Asked by Anonymous
Asked on 03 Oct 2018
Did consider to buy savings insurance previously but think will invest in SSB instead.
Top Contributor (Nov)
Hi Anon, the purpose of life insurance is to protect and replace the income that was supposed to be generated from the insured person.
The rules of thumb advised by LIA is to get:
Death & Permanent Disability Cover of 10 -15 X Your Annual Income
Critical Illness Cover of 3 -5 X Your Annual Income
Thus, if any of the above scenarios were to happen, your family can continue life as is, without sacrificing on their quality of life. Kids still get to go to school and there's less pressure on the spouse to make up for that loss of income.
In the event of Critical Illness like Cancer, Stroke, Heart Attack, the insured will still be around, but he/she would need to stop work to recover. Usually you'll be able to get back on your feet in 3 - 5 years. While your hospitalization plan should pay for all your bills, that CI payout is to make sure you can focus on recovering quickly.
And you can choose to protect these for a term or for the whole of your life. My clients usually do some term, some whole life. Coverage is important, but cashflow is important as well, so do strike a balance on your % of income that pays for insurance.
In in terms of basic protection, to have the five limbs (Death, TPD, CI, Hospitalisation & Accident) covered would be considered sufficient. However for your life plan with CI coverage you might want to take note of the period when you bought the policy and the coverage of it. Generally plans with CI coverage bought before 2012 does not cover early critical stages. so it might be something you might want to take note of as well and check with your adviser.
Or if you’d like a second opinion, you can contact me at m.me/mabeltanyuling. Cheers!
All the best!
If you have enough money, just make sure you at least have a simple CI cover. For me, i just feel that 1st is hospitalization, 2nd is critical illness and 3rd is life insurance (prefer term). Just my opinion.
Hospitalisation + term life + disability income insurance should be good.
You need ECI coverage with a rider but the problem is that ECI is usually very expensive.
for saving insurance or ssb...
lets say today if insurance can offer u 2.15% per annum for 3/5years. vs a ssb 3years at 2.28% which 1 will u choose?
i share with my client ssb is not guaranteed in terms of interest but capital guaranteed. secondly, if death occurs, insurance company offer death benefit of a % on your net capital.
most of my wise clients will pick the choice of putting their savings into insurance company.
likewise for endownment plans or retirement plans... they have insurance features to cover your savings should anything happen to you. whereas your normal Fixed deposit, ssb, your normal saving accounts dont give these type of insurance benefits.
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if u need advisory and purchase of products, you know who to look for..