Are you ready for an insurance savings plan? Here’s our checklist

Checklist: Are You Ready for an Insurance Savings Plan?

Your highly strung uncle will inform you that you were ready yesterday. As he waxes on (again) about how he took his first investment at the tender age of 17, the rattan chair he’s sitting on suddenly looks a lot like a hoard of gold. And a hoard it must be, stuffed under a mattress and undisturbed even for the occasion. The festive envelope in your hands is thin – $2 again. Family gatherings – what can we say? So, do you listen to your uncle and when are you ready to take the next step with an insurance savings plan? Here’s how you can tell, theatrics notwithstanding.

What is an insurance savings plan?

Why are we offering to help you save? The idea may seem a little weird at first, but here’s a crash course on insurance savings plans.

Among the many ways to save, insurance savings plans are more attractive than bank savings accounts because they provide stable and relatively high financial returns for your commitment. While these plans bear a reputation for long-term financial commitment, this length of time varies from just a few years to decades.

This method also allows you the flexibility to decide how you’d like to commit. You may choose to spread premiums out over a longer period so as to distribute the financial burden or make a one-time commitment. This depends of course, on the provisions of your insurance savings plan of choice.

As a famous rapper once said: if you don’t know, now you know!

1. You’ve paid off your high-interest-rate debt

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Debt is an inevitable part of modern life. Whether you’ve taken a loan from the Housing Development Board (HDB) to pay for your home, or perhaps from the bank for your car, you start with owing a significant amount of money to… somebody else. And the interest rates can bite. Paying off loans with high interest rates can nullify all attempts to earn interest from an insurance savings plan. To avoid losing even more money to interest, allocate your cash to paying off any outstanding debt before you consider further financial commitments like insurance savings plans.

2. Outside your intended premium, your savings will support you for 3 to 6 months

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Finance gurus talk a lot about an ‘emergency fund’ –– they’re referring to the savings that will keep you afloat should you find yourself in a financial rut, such as if (touch wood) you lose your job or face some unexpected medical expenditure. A healthy emergency fund is a good indicator of whether you are ready to consider an insurance savings plan.

Not to mention – being forced to surrender your insurance savings plans in the event of emergency would kick your saving efforts back to square one!

3. Your CPF is doing well, but you want more

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In Singapore, the Central Provident Fund (CPF) accounts are structured to help Singaporeans save for home ownership, medical expenses and retirement among others. These accounts come with interest rates that make CPF way more attractive than, for example, leaving your money in the bank. That said, the government places restrictions on the accounts, like fixing the age from which withdrawals are possible (presently 55). These limitations are the source of #ReturnMyCPF among those who prefer to save on their own terms.

Insurance savings plans afford you just that, by providing a more flexible complement to a healthy CPF balance. With this many insurance savings plans in the market, you are spoiled for choice. Plans like ELASTIQ offer flexible top-ups and withdrawals, so your savings are on hand when you need them. Meanwhile, yet other plans like eEASY save V feature short premium and lock-in terms, so you can enjoy the benefits minus the lengthy commitment. Whatever you’re saving for, an insurance savings plan can help you get there.

#TiqOurWord Let us clarify. By short premium term we mean 2 yearly payments or a lump sum, and by short lock-in term we’re talking 6 years! Want to keep saving? Just leave your funds with us, we’ll do that rest. Learn more about eEASY save V here.

4. You’ve got the goals

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Do you have your life goals sorted out? Then it’s time to prepare your finances to meet them. Insurance savings plans can help, since premium and policy terms vary between plans. Knowing for instance that you foresee financing your child’s college education in 10 years helps you choose a plan that offers a maturity benefit before that point. Perhaps you’re saving for your retirement in 20 years, in which case a plan that takes longer to mature but that offers higher returns could help you maximise your savings within your timeframe. As you can tell, having concrete goals helps you decide whether insurance savings plans are for you, and which.

5. You want to grow your savings, fuss-free

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While lucrative, investing on your own can be daunting. Managing your portfolio is more than just choosing securities you expect to appreciate in value –– once you start looking into asset allocation, things can get complicated. Insurance savings plans are a more conservative approach that nonetheless can help you grow your savings in preparation for the future. With capital guaranteed, your savings aren’t going anywhere… but up!

6. You could use the extra coverage

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Many insurance savings plans, especially endowment plans offer some degree of protection over the insured individual throughout the policy term. Doesn’t hurt to have that added layer of coverage, especially if your loved ones depend on you.

Ready for life?

The best part about insurance savings plans? They free you from worry about your finances, so you can live even larger than before. With this head start in your savings, the possibilities are endless and the world is yours to explore! If you’re ready for the next step, find out about our amazing insurance savings options here.

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As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid. This policy is underwritten by Etiqa Insurance Pte. Ltd. (Company Reg. No. 201331905K). Protected up to specified limits by SDIC.

Information is accurate as at 9 October 2019. This content is for reference only. You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Tiq by Etiqa Insurance Pte. Ltd.

A digital insurance channel that embraces changes to provide simple and convenient protection, Tiq’s mission is to make insurance transparent and accessible, inspiring you today to be prepared for life’s surprises and inevitabilities, while empowering you to “Live Unlimited” and take control of your tomorrow.

With a shared vision to change the paradigm of insurance and reshape customer experience, Etiqa created the strong foundation for Tiq. Because life never stops changing, Etiqa never stops progressing. A licensed life and general insurance company registered in the Republic of Singapore and regulated by the Monetary Authority of Singapore, Etiqa is governed by the Insurance Act and has been providing insurance solutions since 1961. It is 69% owned by Maybank, Southeast Asia’s fourth largest banking group, with more than 22 million customers in 20 countries; and 31% owned by Ageas, an international insurance group with 33 million customers across 16 countries.

Discover the full range of Tiq online insurance plans here.