What are some insurance plans I should buy for myself at age 56 and for my child who's 20 years old? - Seedly

Insurance

Asked by Anonymous

Asked 3w ago

What are some insurance plans I should buy for myself at age 56 and for my child who's 20 years old?

I am currently 56 and I only have NTUC Incomeshield Plan A.

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Alan Kor
Alan Kor
Top Contributor

Top Contributor (Jan)

Level 5. Genius
Updated 1w ago

1) Term insurance covering death, TPD and CI as your child could still be your dependent till he/she starts working 2) Your child should have a hosp plan

Bear in the mind the premium costs as I see the agent's recommendations are very expensive in total. Good for his commissions though haha

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Thelobang Thelobang
Thelobang Thelobang

2w ago

XianSheng - i agree with Alan. At your age, spend less and get more cover for you and your son. Sorry to nag - use the MINDEF group insurance - for example, possible to get $1 million of coverage for only $312 a year (= $26 a month). See https://thelobang.com/index.php/2019/08/27/insurance-basics/
Loh Tat Tian
Loh Tat Tian

1w ago

@Thelobang Thelobang Have you calculated the TVM and the escalating cost for mindef Aviva living care? The death coverage does not increase until past 65 though (so i am not worried). Your example needs more substance.

Hi there!

There are 2 areas that you may want to consider:

  • Unexpected additional costs incurred due to Healthcare in your retirement years and outliving your assets.

For the first one, a hospitalization plan like the one you have is fantastic and you should keep it. Consider downgrading to the A-Ward plan to save some costs.

  • Next would be Long Term Care insurance. We have ElderShield and supplement plans. I'd recommend getting a 2k/mth benefit as that would be the cost for a nursing home or to have another set of hands at home to take care of you.

  • Lastly, would be a lifetime annuity in case you outlive your assets. An annuity would pay you a sum of money for life. You'd be familiar with CPF Life, you can get a private annuity to have another stream of income to tap on.

  • Lastly and this is optional, would be a life insurance policy for the means of leaving a legacy for your child and grandchildren.

For your 20 Yr old, he should be getting income protection insurance in the event of Illness. This would be a Critical Illness plan and possibly a disability income plan.

Of course a hospitalization plan as well.

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Xiansheng Yang
Xiansheng Yang

3w ago

Also, my child currently has Enhanced IncomeShield Advantage which is a hospitalization plan, correct? So would be good to have a Critical Illness Plan and a Disability Plan? If yes, any recommendations?
Hariz Arthur Maloy
Hariz Arthur Maloy

3w ago

Hi XianSheng, thank you for your comment, do you mind dropping me an email - [email protected] Let's discuss there. :)

Similar thoughts as Hariz!

For yourself, it's great that you have a hospitalisation plan.

You may consider an upgrade of your existing Eldershield policy to insure against long term care cost that may happen in the future.

As you are also nearing retirement, it would be good for you to do a 'stocktake' of your personal wealth and assets to ensure that you have enough for your retirement years! Do look into your potential future cash flow from CPF Life and other investments/savings that you currently have!

Also, you can consider getting some coverage on Death TPD and CI since your child is still depending on you till your child joins the workforce!

If you would like to have a chat, feel free to connect with me at: https://brandanchen.manulife.sg/

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  1. Upgrade your Eldershield to ensure that disability care coverage is adequate.

  2. Do you still have any major liabilities? If so, I believe you might want to look into a term coverage that covers death/TPD/TI to ensure that your liabilities are being covered. Advice for term coverage to save on premium in consideration of your age.

  3. Early CI coverage

  4. Your child should start with hospitalization insurance, life insurance coverage for death/total and permanent disability/ terminal illness/early critical illness.

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Xiansheng Yang
Xiansheng Yang

3w ago

Thank You!

To be honest with you.

There is not much runway for you to buy CI protection due to the premiums required to fund it. It likely should be in the range of 7%-10% of premiums paid. Hence, if you really want some coverage, the best is to self-insure in this case. However, there is a possibility to get CI coverage for up to 5 years just for you to prepare a bit of emergency funds for self-insurance for CI. (or you may not even be able to buy CI protection).

Your current runway is to get the elder type of insurance for yourself, depending on your finances.

For your child at 20 years old, it depends on whether you want consistent returns of 3.5% to 4% on a whole life policy (which also has a higher premium), or buy term and invest the rest, which you can easily beat if you invest more aggressively for your child. But I would urge you to get private insurance (be it a term or whole life) first since the premium compared to Mindef Aviva is very similar, and having a private insurance locks in the premium as compared to some possible change to premiums.

Also, the guaranteed insurability option allows your child to upgrade with no underwriting required should there be insurability issues that developed later.

Mindef Aviva Term death should be a top-up requirement compare to a private when your child reached 27 years old and above.

The list of insurance to consider is the same as you by right for a single,

Hospitalisation protection first covers medical bills

CI protection - covers 5 years annual income for your child

Death (after he starts working and maybe giving you some income)

Accident/disability income (depends on what kind of job etc).

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Thelobang Thelobang
Thelobang Thelobang

()

Level 2. Rookie
Updated 3w ago

Minimise cashflow stress - looks like it is possible to get $1 million of coverage for only $312 a year (= $26 a month). See https://thelobang.com/index.php/2019/08/27/insurance-basics/

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Jacqueline Yan
Jacqueline Yan

3w ago

Hi there! I'm Jacqueline from the Seedly Team. :) Thank you for sharing the above article on insurance basics! It'll be great if you could elaborate and share more in your answers too as it'd help the other users gather information faster. Thank you!
Thelobang Thelobang
Thelobang Thelobang

3w ago

Thanks Jacqueline. "minimise cashflow stress" = spend as little as possible of your monthly take home salary on insurance and yet get a high level of basic protection, before considering to spend on more complex type of insurance coverage. This link contains examples of insurers and plans which can provide basic insurance protection https://thelobang.com/index.php/2019/08/27/insurance-basics/