When it comes to insurance, having lots of options isn’t exactly a good thing. After all, you only need one insurance policy for each purpose. And let’s face it, shopping for insurance isn’t exactly the kind of shopping spree you would call fun.
Ideally, the insurance buying process should be simple, reliable and direct. FWD Insurance claims to fulfil all three criteria. But does it really? Let’s find out with their new life insurance plan Essential Life.
But first, what is term life insurance?
Life insurance has a bit of a bad rep in Singapore, as people tend to conflate it with the investment-linked policies (IPLs) that agents like to peddle.
But when stripped down to the bare essentials, and minus all the investment and savings components, life insurance is fairly simple — it offers you (or your family) a sum of money when you die.
(If you’re asking, “Why do I need money if I’m dead?”, you might not have family members whose life depends on your earning power. But if you do, it’s easy to see why life insurance protection is important, as it ensures that your kids or elderly parents aren’t left destitute.)
By the way, if you’re still scratching your head, find out more about the differences between whole life and term life insurance here.
How does FWD’s Essential Life term insurance work?
You won’t be using the plan to invest or save, which also means your premiums will be significantly lower than if you were to buy whole life insurance or an ILP.
You can sign up for FWD Essential Life without having to go for a medical examination. So you don’t have to worry about getting rejected or having your premiums raised because of a health condition you didn’t know about.
FWD Essential Life is only for people aged 18 to 40 years old with an NRIC or FIN, and living in Singapore.
As long as you meet those criteria, it’s really easy to buy this FWD term life insurance plan online. You can buy it without having to meet an agent at Starbucks to “talk about financial planning”.
How much life insurance coverage can you get?
FWD Essential Life offers up to $750,000 worth of coverage.
If you’re a high-net-worth individual earning millions, that amount might not be enough. But for the average person, this should be more than 9 to 10 times your annual income (the recommended amount of life insurance coverage).
How it works is that if you die or get diagnosed with a terminal illness, the plan will pay out the full sum for which you are receiving coverage.
So, if you have selected $200,000 worth of coverage, you or your family will receive $200,000 upon your death or diagnosis.
Your family will also get paid $5,000 worth of funeral financial assistance if you pass away.
How long is the coverage term?
With this insurance plan, you don’t have to worry about how many years you want to be protected for. You simply renew your coverage every year until you feel you no longer need it.
You are guaranteed the right to renew the policy every year until the age of 85 so long as the policy is still being offered.
You can change your sum assured whenever you renew the policy. So if you decide you want to increase your coverage later on, you can. This will, however, affect your premiums.
What additional riders can you add on?
FWD’s Essential Life offers an optional cancer benefit rider. If you decide to purchase this rider, you will receive a payout of 100% of the cancer benefit if you get diagnosed with cancer at any stage.
This can be an option if you don’t have critical illness insurance (which offers a lump sum payout when you get diagnosed with a critical illness).
Paying for this rider is cheaper than getting a separate critical illness policy. On the downside, you only get protected for cancer and not all the other conditions like heart attack and stroke, which are usually covered by critical illness insurance plans.
Claiming the cancer benefit does not end your policy. So you can still hold on to it until you claim the death or terminal illness benefit eventually, or when you reach the age of 85, whichever happens first.
How to make a life insurance claim with FWD
FWD is a digital insurer, so claims are easy to file online. Simply fill in this two-page online form and submit it. Your family members can also submit a claim on your behalf.
The next page requires you to select which insured event you want to claim for. After submitting your selection, you’ll be contacted to provide relevant supporting documents such as the death certificate.
What are the benefits of buying FWD’s Essential Life insurance?
FWD’s Essential Life is very cheap compared to your typical term life insurance policy. For example, we estimate your premiums to cost about $21.32/month if you’re a 30-year-old male non-smoker opting for $500,000 sum assured.
It’s also super easy to sign up and pay for online — no need to meet with an agent. You can sign up directly through MoneySmart and enjoy 10% discount (till Nov 12) if you do not need further advice.
When you click on the apply link below, you can use FWD’s online quotation tool and input your IC/FIN number to get a personalised quote before you purchase.
And it’s low-commitment as you can just not renew it at the end of the year if you wish to move on to a different plan.
Is it worth getting FWD’s Essential Life term insurance?
As the word “essential” hints, Essential Life is meant to be a “bare bones” sort of life insurance policy.
Most life insurance plans will also pay the full sum assured if you become totally and permanently disabled, and thus can be useful even if you don’t have family members to support financially. They might also have lower claim tiers that pay out a percentage of the full sum assured if you become, say, partially disabled.
However, Essential Life only pays out if you die or are about to die. So, it’s only useful if you are buying to protect your family, rather than support yourself if you become disabled.
This plan might not be for those who are looking for very comprehensive life protection. But if you’re just looking for basic coverage to protect your family or need a placeholder plan until you find a better one, it’s a cheap and convenient option.
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