How much insurance do you need?

Basics: life insurance, personal accident, health

not a must:Investment linked for e.g: annunities...

Types of insurance should be considered:

• Hospitalization

Essential as Singapore’s healthcare system is extremely expensive. MediShield coverage is limited. Additional coverage added to the MediShield Life is strongly recommended and covered to the maximum if the budget allows.

• Life Insurance

Adults who have dependents and mortgages are strongly recommended to be covered. When passed away or totally disabled, there should be enough cash flow for the loan and support the dependents to live for 5 years

• Care Insurance

It is mandatory by the Singapore government (CareShield Life). The protection is to allow lifetime cash flow for people who cannot perform at least 3 ADLs, then needs long-term care. The mandatory plan covers 600 per month and the additional benefit can be up to 1200+ with the premium fully covered by CPF Medisave.

• (Early) Critical Illness Insurance

It is recommended that the bread-winners of the family be insured with the protection against (early) critical illness. The coverage recommended is 1-year of income for ECI and 3-year of income for CI. The coverage amount serves as the income loss replacement as well as covering additional medical costs.

• Accident Insurance

If covered fully with Health, Life, CI, and Care insurance, additional accident insurance is only good-to-have. It can be considered as the additional coverage for “accidents” but the probability of accidents is low and normally the coverage amount provided by this type of insurance is low. It can be a choice if you are outdoor activity and extreme sports lover

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Principles

• Insure the income earners first
• Hospitalisation plan are the most essential ones
• Buy term and invest the rest

The priority should be

• All family members’ hospitalisation insurance
• Income earners’ life insurance
• Income earners’ disability insurance
• Income earners’ critical illness (CI ECI Multipay CI depend on budget)
• Dependents’ critical illness
• Accident insurance as optional

CI

Life

Hospitalization

Depending on your requirements, you need the following

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1 CI

1 PA

1 retirement (depending on your age)

1 life (for dependents)

1 hospitalization

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If you're uneligible for protection based insurance for any reason, buy term as a backup.