Is paying close to 5k per year on the major insurance counted as a lot for someone who is earning a gross salary of 3k?

It depends on what type of insurance that you are classifying as major.

In most cases, the general rule is to spend 10% to 20% of your annual income on insurance policies. Such includes life insurance, critical illness insurance, as well as on accident and healthcare.

In your case, you should spend between $3.6k to $7.2k annually on your insurance policies. Of course, this numbers vary for each individual, depending on your actual needs, e.g. family’s medical history, dependents that you need to take care of, loans that you need to clear.

Additionally, it is worthy to note that the above mentioned numbers does not form the lower and upper bound on how much you should spend on insurance. For instance, you may be a high income earner. As a result, you spend less than 10% of your annual income on insurance coverage.

Finally, the best way is to know whether you are under insured or overpaying for your insurance premium is to have a comprehensive insurance portfolio summary and through an in-depth financial analysis. This way, you will be confident that you are getting the right insurance coverage. Here is some information about it: https://www.blog.pzl.sg/why-every-client-needs-...

Hi anon,

As a general rule of thumb, you should not be allocating more than 10% of your gross salary on insurance.

At $5000/yr, that is around $415/mth, which is more than 10% of your gross. Almost 14% in fact. Unless you have loading on your insurance, or you are a smoker, 14% is a little high and you might have room to optimize your premiums. You might want to get a second opinion on your existing insurance portfolio from an independent financial advisor such as myself.

Do note that I would not consider ILP/endowments, etc to be 'major insurance'. Those are more for wealth accumulation.

Feel free to reply to this post if you have further questions.