Having the choice to live the kind of life you want starts with a strong financial foundation. In this episode of AIA Voices, finance expert Anna Haotanto shares the six steps towards financial success.
Goals need plans. Plans need some thought. (Credit: Getty Images)
Life insurance policies. Do you need one? Is there anyone who doesn't necessarily need one? When should you think about getting one?
If you have never bought life insurance before or are starting a new chapter in life and taking on new responsibilities, you might find yourself wondering about it.
The answer is likely in the affirmative if you wish for your loved ones to be safeguarded financially in the event of your untimely demise. Simply put, if anyone relies on you financially – your spouse or life partner, your children, your siblings or any other family members – then, yes, you need life insurance coverage. If you are financially independent and nobody relies on you, then, no, you probably don't. That said, it still might be a good idea to have a life insurance policy in place for peace of mind – and as a strategic financial tool.
To help you consider all of this further, here are four principal times when most people choose to buy life insurance – and why.
1. Buying a home
Owning a home is a good long-term investment that also represents stability and independence. (Credit: Getty Images)
Buying a home opens an exciting new chapter in life. It also brings many new responsibilities and financial commitments – the biggest among them being the repayment of a mortgage. With inflation, house prices continue to increase year by year. According to statistics from Global Property Guide, Hong Kong has the highest house price in Asia, with US$28,570 per square metre (sq m). Singapore follows with US$14,373 per sq m. Meanwhile, buying a house in Thailand, Malaysia and the Philippines will cost you around US$3,441 – US$5,266 per sq m.
If you were to pass away before your mortgage has been repaid, that financial burden and responsibility would fall on your partner or family members.
Being proactive in looking after your loved ones may help ease that burden. At a time when your family is already dealing with your loss, insurance can bring a little peace of mind and relieve at least a few of their worries. It will help them cover any outstanding mortgage repayments and minimise some of the financial burdens they may experience after you've passed.
2. Getting married
Taking the leap. (Credit: Getty Images)
Have you recently gotten married, become engaged or entered a committed relationship? This is another life milestone that often prompts people to consider buying life insurance, especially if they are combining families and assets.
Food for thought: the average wedding costs in Singapore, Indonesia, Malaysia, Thailand and the Philippines come up to around US$20,000 – US$55,000. Meanwhile, newlyweds in Hong Kong would have spent around US$40,000 – US$60,000 for a wedding reception with approximately 100 guests.
If you and your partner count on each other's income to support your lifestyle, life insurance is something you both might want to start thinking about. If something happens to you, the support will keep your spouse financially afloat and enable you to keep contributing to their wellbeing.
In fact, a policy payout can be used to cover funeral costs, pay rent or mortgage or settle any outstanding debts and household bills. It can also leave a financial legacy for those you leave behind.
3. Starting a family
Here's to the start of a wonderful adventure! (Credit: Getty Images)
Deciding to start or expand your family is no easy choice today, especially when considering how expensive it is to raise a child.
Like most parents and parents-to-be, you'll probably want your kids to have the best in life – from quality education to the opportunity to study further or travel abroad. You may wish to support them when they buy their first home or start a business they're passionate about and follow their dreams. Most importantly, you'll want to know your kids will be safe and cared for when you're gone.
Planning ahead can lift some of the pressure off your shoulders. Additional life insurance coverage can help you put your worries to rest, protect your children against the unexpected and allow you to enjoy the present with them fully.
4. Starting a business
It's never too late to follow your dreams. (Credit: Getty Images)
If you own a business, are part of a family-owned company or are building a new enterprise, it's essential that you have life insurance for both financial security and ease of mind.
As a small business owner, your family members, ageing parents, children, spouse or partner depend on you and your business' income to survive. Also, you may be considering taking out loans backed by family assets to start your business. Should anything happen to you, your loved ones might be suddenly left with a heavy financial burden to bear. Furthermore, they might not have the expertise or desire to take over the business or find themselves unable to sell it quickly and profitably.
The right cover will help future-proof your family after you are gone, enabling them to pay off any business debts, cover living expenses and have the time to figure out what to do with the business.
On a side note, small-business owners may need a few different life insurance policies. If starting a business is among the reasons you are considering insurance coverage, please reach out to us for advice.
So, do you think you might need life insurance? It can be puzzling when you're just starting out but it's less complex than it might seem. If you are in need of guidance, please contact your local AIA office and we'll help you find the solution that best suits your needs, makes your life easier and lets you focus on what matters most.
AIA Voices is a community of influential and educational voices from around Asia to talk about life, health and wellness. A platform to educate, motivate and inspire people to make positive behavioural changes on their health and wellness journey. Providing an opportunity for communities across Asia to connect, collaborate, and learn from each other. Designed to drive AIA One Billion, our ambition to engage a billion people to live Healthier, Longer, Better Lives by 2030.
Insurance Information Institute (III.org). 2022. Life Insurance. [online] [Accessed on 1 July 2022]
Global Property Guide. N.d. Square Metre Prices in Hong Kong compared to Asia. [online] [Accessed on 1 July 2022]
Marketing Interactive. 2019. The average Hong Kong wedding costs HK$480,000, study finds. [online] [Accessed on 1 July 2022]
The ASEAN Post. 2019. Rising wedding costs in Southeast Asia. [online] [Accessed on 1 July 2022]
The Business Time Hong Kong. 2021. 人情公價2021｜午宴800元、高級酒店晚宴1500元｜只觀禮無婚宴俾300元！10種人情價目表. [online] [Accessed on 1 July 2022]
The Standard. 2021. Smaller banquets, bigger rings: wedding survey. [online] [Accessed on 1 July 2022]
Yahoo News Hong Kong. 結婚預算要準備多少？｜婚禮項目支出完整收費清單｜比較銀行貸款、信用卡利息與每月還款. [online] [Accessed on 1 July 2022]
This is general information only and is not intended as financial, medical, health, nutritional or other advice. You should obtain professional advice from a financial adviser, or medical or health practitioner in relation to your own personal circumstances.