Asked by Anonymous
Just started my first job n get 3k after CPF, I have an existing hospitalisation plan for $200 per annum. Do you think that's a reasonable price to pay/mth? Coverage from now till 65 is 220k lump sum, after 65 years old is 55k + amount of money i put in till then. Are there other better plans? I have an autoimmune disease that affects my kidney as well.
Top Contributor (Nov)
My advice is take your time to understand the different insurance and their functions.
The two important insurance as a single are
1) H&S: covers your hospitalisation.
2) CI & TPD. Hence a protection plan of 5X your income ensures you meet your expenses, and also savings rate. Not too high (which makes you worth more dead than alive and also very high insurance cost), not too Low where the help could only tide you 2 years (CI recovery are typical 3-4, some even 5 years).
TPD is tricky because the nursing charges are high especially at a young age, and slowly taper down as you age (assuming you,live till 85)
3) Death cover is more for dependents
4) PA is a cheaper alternative, but covers only accidents
5) DI can be a substitute to CI, But is more worth it for high income professionals.
when you say reasonable amount, that can only be answered by understanding what you require to protect with insurance.
You can look at alternative type of BTIR. But do your due diligence to compare the following:
Critical illness benefit to BTIR, understand pass 65, can your investment be more than or = CI payout benefit.
your kidney condition could cause to have exclusion clause, and/or loading to the insurance. It may not be worth to even cover. But please do your due diligence.
There are also some other factors, like your current pay and future pay, whether it's better to insure slightly higher (assuming salary will increase).
This can only be answered by doing scenario planning. At 18, when getting married, how many kids, going to upgrade to condo? There are so many variables that is difficult to give a "best" solution.
You can cover enough ground for most situation, but there is no best solution because best only apply to specific situations.
There are certain rule of thumbs for the amount of coverage that you require. You may take your case on from there. But do note that these are general guidelines and not 100% applicable or apply to your case.
Death coverage: 7-10 times your annual salary
Critical illness coverage: 4- 5 times your annual salary.
Hospital coverage: 100% coverage up till government hospital minimally.
Look at what it cost to get the above and it should be roughly what u are looking to pay for your insurance.
what is your occupation.. normally i see your occupation to see the prospect of higher incement in income. example, my client is a junior judge, future judge and thus i recomnend him a term as it covers much more as both of us understood that his income will jump exponentially. investment separately. for your case, GE agent propose a whole life.. maybe at that point of discussion with your agent, you prefer to see money when you buy coverage which i dunnoe. unless i know more details.. otherwise my solution is stated above.