S'Poreans Set To Curtail

It has been revealed that purchasing a new life insurance policy has been crossed off for several people's shopping list in the middle of the severe economic times.

According to new figures, premiums for new policies pushed by 64 per cent to $1.04 billion in the fourth quarter of last year, which is from the same period a previous year.

Though, it seems that consumers are delaying the purchase of new policies even if insurance is arguably a more careful move than ever in unplanned situations.

The fourth-quarter sales of alleged single-premium products, firstly they need a lump sum payment that slumped an even bigger 69 per cent to $811 million.

The new rules on investing CPF money seized effect in April earlier year, slashing the sum accessible for private investments under the CPFIS.

However, the CPF has been a significant market for these single-premium products like endowment policies and investment connected policies.

Life insurance industry is entailed by single-premium and regular-premium businesses. Single-premium sales dwarf regular premium ones extremely.

Even as equity markets continue to obtain a fall and as fears of job losses raising severely, those individuals with cash shortages seems to be putting the requirement for life insurance coverage on a back seat.

LIA figures pointed out that the life insurance policy surrender rate surged to 2.19 per cent in the fourth quarter from 1.9 per cent in the corresponding period of 2007 and a not so motivating sign that more policyholders now feel the requirement to cash in their policies for crisis funds.

LIA president Darren Thomson suggested that funding in or surrendering policies should never really be taken into account.

'There is a great role for life insurance throughout different life stages,' said Mr. Thomson, who is also the president and chief executive of Manulife.

'When you commence with a mortgage, you don't essentially want to leave the other partner with the liability should anything occur to you. And when you are in your retirement, you likely want to consider using your accrued savings to give yourself a comfortable and secured life.'

On the other hand experts say surrender rates are not too alarming yet, people should also invest in what they can easily afford.

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