How to calculate the sum assured for a Prudential life insurance policy in Singapore

To calculate the sum assured for a Prudential life insurance policy in Singapore, you would typically consider several factors and follow these steps:

  1. Determine your financial needs: Assess your financial obligations, such as outstanding debts, mortgage, education expenses, and income replacement for your family. The sum assured should be sufficient to cover these needs in the event of your death.
  2. Consider your lifestyle and future goals: Take into account your family’s lifestyle and future aspirations, such as maintaining their current standard of living, funding children’s education, or ensuring retirement savings. These factors can influence the sum assured.
  3. Calculate outstanding debts: Determine the total amount of outstanding debts you would want the insurance coverage to pay off. This may include mortgages, personal loans, or credit card debts.
  4. Estimate future expenses: Consider the financial needs of your dependents, including living expenses, education costs, and any other future expenses they may have. Factor in inflation to ensure the sum assured retains its value over time.
  5. Assess your income replacement needs: Calculate the income your family would need if you were no longer there to provide for them. This can be a multiple of your annual income or a fixed amount to sustain their lifestyle.
  6. Evaluate existing coverage: If you already have existing life insurance coverage, take it into account when calculating the sum assured. Subtract any existing policies’ death benefit from the required sum assured.
  7. Consult a financial advisor: To ensure an accurate assessment, consider consulting a financial advisor or insurance agent from Prudential. They can help analyze your specific circumstances and provide personalized guidance.

Remember, the sum assured is a personal decision and should align with your individual circumstances and financial goals.