How to get started with insurance as a fresh grad?

Hi Martin,

A good way to start as a fresh grad is to think about insurance in terms of what would cause the biggest financial shock if it happened right now. This keeps things simple and stops you from buying things you do not actually need yet.

​

1) Hospitalisation plan
This is usually the first thing to settle because one medical event can drain savings quickly. You do not need the priciest option. Look for something solid and affordable that covers major bills.

​

2) Income protection or basic life and TPD coverage
Your main financial asset at this stage is your future income. A disability income plan or a simple death and TPD plan protects that earning power. This is usually more important than life insurance unless you already have dependants.

​

3) Critical Illness
CI provides cash during recovery. As a fresh grad, you do not need a large amount. A modest layer is enough to ease financial stress if something unexpected happens.

​

Build up slowly and keep flexibility
You do not need to settle every type of coverage immediately. Start with the essentials, keep your commitments manageable, and upgrade as your income grows. Many people overcommit early and feel stuck later, so pacing yourself is healthier.

If you prefer to plan based on numbers, a simple calculation of your income, current commitments and the buffer you want can help you decide the right level of coverage. It keeps things objective and prevents overspending.

Hi Martin,

​

When it comes to insurance coverage, a general rule of thumb is:

• 9x your annual income for death and total permanent disability (TPD) coverage.

• 4x your annual income for critical illness coverage.

• 2x your annual income for early critical illness coverage.

​

In my opinion, it’s essential to prioritize building your base protection (such as hospitalisation and life plans) before considering savings or investment plans for retirement. That said, if your budget allows, it’s ideal to address both concurrently.

​

As for how much you should allocate:

• 10-15% of your annual income should go toward protection.

• 10-20% of your annual income can be allocated toward investments and/or savings.

NTUC is low cost

Hospitalisation first