facebookAre there available standardised computation templates that we can rely upon to work out our protection needs and gaps? - Seedly

Me

09 Oct 2019

โˆ™

Insurance

Are there available standardised computation templates that we can rely upon to work out our protection needs and gaps?

Would like to be able to work out my own plan without going through a financial consultant?

Discussion (5)

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Eric Chia

09 Oct 2019

Senior Financial Consultant at Prudential

I'll share the resources here (since you prefer not to go through a financial consultant) but I need to highlight that having a standardised calculator wouldn't be as good as having a human touch to the calculations. You won't know your blindspot unless someone points out to you. If you are to run through the calculations by yourself, be sure to have an experienced and trusted family or friend to check that the assumptions you make are right and that you're not biased in the assumptions or miss out any critical variable for consideration.

LIA also has a neat calculator that you can use. You may like to take Life Insurance Association's (LIA) rule of thumb (see link for the assumptions that make up the rule of thumb), which goes as follows:

  • Death coverage should be 10 times annual income, e.g. if your annual income is $40,000, then your death coverage should be $400,000
  • Critical illnesses coverage should be 5 times annual income, e.g. if your annual income is $40,000, then your critical illnesses coverage should be $200,000

Hope this information helps!

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Loh Tat Tian

08 Oct 2019

Founder at PolicyWoke (We Buy Insurance Policies)

There are hard numbers that you can input to calculate the amount of protection needs and gaps. But what may work for you, may not be necessary for others.

That's why it's important to tag a protection value on various items. Last time, DIY Insurance (Now MoneyOwl) have a template which you can use.

Common ones are Life insurance -- mainly for dependents. You have to think of what happens after you report early with passport stamped. So to calculate it, either pure expense based right up to university for children + parents expenses + charity (if any).

ECI/CI insurance -- mainly for your own income, savings required during the time of sickness, and also alternative medication not covered under the hospitalisation insurance -- might also have a change of job, or lifestyle change. Hence good to calculate the amount required.

Total Permanent Disability (TPD) - This will include Death coverage + additional medical/nursing expenses required for you due to TPD. This will be crazy to insure though if you cover everything.

Hospital insurance -- no need to calculate, but just have it to reduce medical expenses (if required).

Hope this helps.

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