- Seven in 10 have not increased life insurance cover in five years despite rising income
- Eight in 10 are potentially under-insured by industry standards
Singapore, 11 August 2016 - The Prudential Protection Poll1 reveals that Singaporeans are at risk of not being adequately prepared to cope with the financial burden of life’s crises.
Over the last five years, seven in 10 Singaporeans have not increased their life insurance cover to keep pace with rising income levels2. This group of respondents cited budget constraints as the key barrier to getting more life insurance cover (48 per cent), followed by competing financial needs, with three in 10 (35 per cent) indicating they have other priorities to take care of.
To make matters worse, the Prudential Protection Poll shows that eight in 10 Singaporeans (85 per cent) are potentially under-insured by industry standards, with only five times their annual earnings set aside as contingency funds for unexpected personal and financial events. According to the Life Insurance Association Singapore3, one should aim to have approximately 10 times his or her annual earnings as basic life cover.
Ms Angela Hunter, Executive Vice President and Chief Marketing Officer of Prudential Singapore, said Singaporeans may be unnecessarily exposing themselves and their families to financial stress in times of life’s crises.
“It is a cause for concern that the majority of Singaporeans are insufficiently insured but what is even more worrying is that they do not appear to place a priority on increasing their life insurance cover to match their income as it rises.
“Insurance is an important and essential part of one’s financial planning. As we do not know what the future holds, it is prudent to prepare for the worst by ensuring we have enough funds set aside to provide our families with a reasonable lifestyle if the unexpected happens,” said Ms Hunter.
Lack of awareness on financial protection needs
The lack of awareness on the right level of financial protection needed during times of crisis could be one of the reasons Singaporeans are not sufficiently insured.
According to the Prudential Protection Poll, six in 10 (61 per cent) Singaporeans believe they have enough savings and life insurance cover to protect themselves and their families against life’s eventualities. However, in reality, only two in 10 (15 per cent) have 10 times or more of their annual income set aside as financial protection against life’s crises.
“There is obviously a disconnect between what Singaporeans think they need to ensure a secure financial future for themselves and their families and what is actually required. In deciding on life insurance cover, one should consider factors such as income, expenses, outstanding debts, as well as existing savings and investments. I encourage customers who are unsure of their financial needs to seek professional advice on the various options available so they can make an informed decision that makes financial sense, now and in the future,” said Ms Hunter.
On a more positive note, the Prudential Protection Poll highlights that relationship matters to most Singaporeans with eight in 10 respondents saying providing financial protection to the family is the most important driver of insurance purchase. “At the end of the day, nothing is really more important than knowing that our loved ones will be taken care of in times of crises. As a company that believes in building long-term relationships, we want to help our customers protect their most precious relationships,” said Ms Hunter.
Recognising that the majority of Singaporeans are under-insured, Prudential Singapore is encouraging more Singaporeans to take up insurance by offering discounts on the first-year premiums of selected life and health insurance plans from now until 30 September 2016. These products are available exclusively through Prudential Financial Consultants, United Overseas Bank Group (UOB Group), and Standard Chartered Bank.
Prudential Singapore offers a comprehensive range of life insurance plans through its professional agency force and bank partners to meet the various financial goals and budgets of the consumers.
For more information on Prudential’s protection promotion, please visit: https://www.prudentialreconnect.com.sg/protection
Prudential Protection Poll infographic is available at www.prudential.com.sg/visit/protectionpollinfographic
ABOUT Prudential Assurance Company Singapore (Pte) Limited (Prudential Singapore)
Prudential Singapore, an indirect wholly-owned subsidiary of UK-based Prudential plc, is one of the top life insurance companies in Singapore. We have been serving the financial and protection needs of Singaporeans for 85 years. Our focus is to bring well rounded financial solutions to customers through our multi-channel distribution network, with product offerings in Protection, Savings and Investment. We are one of the market leaders in Protection, Savings and Investment-linked plans with S$29.4 billion funds under management as at 30 June 2016. In 2014, we were awarded an AA Financial Strength Rating by leading credit rating agency Standard & Poor’s.
For the last 11 consecutive years, we have been awarded the Gold Award in Reader’s Digest Trusted Brands. Since 2007, we have been conferred the People Developer Award by SPRING Singapore for our efforts in training and developing employees and in 2013 and 2014, we were presented with Asia’s Employer of the Year Brand Award by the Branding Institute and the World HRD Congress. Prudential Singapore was also awarded the NTUC Plaque of Commendation (Gold) Award in 2014, and the Singapore Human Resource Institute presented the company with the Leading HR Practices in Quality Work-Life, Physical & Mental Well-Being Award in 2014 and the Leading HR Practices in Lifelong Learning Award in 2015.
For media enquiries, please contact:
Tan Ping Ping/ Elizabeth Wong
Prudential Assurance Company Singapore
Tel: +65 6704 7033/ +65 6704 7039
Email: [email protected] / [email protected]
Catherine Ong Associates
Tel: +65 6327 6084
Email: [email protected]
1 The Prudential Protection Poll was conducted online between 24 and 30 June 2016 and surveyed 353 working adults aged between 25 and 49 years old on their attitudes and motivations towards providing financial security for themselves and their families
2 Between 2011 and 2015, the median gross monthly income of workers rose 21.5 per cent. According to the Manpower Research and Statistics Department, the median gross income (including CPF employer contribution) from full-time employed residents was $3,949 in 2015 against $3,249 in 2011.
3 This standard is based on a 2012 Protection Gap study by Life Insurance Association Singapore on the protection needs of Singaporeans. Protection needs is defined as the amount of money required by dependents to cover expenses and maintain a reasonable lifestyle following the death of a member of the household.
LIA Protection Gap Study 2012 Report 28Aug12 File PDF.