Term Insurance
True to its namesake, term insurance simply provides coverage for a period (aka term). It is widely considered to be the most bang for your buck insurance simply because it has no cash value. It protects your wealth against:

1) Death
Death is an unfortunate event wherein a person dies (I know, crazy right?). When a person passes on, his responsibilities do not simply disappear. They are passed on to his loved ones. For instance, any debt a person carries when he is alive will be pushed onto his next-of-kin. Insurance then provides a sum to cover any existing debt as well as responsibilities. Generally, people are recommended to cover themselves for around 10 times of their annual income for death coverage.

2) Total and Permanent Disability
Total and Permanent Disability (TPD) is a condition where a person is unable to work due to injuries. This often involves not being able to use certain limbs or even loss of sight. Without the ability to work, a person will experience a loss of income. That is where the insurance pay out comes to play. It will serve to help the injured with his living expenses as well as any debt he may be servicing. Akin to death, coverage for TPD is recommended to stand at around 10 times of a person’s annual income.

3) Critical Illness
Critical Illness (CI) is any major illness such as cancer, heart attack or even stroke. In Singapore, the Life Insurance Association (LIA) has 37 clearly defined critical illnesses for which you can claim insurance for. Much like TPD insurance, CI insurance will pay out to cover any living expenses as well as debt. Unlike TPD insurance, however, there is a good chance that you will beat the critical illness and resume your working life. Therefore, you will need less CI coverage. It is recommended that you cover yourself for around 5 times your annual income for CI coverage.