Coming to my 30s, I'm reviewing insurance to ensure that I am well covered - am I under- or over-insured? Would like to seek some advice before getting more insurances if required.

Hi anon,

​

Some comments on your current portfolio (not meant to be taken as financial advice):

1. Your hospitalization plan is ok. No need to change
2. I'm presuming your WL is a $100K with x2 multiplier fully on ECI? So total of $200K ECI cover at the moment? Given MAS guidelines of 4x annual income you seem underinsured and may want to consider increasing that bit.
3. Endowment is fine, just make sure you're not too stretched.
4. Group term (GTL/GPI): Try to maximize it, it is cheap.

To address your questions.

1. The key is to address anyone who is dependent on your in the event you are no longer around (Death) which would be your parents in this case. However, many people may not realize that TPD is also equally important, in the event that Total incapacitation stops you from working. This is critical because if you're alive and unable to work, where is the money going to come from? At this point even 10x may not be quite enough. The case of the brickland banker, while extreme in terms of the loss of income, is something that can happen to anyone (https://www.straitstimes.com/singapore/136m-payout-for-cyclist-hurt-in-road-accident). Yes, no medical underwriting for up to $300K for GTL.
2. 5x annual income is a good number because your annual income will continue to increase, after all you are still young. Considering that you already have a whole life as a base plan, adding a term would be a viable option. I'd suggest taking a look at multipay plans as they have evolved a lot over the years and offer reasonable coverage for a small increment in premium over single payout plans. The age old question of how long a CI term plan should cover until is hard to answer because what if you get a plan till 70 and CI strikes at 72? Or if you get a CI plan till 75 and something happens at 78? However do look at the numbers for both ages and then you may be able to justify one option over the other, either due to cost, or perhaps your predicted ability to finance the plans. More importantly is the action of increasing your coverage; the door is open when you're healthy, and starts to close once you have health issues, so doing this when young and health is paramount.
3. Yes. That is known as accelerated payout and should be taken into account when sizing your coverage. Example if you have a $1M term plan with $300K accelerated CI payout, a CI payout will give you $300K first, and then $700K is left for death. On the other hand, a plan with an additional payout (as opposed to accelerated payout) CI rider, with a similar coverage as above, means that $300K is paid on CI, and there is STILL $1M left on death. So either factor more Death or TPD coverage, or consider standalone CI plans, or CI riders that are of the additional payout nature.
4. Statistics I have access to show that the bulk of claims are 3 or more ADL, so I personally went for SL CSL Standard. The general premium increase for SL CSL Plus (20% vs CSL Standard) for the same amount of payout (e.g. $2K/mth) is not justified for myself. Another thing to note is that you really should think about how much payout you'd minimally want in the event of severe disability and not limit yourself by the Medisave Withdrawal Limit.
5. In my view its optional but nice to have. TCM benefits are probably the key highlight, because if you're getting an accident plan to protect against accidental death, then you really should be worried about death due to any reason and not just an accident.

Hope that answers your questions.