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3 situations when insurance is an asset and not a liability
3 situations when insurance is an asset and not a liability

3 situations when insurance is an asset and not a liability

Are you one of those Singaporeans who views insurance as an expense rather than an asset?

For the man (or woman on the street), whether insurance is an asset and not a liability can be a hard question to answer. Here are three instances when insurance can become an asset:

1. When your insurance plan matures

All insurance policies become an asset once the plan matures — that is, you have paid for it and are credited with a lump sum.

What happens if you surrender, that is, give up your policy before its due date? As long as the surrender value of your insurance policy is less than the paid-up premiums, your policy cannot be considered an asset. In other words, terminating or surrendering a policy before its maturity may result in you making a net loss as you may not get back the money you have paid. On top of this, if you surrender the policy before it matures, all benefits will be forfeited.

Once you sign up for insurance, including endowment policies, ensure you see it to its maturity in order to reap the full benefits and allow it to potentially become an asset.

2. When the risks become a reality

However, there are instances when the policy becomes an asset even before maturity. When does this happen? The answer is when a risk such as an unforeseen illness resulting in critical illness, disability or death becomes a reality. Insurance becomes an asset when you experience a risk covered in your insurance plan, which activates your coverage, allowing you to make a claim and receive a successful payout.

You may wonder if making claims will cause you to lose out on future earnings. In a word: yes, but the insurance payout you receive will help cover your expenses when addressing that risk.

3. When your dependents benefit

Life insurance that becomes payable after your death can provide a surviving spouse, children and other loved ones with the necessary funds to help maintain their standard of living. It will also help repay any debts they may have incurred, for example your treatment fees, and help pay for your children’s future education costs, if any. For many families, a combination of whole life and term insurance may provide for both current and future needs.

Speak with your financial advisor to help you assess your requirements and determine the type and amount of life insurance that is right for you and your loved ones.

Now that you have determined that insurance is an asset, learn how to grow your wealth to better secure your future and ensure your dependents’ needs are met too.


This article is written by Prudential Assurance Company Singapore Pte. Ltd.


This article is for general information only and it does not constitute an offer, recommendation or solicitation of an offer to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration. This article has not been prepared for any particular person or class of persons and it has been prepared without regard to the specific investment objectives, financial situation or particular needs of any person, and does not constitute and should not be construed as investment advice nor an investment recommendation. Where the article describes any insurance product or service, it also does not constitute an offer, recommendation or solicitation of an offer to buy or sell any insurance product or service, nor is it intended to provide insurance or financial advice.  You should seek advice from a licensed or an exempt financial adviser on the suitability of a product for you, taking into account these factors before making a commitment to purchase any product. In the event that you choose not to seek advice from a licensed or an exempt financial adviser, you should carefully consider whether the product is suitable for you.

Standard Chartered Bank (Singapore) Limited (the “Bank”) will not accept any responsibility or liability of any kind, with respect to the accuracy or completeness of the information herein. The Bank makes no representation or warranty of any kind, express, implied or statutory regarding this article or any information contained or referred to in this article. This article is distributed on the express understanding that, whilst the information in it is believed to be reliable, it has not been independently verified by the Bank.

This article is written by Prudential Assurance Company Singapore Pte. Ltd (“Prudential). Certain information in this article may be taken from external sources, which Prudential considers reliable. Prudential does not represent that this information is accurate or complete and should not be relied upon as such.