Quora Answer: How Does Life Insurance Work?

The following is my answer to a Quora question: “How does life insurance work?”

In Singapore, life insurance pays out upon the death of the life insured.  Should the policy also cover disability or critical illness, it may pay out upon confirmation of disability, and diagnosis of critical illness.  For disability, it is the inability to perform at least three of the six activities of daily living: washing, dressing, using the toilet, feeding, moving around, and transferring yourself, such as from bed to chair.  For critical illness, the diagnosis has to be or confirmed, by the panel doctors.  In the case of accidental death, the policy pays out upon supply of the certificate of death and the coroner’s report.  Death by natural causes requires only the certificate of death.  The policy is normally paid out by cheque.  This process does not take long.