Asked on 08 Sep 2019
Currently in my first job and new into insurance. I'm not sure if I've made the right decision to buy this insurance or I should have bought other type of insurance. As for hospital insurance, it was under my father’s account so im planning to change the ownership and upgrade from there. Please advise, thank you!
Hi, a personal accident plan is good for a start, but you will also need to consider other forms of insurance, amongst them:
Critical Illness: To protect your income and provide a sum of money should you be unable to work due to critical illness
Death coverage: If you don't have dependents or liabilities, then not strictly necessary.
Hospitalization: For hospital bills and pre/post-hospitalization expenses.
The coverage amount will be dependent on your individual needs.
These 3 insurances form the core of your protection needs at this stage in life and should be obtained soon. After these are settled, you may look at other forms such as PA or disability income if you desire. So while you did not make a 'wrong' move buying PA insurance, you should instead focus on the 3 insurances I mentioned first before moving on to other forms of coverage.
I'd suggest talking to an independent advisor in order to understand the options available for the 3 categories mentioned above, and also to be able to understand what the market offers and which plans are the most value for money. I am from an IFA myself and would be able to offer you assistance if you do not know of anyone to ask, so just reach out to me if you need help.
10 Sep 2019
PA covers accidental death and TPD. The payout based on an accident is usually capped around 5k, and is subjected to a deductible of $50 and upwards. Personally, I do not feel PA plans are necessary unless you work in a high risk environment or have an active lifestyle. That being said, the best "value for money" PA plan on the market would be Sompo's PA Star. They usually have 20% off their PA plans, in the first quarter of the year.
I go the other way round. What makes you think that accident plan is the most important in this case? What kind of concerns do you have? Are you working as an electrical engineer that deals with high tension power?
OR you are in teaching, that could cause you to lose your voice?
Most people would focus on 2 aspects as a single person
1) Hospitalisation - A must for coping with the high medical cost. Low chance for catastrophic surgery required, but if it hits, its gonna be painful. Also, the kind of medical wards you want will determine how high the pain will be (at least financially too).
2) Critical illness - This is in the event that you require sabbatical and unable to work due to prolonged treatment of a Critical illness. Some people go for ECI protection (but the premiums are imho really a bit high), so the risk of claim and self-insurance is a debate for myself.
3) Death plan - This is more for dependents and hence requires some hard calculations on the coverage. But the soft guideline is just 10 years of annual income, to allow them to adjust their life, while also reduce the stress on your insurance payment. You should progressively reduce the coverage on your term if you have to keep it affordable. Do not need this if your parents are not dependent on you for income, and you do not have any children.
4) Accident covers outpatients more (because hospitalisation covers the major 1s). So it's a good coverage to reduce the emergency funds you require, but definitely not the most important 1.
10 Sep 2019
Keep it simple, step by step. Don't overcommit and stress your cash flow, build up your basic protection first such as term life, personal accident and hospitalisation (=Medishield related). For example, get $1 million of basic coverage for only $312 a year (= $26 a month). Read more at https://thelobang.com/index.php/2019/08/27/insurance-basics/
10 Sep 2019