What are the types of insurance a fresh grad should buy? I know health and term life are what most people recommend. But how do I choose from the type of plans and agents?

Hey there!

You need to know the systems of the agent eg. how will he review your portfolio, how will he update you etc. Ask the technical questions, ask for a cross comparison and be real about it. The failure to discern a good agent normally lies in the failure to ask good questions on how the agent functions. This is especially important if you are getting an ILP. If the agent has a social media account, feel free to check on what is the sort of content they have, are they active, testimonials etc.

The comments below are helpful in letting you know what are the type of insurance to get.
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Healthcare

As a start, the first priority should always be healthcare. The reason is simple - medical inflation hits 10% in 2019. Consequently, a single medical treatment could potentially wipe out all your savings. Therefore, it is always good to know the healthcare insurance policies available in the market and to evaluate whether you should enhance your coverage.

More Details:

Is MediShield Life enough in Singapore?

Integrated Shield Plan Singapore: A Starter's Guide

Life Insurance

After we have set up the basic foundation, the next step will be your life coverage. This is because you are the biggest asset that you own. Therefore, greater emphasis should be placed on protecting your wealth (before we grow it further).

Generally, most insurance policies in Singapore will cover for pre-mature Death, and Total & Permanent Disability. While optional, one of the crucial coverage to have will be (early) Critical Illness.

There are many options available in the market, thus take your time to learn more about it. Alternatively, speak with your insurance agent or choose an experienced consultant who is capable of guiding you through the process.

More Details:

What is a Term Insurance Policy?

What is a Participating Whole Life Insurance Policy?

Term vs Whole Life Insurance Singapore

How much insurance coverage should You have?

As a general rule,

10% to 20% of your annual income on healthcare insurance and life insurance

Basic Life Cover = 10 times your annual income

Critical Illness Coverage = 5 times your annual income

More Details:

Understanding Your Personal Cash Flow

Having mentioned that, this is a general guideline that may or may not work for you. The best way is always to have an in-depth understanding on your cashflow, current situation and future goals. It is only when we know you well enough, then it is appropriate to give you the best advice or suggestion that fits into your needs.

Finally, work with an experienced consultant who you trust and is able to guide you through the financial planning process in a responsible manner.

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