By Reico Wong

MENTION the word "insurance" and most people tend to yawn, change the topic or, in some cases, literally vanish.

It is undeniable that the subject becomes unbearable when pesky insurance agents descend on you and try to shove different products down your throat.

However, the benefits of getting insured is apparent in the long term, as adequate insurance coverage is a necessity.

The time to seek cover is when one is young and healthy, as insurers grant full coverage and at a lower premium.

But, more importantly, insurance coverage is critical as one's future is unpredictable.

Individuals will also want to think about their dependants - parents, as they become older and unable to work; one's spouse, who may be tied down by financial obligations like home-mortgage and other personal loans; and one's children, to fund their education.

Besides death, other tragedies can occur. Then, hospitalisation and health-care bills will be an immense burden. You do not want to drain your loved ones' savings.

Life insurance is one of the most basic, yet critical, types of policies you should have.

Life insurance is a contract between an insurer and a policyholder, where the insurer agrees to pay a designated beneficiary a sum of money upon the contracted individual's death and, in some cases, if the individual becomes critically ill or suffers from a permanent disability.

In return, the policyholder pays a stipulated premium, either at regular intervals or in a lump sum.

According to the latest statistics from the Life Insurance Association of Singapore (LIA), the industry paid out a total of $1.85 billion to policyholders and beneficiaries as of end June.

Of this, $210 million was related to death, critical-illness or disability claims, while the remaining $1.64 billion went to policies that had matured.

With more than 140 registered insurers in Singapore offering a wide variety of life-insurance policies, it is no surprise that even those interested in the product may feel overwhelmed and not know where to start looking.