Get life insurance quotes online. 7 common mistakes people make when buying life insurance - Standard Chartered Singapore

Mistake #3: Using life insurance primarily as an investment vehicle

Combining life insurance coverage with wealth-accumulation goals using an investment-linked policy may seem like a good idea. After all, you get the best of both worlds. However, it may not always be the best option. Buy life insurance policy.

The mutual funds you could invest in through an investment-linked insurance policy are likely also available separately as unit trusts . Depending on the specific fund or policy, it may turn out to be cheaper from a fees perspective to buy a term product for insurance protection and invest the premium difference directly into unit trusts instead. Make sure you understand the investment-linked policy pros and cons and those of unit trusts before making your decision. The following are a few to consider.

Investment-linked policy pros and cons

Provides life insurance coverage.

Allows for flexibility to adjust your investment and insurance coverage when you need to.

Investing your premiums into the sub-fund (a professionally managed investment portfolio) doesn’t guarantee a return.

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Units may not cover the rising cost of insurance as you get older.

There are no insurance-related fees.

You can time your investment separate from your insurance policy.

Doesn’t include insurance coverage.

There is no guaranteed return on investment.

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All in all, if you’re making the decision purely from an investment perspective, what’s most important is investing in the right fund. Invest in the wrong one, and the performance of your investment will suffer.

Mistake #7: Taking too long to buy

So, you’ve done all of your research and have a clear idea of what you’d like to achieve with your life insurance. And though we’ve already urged you not to make an impulse purchase, it’s equally important that you don’t wait too long to buy your policy. With life insurance, the older you are, the more expensive purchasing a policy can become. By planning for and purchasing life insurance at a younger age, you’re more likely to save a substantial amount of money in the long run.

As we’ve learned, it’s easy to make mistakes when buying life insurance in Singapore. That’s why it’s key to understand the finer details of each of the policies available and the pros and cons of each.

Everyone’s life and goals are unique. Your insurance policy should cater to these unique needs. Now that you know which mistakes to avoid and how to avoid them, you’re in a better position to purchase a policy that truly suits you.

Whether your goal is to accumulate wealth or ensure that your loved ones are protected in the long term, Standard Chartered is here to help you achieve your objectives. The earlier you get started on this journey, the better. Speak to one of our trusted financial advisers today to learn more about how we can help you.

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This article is brought to you by Standard Chartered Bank (Singapore) Limited. All information provided is for informational purposes only.
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