I am 30-year-old this year with a newborn daughter. What insurance plan should I get?

Hi Anon,

Congrats on your new born! I'll break down the analysis into two parts.

For your daughter

Without a doubt, the first insurance you need to get for your daughter will be a hospitalization plan.

This covers any hospital bills and associated pre/post hospitalization costs. This would be from an integrated shield plan, with a rider to take care of the deductible/co-insurance. Depending on your budget, you can take a private hospital plan and downgrade later, or just go for Goverment A ward. The rider is important in order to cap your maximium out of pocket costs.

Following that, I would say that you can consider an education plan if you wish to set aside some funds to deal with education costs in future. Such plans will grow your money in a safe manner and it will mature around 18-25 years in future, so that funds can be made available for school fees (university fees will be huge in 20 years). If your child manages to get a scholarship in future, the money is still yours as you are the policyowner.

If budget permits, a whole of life critical illness plan can also be considered. Due to the age of a child, the premiums will be extremely low. As a live data point, a recent client of mine purchased a lifetime of $200K CI/early CI cover for their son and it cost $197/mth for 10 years (they are done with the premium when he turns 11).

Some see this as a gift of love, but I personally think that the more important thing is insurability. I have come across a young student aged 21 who was diagnosed with lupus at the age of 18. She is completely unable to buy critical illness cover now, and can only rely on a $50K late CI plan her father bought for her when she was 1 year old. At least she still has some coverage even before she started working.

An accident plan will be important once your child starts to learn to walk and run, as they are more inclined to get bumps and bruises, fall down, etc. They are also prone to things such as HFMD and some accident plans will cover such things.

If budget is tight, just focus on the hospitalization plan first. That's pretty much non-negotiable. The rest really depends on your cashflow, but will definitely be helpful.

For you and your wife

The number one priority is a hospitalization plan. This is important as it covers any hospital bills and associated pre/post hospitalization costs. You need it in the event you are hospitalized and your company insurance is unable to cover the full costs.

Next, you need to get critical illness coverage. This provides a sum of money for you to cover your expenses and other out of pocket costs should you fall critically ill and are not able to work. Usually recommended to cover at least 5 years of expenses and an additional sum to cover out of pocket. This is usually via a limited payment life plan, or a term plan, depending on your budget/needs.

If either of you is diagnosed with a critical illness, the income earning capability of the family is affected. CI payouts provide the liquidity so that your family can continue to meet financial obligations such as putting food on the table, and paying the bills, etc, while the affected person recovers from the illness.

Both of you also need coverage in the event of death. This provides a lump sum of money should something happen to you. Now that you have a dependent (your daughter) and maybe a mortgage, there will be a need for you to ensure that should the worst case scenario occur and one party passes away and all future income is lost, there will be financial assistance to the surviving family members in the form of a payout . The payout is so that money is available for the family to ensure that future expenses can still be met

Lastly, as you are in your 30s, do look at long term care as well. You would be enrolled into Careshield Life (CSL) and you will have the option to upgrade your coverage. CSL payouts are meant to cover the cost of nursing care, etc, should you become severely disabled, and this is something that is more likely to be claimed in future rather than now. However, upgrading the coverage (by increasing the payout) ensures that should the worst happen in your later years, the financial strain on your family and your children will be lessened.​​​

First priority is H&S for you and your child. Then income replacement plans that focus on Death & TPD & CI. Personal Accident (PA) is good for minor unexpected events.

Hi,

Firstly, Congrats on your newborn!

Now that you are in the next stage of your life, there will be greater responsibility placed upon you and your wife. You will not only need to provide for yourself but also your family as well as you and your wife's parents. Hence, I am really glad that you understand the importance of getting insurance.

These are the type of insurance that you and your wife will need to consider at this stage of your life:

1. Integrated Shield Plan (Hospitalisation)

2. Income Protection Plan

3. Death/TPD coverage

4. ECI for daughter

5. Personal Accident

6. Wealth

Firstly, I believe you would understand the importance of getting an Integrated Shield plan in Singapore. This should be the most important plan that you and your family should get.

The second most important insurance plan to get will be Income Protection plan, to insure you and your wife's income. The ability to earn an income is definitely you and your wife's greatest asset right now and should be prioritised. An Income Protection plan will cover you and your wife's monthly income as long as you or your wife is unable to work due to illness or injury resulting in a loss or reduction in income, up to retirement age. Depending on your budget, Income Protection plan is more than enough to cover one's ECI and CI needs too because your treatment will be covered for under the integrated shield plan and your monthly income will also be covered for. The payout from ECI or CI plan will thus be redundant. Income protection plan is also alot cheaper than an ECI and CI plan.

Death/TPD coverage will be useful for things like housing loans etc. So if anything will to happen, at least the payout can be used to settle any loans left behind. Depending on your budget, term plan will be alot cheaper than a whole life plan.

ECI coverage is still needed for your daughter because in case of any illness, most likely one of you or your wife may need to take long term leave to look after your daughter. The payout will be useful as an income replacement for that period of time.

Personal Accident plan is also good to have because it covers from major disability to even less severe injury like sprains or falls. The premium is very cheap too for a large coverage. At only $520/year, Great Eastern's Great Protector Active provides up to $2.25 million of coverage.

The above 5 kind of insurance are what is important for you and your wife at this stage of your life. Retirement and Education planning will only come after these five protection needs are taken care of.

Feel free to contact me (email at bio) if you are interested to find out more in details regarding these insurance plans. I will be glad to help you.

Cheers.

Hi there,

There are these things everyone should find coverage for:

1) Hospitalization

2) Critical Illness (CI)

3) Death/TPD

4) Personal Accident

As a rule of thumb, death/TPD coverage should range approximately 10x your annual income and CI coverage should range approximately 5x your annual income. This is because statistically it takes a few years for people to recover from their CI incidence (depending on CI type and severity) And find employment after.

In general, hospitalization coverage can be easily obtained through an Integrated Shield Plan (hospital plan in layman). It covers admission and surgeries. This is the most fundamental coverage everyone should have. Hospital plans typically come with riders and I'll highly encourage you to get it, for the reason that riders cover deductibles (flat rate ward-associated costs) and co-insurance (a cost that comprises 10% of your bill less deductibles). How a hospital plan works is that it covers your hospital bills by reimbursing it To you. Your ISP is payable by Medisave while the rider is payable by cash.

The next thing is to obtain coverage for CI and death/TPD. CI coverage is really more for yourself while death/TPD is more for your family. There are different strategies to go about it. You can either get a whole life plan that covers death/TPD and CI. Your CI coverage for a life plan comes through a CI rider. If you are looking for limited payment (paying only for say 12 or 20 years) with cash value, you can look at a whole life plan. Do note that your CI rider is by default accelerating ie. it accelerates your CI benefits and reduces your death benefit as a result. And for this reason, people may want to look at getting a term plan instead since they may want to separate their death and CI coverage

You can look also at getting a pure term plan that covers only death/TPD and get a multi-pay CI plan to cover for CI. Term plans are highly affordable and offers high coverage And is great for hedging against liabilities. Multi-pay CI plans typically cover for multiple claims for relapses or different CI occurrences and some even has a premium-waiver riders that waive off your premiums in the event of a CI occurrence so this ensures your plan continues even if you're unable to finance it. This is typically a more affordable way (art the start) of insuring yourself compared to getting a whole life plan. The reason is because your payments are spread out over the period you're insured while for whole life plans, your payments are compressed.

Which strategy ultimately depends on your preferences and needs. If you feel you may need a major cash outlay soon, then you may want to opt for the latter strategy. However if you feel you want a limited payment because you're not confident if you can continue paying for your plans all the way, a whole life plan will work.

Ultimately do seek the advice of a licensed financial advisor to explore your options. All the best!

Financial planning is an integral part of life. You can reach me here to find out more.