Should I begin buying stocks and earn dividends first or should I consider buying an insurance plan first?

Hi Anon,

I think the first priority is protecting yourself first, so definitely insurance should be the first thing you look at

Personal thoughts on the priority of insurance is;

1) Hospitalisation + Rider

2) Personal Accident

Once you have those 2, then we can look into

3) Whole Life or Term

Why Whole Life and Term is crucial is because these policies look into CI, where statistically 1 in 3 Singaporeans has a likelihood of getting CI in their life-time.

Once you have these, then definitely look into retirement planning, this can come in the form of investments and even wealth accumulation plans, where the returns are more stable if we are personally not comfortable with taking risk

Actually, I'd say it depends on your age and your life stage. If you are a fresh graduate and don't have a family to support, you really only need hospitalisation plan. If you're worried about having to pay for massive bills due to critical illness, then you cover for critical illness. Don't fall into the trap of becoming overinsured. You can also consider getting term insurance and investing the rest of your money (as a lot of advisers will ask you to get whole life, and it'll look as though you're getting 'free insurance' as you get back some money at the end of xx period, but you lose out in terms of opportunity cost). If you have parents or kids/spouse depending on your income, then yes, make sure you have some insurance first, just don't fall into the trap of becoming overinsured please.

Hi anon, I would definitely say get adequate insurance cover first. If we were to invest without having enough insurance protection, we could be forced to liquidate our investments prematurely to pay for any hospital bills, etc, if the need arises. 

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We just published an article on Seedly on what to do before investing (insurance coverage is one of them) and it can be found at https://blog.seedly.sg/checklist-to-do-before-i.... Hope it's useful for you!

Definitely protect yourself first and once you have that safety net, you can then look into investing.

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Get a hospitalisation plan, and if you have dependents (parents, spouse or children who will be affected should something happen to you) look into a term plan with critical illness coverage so it will not affect you and your family's financial position significantly should anything untoward happen to you.

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Find an insurance agent who is trustworthy and will calculate the right amount of coverage you need (not what you can afford) without overstretching yourself. You should spend no more than 10% of your salary on insurance each month.

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Finally, if you are going to learn about investments on your own, don't mix insurance with investments as investment linked policies have a lot of hidden charges.

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All the best!