SG Budget Babe
Asked on 05 Jan 2020
Single, with 1 elderly dependent. What is the most important insurance that I should be getting?
Most important would be hospitalization to deal with large medical or healthcare bills. Next would be term insurance to cover the loss of income since you have en elderly dependent. These 2 should be the most basic to cover most of your needs.
Lots of ideas there, and I recommend that you speak with several advisors whom you can trust to get their suggestions before you make your decision.
Note though that you shouldn't focus on trying to trim down to the basic, but focused on covering the needs that you can't afford to pay for.
Not an insurance agent. But here is what I feel a person with your profile should be getting.
1) Hospitalization plan - this one most basic for sure
2) Term life (TPD/CI) - the payout should sustain you and your dependent should anything happen to you, and amt can be reduced after dependent passed away
3) PA plan - cause it's cheap and offers high payout if involved in accident - plan it tgt with the term life? If can't afford term life even.. then at least get this one. But this doesn't offer CI coverage.
Since asking for most basic.. wouldn't recommend WL.. specifically if you are of a certain age.. then it will be very expensive and will not be worth it. Have term life cover for the economic years. Depending on your life philosophy.. you may take death as it comes.. so instead of WL, learn to invest the money and plan for retirement so that should you get a CI or something after retirement, there is money to sustain your life - with medical expenses generally covered by hospitalization plan (so don't scrap this one) and you have no further dependants.
Not sure if you have housing mortgage but ensure you have it covered in your insurance planning / HPS. Make sure CPF nomination and LPA is done as well. If you have trusted siblings, relatives, cousins and friends.. let them Know how to help with insurance claims and with your elderly dependant should the unfortunate happen.
Last but not least.. if you intend to stay single... Pls plan for own retirement (CPF/ investment/annuity) and mortality if haven't.
Top priority would be hospitalisation insurance due to the rising costs of healthcare in Singapore. Next would be a personal accident plan, personally I think these 2 plans are of great importance, and every individual should look into getting these 2 kind of policies once they have a stable income.
Once those 2 are done, look into a whole life/ term insurance which looks into coverage for death, total permanent disability (TPD), critical illness (CI) & early critial illness (ECI). For your case as you have an elderly dependent, I would recommend looking into a whole life insurance as the coverage is for the whole of life and you have a limited pay option, meaning you don't have to pay throughout your life for the coverage
First priority is always healthcare. The reason is simple - medical inflation hits 10% in 2019. Accordingly, a single medical treatment could potentially wipe out all your savings. To do this, it is always valued to have your own private integrated shield plan. Here is why: https://www.blog.pzl.sg/is-integrated-shield-plan-necessary-in-singapore/
After you have the basic foundation set up, you may consider a basic life insurance plan that covers for death, total & permanent disability, and most importantly for critical illness.
There are many options available in the market, therefore, take your time to understand which suits your needs. Here is a general comparison between a term and whole life insurance to help you with some basic understanding: https://www.blog.pzl.sg/term-vs-whole-life-insurance-singapore
Once you have a stable income, here is the 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
Having mentioned that, this is a general guideline that may or may not work for you. The best way is always to have an in-depth understanding on your cashflow, current situation and future goals. It is only when we know you well enough, then it is appropriate to give you the best advice or suggestion that fits into your needs.
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Death coverage for the estimated term of your elderly dependent's life. Coverage to be amount required to support your dependent throughout.
Critical Illness cover for yourself for the rest of your life. Get 5 X your annual income as coverage.
That's about the most basic.
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