I have been working for 3 years (27 this year). My take home pay is about 3.5k. How much should all my insurance cost? Is 10% of 3.5k a good gauge? - Seedly
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Hospitalisation Insurance (H&S)

Critical Illness (CI)

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Life Insurance


Asked on 30 Jun 2020

I have been working for 3 years (27 this year). My take home pay is about 3.5k. How much should all my insurance cost? Is 10% of 3.5k a good gauge?

I have hospitalisation, critical illness, whole life costing about $350 per month. Thanks!


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Hello anon,

A good guideline would be 10% of your income, gross. Remember that a part of your premiums are paid from medisave (for the hospitalization). If you are under 10%, that's great, but if not, it's still ok. You aren't paying 20% of your pay for coverage, which would be a concern if it was.

However, it's more important that you have the right types of insurance first (and in the right amount). At your age, you would need Critical Illness and Hospitalization at a minimum, with death/TPD coverage if you have dependents such as elderly parents whom you are supporting, or if you have impending liabilities such as a mortgage, or if you are planning to have kids.

Although I can't tell what your coverage is exactly, but you can use some simple rules of thumb to work out what you need.


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Hey there!

10% is a good gauge in general. Of course, how much you pay will depend on how much you need and how much you need depends on your life stage. And that will mean ideally, your coverage should be able to cover your dependents (now and future).

This also applies if you are undergoing a transitionary phase where you are taking on liabilities, eg. mortgage loans, you might want to opt for higher coverage. This is to Ensure your partner will be able to support the obligations in the event of your unfortunate passing.

Do speak to a trusted advisor who can evaluate your coverage needs according to your life stage and Budget!

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


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Level 7. Grand Master
Answered on 02 Jul 2020

Generally, the recommended amount to spend on Insurance products is 10% of your income. However, do note that this does differ for different individuals based on your personal financial commitments.

You can consider uploading your policies on PolicyPal platform. Our free platform helps you to manage different coverage you have and identify potential lapse in coverage.

You can check us out here.


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Level 4. Prodigy
Answered on 01 Jul 2020

It is more of how much you are being covered for, rather than the absolute cost.

CI coverage may be the most important for you if you are still single, without dependants.

Think about how much you would need in the event of CI.

When it happens, people will hope that they have more. But this should not be at the expense of monthly cost (affordability).


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You exceed 10% if you have medical conditions that cause the cost of insurance to go up due to premium loading. If not, 10% is a good amount to cover all your shortfalls.


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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

Death Coverage

There are a couple of factors that we need to clarify and plan before we can establish whether there is a need for death coverage. For example, do you have any dependents? Do you have any liabilities?

More Details:

5 Reasons why You need Life Insurance - Death Coverage

Total & Permanent Disability

Since you are alive and continues to live, there exists a need to be insured.

More Details:

5 Reasons why You need Life Insurance - Total & Permanent Disability Coverage

Critical Illness

Similar to the rationale for Total & Permanent Disability, there exists a need for you to be insured.

More Details:

5 Reasons why You need Life Insurance - Critical Illness

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


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Hi Anon, before looking at premium, look at coverage.

Do you have 10 X Annual Income in the event of death and 5 X Annual Income in the event of Illness, and a Integrated Shield Plan with rider?

As long as you follow these rules and you start early enough plus are not unfortunate to be given premium loading, you will fall within 10% of your income as premiums.


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Question Poster

30 Jun 2020

Thanks Hariz, does your annual income include cpf? i have integrated shield plan with rider but for death and critical illness, it seems inadequate based on what you have shared. Seems like i am paying more for less coverage...
Hariz Arthur Maloy
Hariz Arthur Maloy

01 Jul 2020

I would include CPF because it is still income I would want to protect. This means should I lose employment due to illness, I should still be self contributing CPF.