Hi Val, I am a fresh grad and looking to start buying insurance gradually since I don't have any now and am looking to pay for my own insurance. What are the different types of insurance plans?

Hi anon,

If you have already settled your emergency funds, then in order of importance, here is what you should be looking at:

1. Hospitalization plan. This covers any hospital bills and associated pre/post hospitalization costs. This would be from an integrated shield plan, with a rider to take care of the deductible/co-insurance. Depending on your budget, you can take a private hospital plan and downgrade later, or just go for Goverment A ward.

2. Critical Illness coverage. This provides a sum of money for you to cover your expenses and other out of pocket costs should you fall critically ill and are not able to work. Usually recommended to cover at least 5 years of expenses and an additional sum to cover out of pocket. This is usually via a limited payment life plan, or a term plan, depending on your budget/needs

3. Death coverage. This provides a lump sum of money should something happen to you. Not mandatory if you have no dependents or liabilities. Usually takes the form of a term plan. For the coverage amount, you could use a multiple such as 10 x of your current income, or calculate based on your current liabilities.

4. Personal Accident. For the minor stuff like TCM claims, etc.

Generally, you should not have to spend more than 10% of your income on coverage.

You can work with an independent financial advisor who can provide multiple options and explain in detail what you will need to know about the types of insurance as well as the options from various insurers before you come to a decision, especially with respect to cost effectiveness as well as the minor differences between the plans.

You will want to be comfortable to share your fiinancial details with your advisor as that will be important for the advisor to consider your current situation before suggesting suitable solutions.

Hi Anon,

It is great to see that you are looking into getting coverage at a young age.

Firstly, I feel that it is important that you set aside funds for emergencies. You can consider putting them into getting an insurance saving plan with the flexibility to withdraw anytime. An example would be GIGANTIQ - which is one of the popular digital insurance plans we have on our platform.

In terms of coverage, I would recommend you to ensure that you look into getting an integrated shield plan. This would ensure that your medical expenses are well covered should you be hospitalised.

The second one would be coverage for critical illness. Critical illness is something that is increasingly prevalent. In fact, 1 in every 4-5 Singaporeans has a lifetime risk of developing cancer. Having a critical illness plan would help to mitigate the financial loss, in the unfortunate event you are diagnosed with a critical illness.

Depending on your situation, you may or may no require death coverage. If you have dependent or liabilities, You might want to consider getting a term or whole life insurance that payout should something happen to you.

As with all insurance products, this will differ across individuals based on your personal financial situation. I would advise you to speak with a financial advisor before making a decision. You can arrange a free financial portfolio review with PolicyPal.

For your information, PolicyPal has a 10% rebate on commission when you purchase life insurance products with us.