Recession typically spells bad news for most, with companies and firms facing lower sales volumes, needing to lay off workers, causing higher unemployment amongst the working population, which causes overall consumption and demand to fall as well, causing the whole economy to decline significantly in output.

Recession & inflation

So, is Singapore expected to go into recession? Although the economic climate has been undergoing much volatility, uncertainty and risks, Minister of State for Trade and Industry Alvin Tan maintains that Singapore is unlikely to face a major recession for now.

This probably holds true for this year as well as in 2023, but it does not mean that there is no risk of further deterioration and risks to our economy in the next few years.

Although Singapore’s economy has not declined yet, overall growth is headed towards sluggishness and slowing down, with a volatile and uncertain outlook for the year ahead.

On the contrary, one of the major risks that we are currently facing would be the high and persistent inflation putting continuous upward pressure on the prices of our food, utilities, transport and more. With Singapore’s core inflation rising to 4.4 per cent in June 2022, the highest since November 2008, it is becoming an increasingly pressing problem for many Singaporeans.

Buying insurance during recession

When the economy is facing recession, would you still continue to buy insurance?

For many types of insurance, including life, health, home and car insurance policies, many insurers may see a downturn in their customers and premiums. This is probably due to customers needing to save their money for other necessities and expenses, therefore choosing to shrink their coverage on their insurance policies.

Premiums may also increase if the recession is prolonged, because insurers would begin to see underwriting losses due to loss of customer pools.

Hence, it would be ideal to quickly lock in lower premiums before prices rise even further.

Here are some reasons why insurance is still as important as ever, if not even more essential, when the economy is not doing well. This holds especially true for life and health/medical insurance, which are the two you should never skimp on, as it involves the most important thing – your health.

1. Ever more important to protect your family

Life can be unpredictable, with ups and downs every turn of the way. Just like the peaks and troughs of the business cycle causing upturns and recessions of the economy, life can have its own ups and downs.

In the case of sudden medical emergencies, accidents or even onset of illnesses, your family’s lives and health could be put at major risk. What’s more, without insurance, your financial protection would be gone as well.

We all know that Singapore’s healthcare system is world-class, but hefty fees still apply especially for major diagnoses such as cancer which involve lengthy and long-term treatment.

During periods of recession, economic downturn, and inflation, everything is more expensive, and your job and sources of income become even more unstable and uncertain. What if you or your family member was diagnosed with a health concern and you get laid off and lose your job?

In this unfortunate scenario, you may not have enough cash to pay for your medical bills, which may cause worsening health, as well as a great deal of frustration and worry about your increasing expenses amidst lower purchasing power, higher prices and a slumped economy.

2. Financial safety net

In the case of life insurance, if an insured person were to pass on, the deceased’s family would be able to use the sum assured from life insurance to cover the costs of one’s funeral, outstanding bills and debts and more.

Without life insurance, the family members of the insured person would have to fork out all these costs by themselves, and this may be even more challenging and difficult when there is recession, and unemployment is more prevalent.

3. Life insurance preserves its value

During economic downturns like recessions, one may end up in credit card debts due to overall lowered household incomes.

Investors may also face stock market volatility and lose a great deal of their investment sums if they had parked a great proportion of their savings into risky assets and stocks, which may potentially lose much value, especially when the stock market and the economy are not doing well.

On the contrary, life and health insurance policies preserve their value and you will be able to get your payouts without losing the money in your policy and insurance portfolios. This is because insurance plans do not depend on the volatility of the economic market conditions, and are a safe and secure way to protect your assets.

4. Start early

Many may think that insurance is only for those who have increasing risks of falling sick, or passing on. However, that is a misconception, because insurance premiums are minimised when you start purchasing insurance whilst young and healthy.

This helps you to keep your future monthly premiums as low as possible, which helps you to save money, all while being adequately covered and protected, in the long term.

Life & health insurance reviewed

Frankly speaking, regardless of whether the economy is booming or in a downturn, health and life insurance is always a must, to keep you and your family well-protected at times of crisis and emergencies. Ensure your financial protection and coverage by getting a deeper understanding of insurance.

Great Eastern Whole Life Insurance

Great Eastern offers a robust variety of life insurance products, including competitively priced term life DPI plans for seniors and slightly above average cost whole life DPI plans. With affordable and above average coverage, Great Eastern’s plans are also customisable and include critical illness covers.

FWD Term Life Insurance

FWD offers competitively priced term life insurance for most demographics. The term life plans offered by them are very affordable and are especially suitable for younger consumers.

Premiums tend to be 15 per cent-20 per cent lower than the market average while offering similar coverage to other classic Direct Purchase Insurance (DPI) term life policies, with up to $400,000 of death, terminal illness & total and permanent disability coverage (TPD).

Promotions:

NTUC Income Enhanced IncomeShield Health Insurance

NTUC Income Enhanced IncomeShield Health Insurance would be a great option for those who want to save on public hospital Integrated Shield Plans. Income offers low premiums and is an affordable choice for those looking for affordable public hospital coverage and B2 ward plans that offer full coverage.

Get in Touch Get in Touch Consider this if you want affordable family coverage for A wards Read Review

• Co-Insurance
  • 10 per cent

• Hospital Type
  • Public B1 Ward

• Eligibility Requirement
  • Singapore Citizens, Permanent Residents, Foreigners

• Last Entry Age
  • 75 (Age Next Birthday)

Benefits	Benefit Limit	Ward A Avg.
Annual Limit	$500,000	$528,571
Hospitalisation & Surgical Benefits	As Charged	As Charged
Pre-Hospitalisation (Days)	100	120
Post-Hospitalisation (Days)	100	180
Outpatient Cancer Treatment	As Charged	As Charged
Pregnancy & Childbirth Complications	As Charged	As Charged
Prosthesis Benefit	$6,000	$8,286

Manulife LifeReady Plus (II)

Manulife LifeReady Plus (II) is a life insurance option that has a retrenchment benefit, a much appreciated feature in this recession. This plan is also highly customisable, Allowing you to optionally add critical illness coverage, and opt to convert the cash value from your policy into annual payouts with interest.

This plan also allows you to increase your coverage without a medical check-up at certain milestones. This makes the LifeReady Plus (II) plan a good option for someone looking for a life insurance policy that is able to adapt to their changing needs.

Conclusion

Insurance helps to maintain a peace of mind for everyone, with many insurers in Singapore providing comprehensive coverage and protection for everyone. Regardless of the economic situation that we are all in at the moment, insurance is the necessary safety net for you and your family, to offer you the best financial stability and protection whatever happens in the future.

Feel free to check out our insurance page for more!