By Genevieve Cua

INSURANCE is a product that you may not quite appreciate until you need it. There are a number of risks that could seriously burn a hole in your finances. These include death, accidents and a prolonged illness.

Yet, insurance is also one of the items that people tend to procrastinate over. Some may even feel reluctant to purchase in the mistaken belief that they get no 'returns' from it. Peace of mind, however, is a benefit that may be difficult to put a price on.

Singapore is a fairly mature market for insurance. It is often said that most individuals own at least one policy. Yet, the average insurance payout for death and disability, based on the second quarter data from the Life Insurance Association, is just $47,000.

An often-cited survey by the LIA in 2007 found that the average policyholder is under-insured by as much as $362,000 or 75 per cent. It found that the average worker had just $118,000 in life cover, when he or she needed $480,000.

This piece is the second of two parts. The first part published last month dealt with insurance products that are bundled with an investment or savings feature. Such plans will earn a cash value after a number of years.

Some examples of bundled products are endowment and whole life plans. This piece will focus on protection.