I’ve just gotten my ISP insurance. What other insurance should i be getting next?

Hi anon,

It's great that you have settled your integrated shield plan already. I presume you are working full time, in which case you have to protect the most valuable thing you have: Your income earning ability.

There are a few things that can derail this, so you'll need to cover yourself for the following things:

1. Income protection in the event of Critical Illness. This provides a sum of money for you to cover your day to day 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 can be via a limited payment life plan, or a term plan, or a multipay plan, depending on your budget/needs. Many insurers offer such plans but not all plans are similar and you should take time to understand the differences, for example, scope of coverage, payout structure, premiums, etc.

2. Income protection against Death. This provides a lump sum of money should something happen to you. Not mandatory if you have no dependents or liabilities. Do ask yourself if the $300/mth allowance that you give your parents is essential for them or really out of fillial piety. Coverage usually takes the form of a term plan if you eventually need one. For the coverage amount, you could use a multiple such as 10 x of your current income, or calculate based on your current liabilities.

3. Personal Accident. For the minor stuff like TCM claims, etc.

Generally, you should not have to spend more than 10% of your income on coverage.

You can work with an independent financial advisor who can provide multiple options and explain in detail what you will need to know about the types of insurance as well as the options from various insurers before you come to a decision, especially with respect to cost effectiveness as well as the minor differences between the plans.

You will want to be comfortable to share your fiinancial details with your advisor as that will be important for the advisor to consider your current situation before suggesting suitable solutions.

Generally, there are three types of insurance coverage needs over time:

1. Accident & Health;

2. Critical Illness;

3. Basic Life Cover.

Given that you have your integrated shield plan (I'm assuming adequate cover), the next step may be to look into Critical Illness coverage. After all, life insurance hedges against three major risks in life:

1. Dying too early;

2. Inability to work till retirement;

3. Exhausting hard-earned savings too quickly.

Accordingly, this may be an area that you wish to explore onto.

Read More (Part 1.2): 3 Types of Insurance Policies in Singapore

In order to ensure holistic financial planning, you should speak with your insurance agent who knows you well. Thereupon, he or she will be in the best position to guide you through the entire planning process. In effect, this creates clarity into the future. From there, it becomes clear on your own insurance needs over time.

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