How much of my income should I use for insurance?

Hi Anon,

Generally, I spend around 10-15% of my income on insurance products. According to the Life Insurance Association of Singapore, the recommended amount of coverage for basic life cover is around 9-10 times your annual earnings. Of course, this will differ across individuals.

At PolicyPal, we recognize that your insurance needs differ based on your financial objectives and circumstances. True to our mission to help people make the right choice for their protection needs and provide affordable financial products, we provide free financial portfolio review to help you create a suitable financial plan.

We have also launched Life Stage which is a tool within our app that uses data to construct a person’s profile and compares them against similar profiles and their protection and savings portfolio. You can use it to understand what and how much you need at your current phase of life. This will help you understand your coverage requirements better.

There's no at least but at most, as mentioned by Elijah.

Focus on getting the essential cover first such as:

1. Hospitalisation plan + rider for you and your family

2. Term life + CI for whoever's earning income or being depended on

3. Disability income insurance for the breadwinner especially

Note that you don't have to get the exact same set of insurance for everyone. Breadwinners and income earners need more coverage.

Also, depending on the nature of your job, personal accident insurance may or may not be essential... for desk jobs, it isn't.

Other stuff like standalone CI and ECI aren't cheap but feel free to consider them if you have enough bandwidth and you are at risk (e.g. (touchwood) parents had CI like cancer). But if you are at serious risk, the insurer may also exclude some coverage...

Lastly, I got my insurance coverage through MoneyOwl and MINDEF. Consider checking them out.