I am currently paying 40% of my annual income for CI, life, H&S and saving policies. Am I paying too much? - Seedly
Seedly logo
Seedly logo
 

Insurance

Critical Illness (CI)

Life Insurance

Hospitalisation Insurance (H&S)

Savings

Anonymous

Asked 2w ago

I am currently paying 40% of my annual income for CI, life, H&S and saving policies. Am I paying too much?

0 comments

5 answers

Answer Now

Answers (5)

Sort By

Hey there!

Might be a tad too much. In general, it also depends on your allocation for insurance and savings. I'll recommend normally 10% for insurance and 10% for savings plans depending on your needs and life stage since cash flow might be important for your short term needs. You might want to consider making your money work harder for you by opting investment options.

Financial planning is an integral part of life. You can reach me here to find out more.

0 comments

👍 3

Not enough information to ascertain whether you are paying too much for your portfolio.

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

For savings and investment, the general guideline will be about 20% to 30% of your annual income.

Now that we have the general guideline, we need to have a further breakdown on your portfolio.

For example, if you are spending 10% on healthcare and life insurance, and 30% on savings, then we need to determine whether you are saving too much money.

On the other hand, if you are spending 30% on healthcare and life insurance, but only has $50k coverage for death, then you may be overpaying for your portfolio.

In summary, we need more information on the breakdown in order to give you responsible advice on whether you are paying too much.

I share quality content on estate planning and financial planning here.

0 comments

👍 0

Hi Anon, do split between policies meant for protection and for savings.

If your premium for protection is about 10%, that's fine. At max 15% if you started late or have health issues that result in premium loading.

If you're saving 30% that's fine as well. In fact the more you save the better.

0 comments

👍 0

That is significant and would impede your cashflow plans going forward. Unless you have a medical condition, such premium outflow would affect your liquidity plans going forward.

0 comments

👍 0
Tay WenHao
Tay WenHao
Top Contributor

Top Contributor (Jun)

Level 7. Grand Master
Answered 2w ago

Yes its seems abit too much. But need more detailed values. Your annual income and age.

E.g. If your income per month is 2k, annual 24k, 40% is $9.6k. And its considered high if you are young. Most likely due to your savings plan.

For myself, my annual insurance cost for CI, ECI, Term Life, TPD, Personal Accident is less than 2k.

0 comments

👍 0