Life insurance explained simply

Life insurance sounds heavy — like something only married people with kids and a mortgage need.

But take a moment to think: if you weren’t around, who would be affected financially? If your parents rely on you, or you want to make sure your family isn’t left scrambling to cover costs, life insurance becomes less of a “maybe later” and more of a “start planning soon”.

It’s about giving your loved ones peace of mind in the worst-case scenario.

What is life insurance?

It’s a plan that gives your family or loved ones a payout when you pass away or if you become totally and permanently disabled. We know it’s kinda morbid and not the most appealing thing to think about, but it’s important because you’d probably want to give those who depend on you financial breathing space when the worst happens.

Even if no one depends on your income now other than your pet goldfish, things change. You might take on a home loan, support your parents when they fall ill, or raise a family one day.

Getting life insurance early locks in lower premiums and protects your future dependants.

Two types of life insurance

Similar to all other insurance, the earlier you buy your life insurance, the lower your premiums. If you bought a term life insurance at 30, you could be paying as little as $450 a year. Wait till you’re 40? Your premium is likely to double! Having said that, you should, at most, spend 15% of your take-home pay on insurance protection.