Does Life Insurance Really Cost The Same As A Coffee?

In a world where financial stability is paramount, securing the future through term international life insurance has become a global necessity for expats in Singapore. The notion that international term life insurance in Singapore costs less than a daily cup of coffee may seem incredulous at first but a closer look reveals that this essential protection is more affordable than commonly perceived.

Understanding International Life Insurance:

International term life insurance is a type of life insurance policy that provides coverage for individuals who live outside their home country, commonly known as expatriates or expats. This insurance is designed to offer financial protection to policyholders and their beneficiaries in the event of the insured’s death, regardless of whether it occurs in their home country or abroad.

Here are some key features and reasons why international life insurance is important for expats:

1. Global Coverage: International life insurance typically provides coverage worldwide, allowing expats the flexibility to live and work in different countries without the need for separate insurance policies in each location.
2. Currency Flexibility: Policies can be denominated in various currencies, which is beneficial for expats who may earn and spend money in different currencies. This helps to avoid potential currency exchange rate fluctuations impacting the coverage value.
3. Financial Protection: Like domestic life insurance, international life insurance provides a lump-sum payout to beneficiaries in the event of the insured’s death. This financial protection helps ensure that the family and dependents of the expatriate have financial support even if they are residing in a different country.
4. Portability: International life insurance policies are often portable, meaning they can be transferred or continued if the insured moves to a different country. This flexibility is crucial for expats, given the transient nature of their lifestyles.
5. Risk Mitigation: Living and working in a foreign country can bring about unique risks and challenges. International life insurance helps expats mitigate the financial risks associated with unexpected events, ensuring their loved ones are taken care of financially.
6. Estate Planning: International life insurance can be a valuable tool for expats engaged in estate planning. It provides a means to distribute assets and wealth to beneficiaries in a tax-efficient manner, considering the potential complexities of international tax laws.

International term life insurance is important for expats because it provides a versatile and comprehensive solution to address their unique needs and circumstances as they navigate life in different countries. It ensures that financial protection and support extend across borders, offering peace of mind to expatriates and their families.

Factors Influencing Affordability:

Over the years, there have been significant advancements in underwriting technology. Insurers now have access to vast amounts of data and sophisticated analytical tools that enable them to assess risks more accurately. This improved risk assessment allows insurers to offer more competitive pricing on policies, making international life insurance more affordable for consumers.

The globalization of the insurance industry has led to increased competition among insurers. With more players entering the market, insurers are compelled to offer better deals and more competitive rates to attract customers. This competitive environment puts downward pressure on premiums, ultimately benefiting consumers seeking international life insurance coverage.

While advancements in underwriting technology have generally made insurance more affordable, certain health and lifestyle factors can still impact premiums. Pre-existing medical conditions, such as diabetes or heart disease, may result in higher premiums due to increased risk to the insurer. Similarly, individuals who smoke tobacco or engage in other high-risk behaviors may also face higher premiums. Despite these factors, the overall trend in the insurance industry is toward greater accessibility and affordability for international coverage.

Comparing Costs: A Cup of Coffee vs. International Life Insurance:

Let’s break down the cost comparison between a cup of coffee and international life insurance. The average cost of a cup of coffee in the CBD is around $5.90. Assuming one coffee per day and 20 working days per month, this amounts to $118 per month.

Premiums depend on factors such as age, health, coverage amount and duration.

The premiums below assume the policy ceases at 65 years old and the applicant has no pre-existing conditions. We have included premiums for both males, females, smokers and non-smokers with a sum assured of SGD $1 million.

 

Male
Non – Smoker	Sum Assured	Term	Premium
30 Year Old Male	SGD 1,000,000	35	SGD 40.90
40 Year Old Male	SGD 1,000,000	25	SGD 71.65
50 Year Old Male	SGD 1,000,000	15	SGD 125.90
Smoker	Sum Assured	Term	Premium
30 Year Old Male	SGD 1,000,000	35	SGD 58.75
40 Year Old Male	SGD 1,000,000	25	SGD 110.15
50 Year Old Male	SGD 1,000,000	15	SGD 197.70
Female
Non – Smoker	Sum Assured	Term	Premium
30 Year Old Female	SGD 1,000,000	35	SGD 36.10
40 Year Old Female	SGD 1,000,000	25	SGD 56.20
50 Year Old Female	SGD 1,000,000	15	SGD 89.60
Smoker	Sum Assured	Term	Premium
30 Year Old Female	SGD 1,000,000	35	SGD 47.25
40 Year Old Female	SGD 1,000,000	25	SGD 75.95
50 Year Old Female	SGD 1,000,000	15	SGD 124.85

*Figures correct 1st March 2024

The Value of International Life Insurance:

Beyond its affordability, international term life insurance provides invaluable peace of mind. It serves as a financial safety net for loved ones, ensuring that they are protected no matter where life takes the policyholder. Whether facing unforeseen medical expenses, funeral costs, or other financial challenges, international life insurance becomes a crucial lifeline for those left behind.

In conclusion, the idea that international term life insurance costs the same as a cup of coffee is not merely a catchy slogan but a reflection of the affordability and accessibility of this essential financial tool. As individuals navigate the complexities of a globalized world, securing the future with international life insurance proves to be a wise and economical choice. So, the next time you sip your morning brew, consider redirecting that spare change towards a more lasting investment – the protection and well-being of your loved ones through international term life insurance.