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Savings Insurance In Singapore – What You Need To Know

Savings Insurance In Singapore - What You Need To Know

Savings Insurance In Singapore – What You Need To Know

The financial market in Singapore has blossomed these past few years, producing a myriad of helpful financial products. The options are plentiful to ensure that you can always find that investment plan that works best for you. On the downside, the mind-boggling options tend to confuse most people. To clear up some of the confusion, this article is going to focus on savings insurance.

The Basics

The first thing to note is that you should not confuse savings accounts and savings insurance. The two are not the same. A savings account is a bank account in which most people store their excess money. Savings insurance is drastically different as it’s a financial vehicle you buy so your savings can grow over a fixed amount of time.

With a savings account, you can withdraw your money anytime you want. On the other hand, savings insurance is more rigid, and you must commit the money for a period of years before you can withdraw it. While it is true that you can still withdraw in some cases, it usually leads to a hefty penalty.

As an example, if you choose to buy a 5-year savings insurance plan, that means you can’t withdraw your money for the next five years. If you need to withdraw for whatever reason, you’ll be penalized for early withdrawal. Generally, savings insurance work similarly to a bank’s fixed deposit.

You should also not confuse saving insurance with an investment plan. Investment plans typically produce higher returns. However, it also carries a higher risk where it’s possible to lose all your money. When it comes to savings insurance, it’s improbable that you lose your capital, but the yields will also be lower.

Savings Insurance In Singapore - What You Need To Know

Your Options

When it comes to saving insurance, you have usually have two major categories to choose from – the regular premium plans and one-time lump sum premiums.

* Regular Premium Plans – this savings insurance plan will require you to contribute a certain amount of money each month or year. You will then receive your capital back plus gains at the end of your contribution years. The returns are guaranteed.

* One-Time Lump Sum Premiums – this savings insurance plan is doesn’t require you to contribute on a monthly or yearly basis. Instead, you only pay a single lump-sum payment.

Are The Results Guaranteed?

The short answer is – yes. However, if you are dealing with a private institution, then there’s always that possibility that the company will go bankrupt. If that happens, it’s possible that you will only get back a portion of your capital or lose it entirely. However, this event is highly unlikely, especially if you deal with an established financial institution with years of track record.

Wrapping It All Up

Savings insurance is similar to a time deposit with a bank. It’s a way for growing your money with very little risk involved as you are guaranteed results. Generally, you have two options. Either you opt for a regular premiums plan or a one-time lump sum premium plan. To keep your capital more secure, it’s best that you deal with an established financial institution with a long-standing history as the probability of them going bankrupt is very low.

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Savings Insurance In Singapore – What You Need To Know

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