Reasons to Buy..

A Lease of Life, if advertised for sale,
would command a fabulous price, provided its
surety could be made apparent. The nearest
approach to such a lease is an insurance of
the money value, the productive value of a
life.  - Benjamin David King

In these more evolved times, there are still some people in Singapore (a developed country) who actually still do not recognise the importance nor the value that life insurance can play in their lives.

Today, even with a better educated population and the advent of the Information Era, there are some people  who may not believe the concept that life insurance operates under. Rather they believe myths. Most likely told to them by their barber, personal trainer or son who has a diploma in mechanical engineering.

Here are the some of the more popular Myths:


Myth: I'm single and don't have any dependents, therefore I don't need any coverage.

Even single persons need at least enough life insurance to cover the costs of personal debts, medical and funeral bills. If you are uninsured, you may leave a legacy of unpaid expenses for your family or executor to deal with. Plus, this can be a good way for low-income singles to leave a legacy to a favorite charity or other cause.

Myth: I only need an amount of life insurance coverage equal to twice the amount of my annual salary.

You need an amount of life insurance equal to the amount that is actually required. In addition to medical and funeral bills, you may need to pay off debts such as your mortgage and provide for your family for several years. A cash flow analysis is usually necessary in order to determine the true amount of insurance that must be purchased - the days of computing life coverage based only on one's income-earning ability are long gone.

Myth: My term life insurance coverage at work is sufficient.

Maybe, maybe not. For a single person of modest means, employer-paid or provided term coverage may well be enough. But if you have a spouse or other dependents, or know that you will need coverage upon your death to pay estate taxes or create an estate for charity, then additional coverage may be necessary if the term policy does not meet the needs of the policyholder.

Myth: Only breadwinners need life insurance coverage.

Nonsense. The cost of replacing the services formerly provided by a deceased homemaker can be higher than you think, especially when it comes to cleaning and daycare.

Myth: I'm better off investing my money than buying life insurance of any kind.

Hogwash. Until you reach the breakeven point of asset accumulation, you need life coverage of some sort. Once you amass $1 million of liquid assets, you can consider whether to discontinue (or at least reduce) your million-dollar policy. But you take a big chance when you depend solely on your investments in the early years of your life, especially if you have dependents. If you die without coverage for them, there may be no other means of provision after the depletion of your current assets.

In the next upcoming posts, I give you the many, many reasons you should buy life insurance.