Singaporeans are grossly underinsured: LIA research

March 30, 2007

Singaporeans are grossly underinsured: LIA research

Two new studies suggest lack of awareness of what is enough coverage

By Lorna Tan, Finance Correspondent

MOST Singaporeans are woefully underinsured and will not have enough to cover their death expenses, outstanding loans and dependants' needs, a body representing the life insurance industry said yesterday.

The Life Insurance Association (LIA) said its commissioned research found that the average Singapore adult may be underinsured by as much as $362,000.

What many consumers do not realise is that they only have to pay premiums of less than $4 a day to buy a term plan to cover this shortfall, the LIA said.

LIA's new findings indicate that Singaporeans without an insurance policy are indifferent about getting coverage.

They see insurance as 'expensive' and believe there are 'more urgent necessities' such as a car and credit card loans.

Those were the key findings of two new studies commissioned by the LIA to find out consumers' attitudes on insurance protection, and to determine the extent of underinsurance for death cover among working Singaporeans.

Of the 400 consumers polled in the first survey, three in 10 did not have any insurance. Of those who did, 26 per cent had no idea how much they are covered for.

Those who believed they are well-covered were often quite misguided as the average amount of coverage of this group was only $173,000, well below 10 times average annual income - a widely used rule of thumb.

In fact, Nanyang Technological University's Associate Professor Yee Wah Chin, said the minimum level of death cover should be 11.3 times of a person's annual income.

The facts are out! Singaporeans are grossly under insured. But not many people are keen to open up and listen to what an insurance agent has to say. This could be due to the bad publicity; bad experience from past agents, what ever the reason, this should not hinder one from seeking a reliable needs based honest agent to help them in properly insuring their family. To be in command, control and even have a say even when the sole breadwinner is gone!

Feb 20, 2007

Widow struggles to care for kids, mum-in-law

On Jan 26 last year, the family's breadwinner, lorry driver Lim Kah Sim, was crossing the carpark just below the Bukit Timah flat when he was knocked down by a van.

It was 5.45am and Mr Lim, 50, was on his way to take a bus to his Jurong workplace.

He suffered head injuries and was in hospital for two days before dying just a day before Chinese New Year.

His wife, who wished to be known only as Madam Kong, now cares for their son, 15, and daughter, 13, who are in Secondary 3 and 1 respectively.

Mr Lim earned about $1,500 a month, supplementing his lorry driver's income by working at a friend's shop on weekends.

Madam Kong, 44, helped out by selling household products part-time.

Madam Kong said: 'Life is very unfair. My husband was very healthy.'

She revealed that they had hardly any savings, and Mr Lim did not own any life insurance policies.

They also had to support Mr Lim's immobile parents who lived with them in their four-room flat. His father passed away shortly after Mr Lim's death, leaving his mother in Madam Kong's care.

If her husband had taken an insurance policy, his family would not be in such a bad state. Insurance is a gift of love…..providing family income and care beyond the grave!

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