is being practiced is that the cost of insurance (COI) plus other fees are taken from the cash value of the policy.
Simply put, the earning rate is pegged to a bond, financial index, or stock as the insurance company determines what must be credited back to the account which is usually at a minimum rate of about 2%.
Relevance of Life insurance in Singapore
This type of insurance is currently on a global rise and there is a perfectly good reason for that. Those going for life insurance in progressive Asian economies such as Singapore are faced with an even bigger challenge of introducing products that reflect the needs of its customers in keeping with our changing times. If you wish to boost wealth creation, protect your interests in family businesses as shareholders or even plan your legacies (and devisees), then a universal life insurance may be the perfect fit for you.
Low Cost Protection
Yep! You read that right. You can get protection of term life insurance at a low cost plus the perks of a savings aspect since this provides a handsome cash value buildup. Furthermore, you are FREE to modify your savings, death benefits, and even premiums depending on your current circumstances on top of your freedom to make the most of your rising cash value increments with a rate that can be adjusted monthly.
Other perks
- Remains in force even with a zero cash value
- Won’t lapse if premiums have been paid off
- Can be used to lower your current premiums to a minimum
- Guaranteed return throughout the entire life of the policy
- Withdrawable cash values that does not affect your lump sum benefit
