When I ask my female clients whether they have life insurance, the answers usually fall into one of three categories: ‘I have something from work,’ ‘My husband has a policy,’ or ‘I have been meaning to sort that out.’ Very few can tell me confidently how much coverage they have and whether it is enough.
Today, I want to change that — because understanding your life insurance needs is one of the most important acts of financial responsibility and love for the people who depend on you.
What is life insurance, really?
Life insurance is a contract that pays a lump sum or income to your beneficiaries when you die. Its primary purpose is to replace your income and protect your dependants from financial hardship in your absence.
If people depend on your income — children, a spouse, ageing parents — life insurance is not optional. It is a financial necessity.
Why many women are underinsured
- Relying solely on employer group coverage. Most group policies provide one to two times your annual salary — which is typically far less than what your family would need. Group coverage also disappears when you leave the job.
- Assuming the family is covered under a spouse’s policy. A spouse’s life insurance covers their life — not yours. If you were to pass away, your contribution to the household (financial or otherwise) needs to be replaced.
- Undervaluing unpaid contributions. If you are a full-time caregiver or work part-time, you may think you do not need coverage. But consider what it would cost to replace the childcare, household management, and emotional support you provide.
- Not reviewing coverage after major life events. Marriage, children, a mortgage, a salary increase — each of these changes your insurance needs. Many women have coverage levels set years ago that no longer reflect their current circumstances.
How much life insurance do you actually need?
According to the Life Insurance Association of Singapore (LIA), the recommended coverage for death and total permanent disability is 9 times your annual income (LIA Basic Financial Planning Guide, in collaboration with MAS and MoneySense). This is a useful starting benchmark, but a more precise calculation should also consider:
- Outstanding debts (mortgage, car loan, credit cards)
- Years of income your family would need to replace
- Children’s education costs
- Your family’s ongoing living expenses
- Any existing savings or investments that could cover these needs
For example, if you earn $60,000 per year and have two young children and a mortgage, your coverage needs could easily be $700,000 to $900,000 or more.
Life insurance is not about planning for death. It is about protecting the life you have built and the people you love.
Term vs whole life insurance — a quick overview
Term insurance provides pure protection for a defined period (e.g., 20 or 30 years) at a lower premium. It is ideal for covering your highest-need years — when you have dependants and a mortgage.
Whole life insurance provides lifelong coverage and accumulates cash value over time. It is more expensive but serves different purposes — legacy planning, retirement supplementation, and long-term wealth transfer.
Many of my clients benefit from a combination of both — a robust term policy for protection during the high-need years, with a smaller whole life policy for long-term planning.
The Singapore context
In Singapore, life insurance premiums are not tax-deductible, but proceeds paid to a named beneficiary (other than the estate) are generally not subject to estate duty or creditors’ claims. This makes life insurance a useful estate planning tool as well. Ensure your CPF nomination and insurance beneficiary nominations are current and aligned with your wishes.
The takeaway
Do not assume you are covered. Take 30 minutes this week to review what you have, what it covers, and whether the gap between your current coverage and what your family actually needs has been addressed.
Not sure if your coverage is adequate? I offer insurance review as part of holistic financial planning. Let us make sure your family is protected.
General Advice Disclaimer
The information in this publication or any dissemination of information in any form is not intended to be and does not constitute financial advice, insurance advice or any other advice or recommendation of any sort offered or endorsed by finexis advisory Pte Ltd (“finexis”).
The information is not to be relied on as investment, legal, tax or other advice as it does not take into account the investment objectives, financial situation or particular needs of any specific investor.
Investment products are subject to investment risks including the possible loss of the principal amount invested. References may be made to past performance of investment products and it may not be indicative of future results. Buying insurance policy or investment product may require long-term commitment. An early termination of the policy or product usually involves high costs and the surrender value payable may be less than the total amount paid. Please refer to the relevant documents such as product summary or policy contract for the exact benefits and features.
If you need clarification, please do not hesitate to ask your financial consultant. You should not make any decision based on the information without undertaking independent due diligence and consultation with your financial consultant.The information provided and / or this advertisement has not been reviewed by the Monetary Authority of Singapore.
