Asked on 03 Jun 2018
I would recommend that you purchase an Integrated Shield Plan first. This is because regardless of which stage of life you are in, the additional coverage upgrade to Medishield life will be extremely helpful. What this upgrade does in a nutshell is that you pay a small sum every year out of cash and Medisave dont think too much about the latter for now to ensure that you can get the range of treatment that is most suitable for you. Common upgrade benefits include longer post hospitalization, higher medical limits, TCM [if you're into that[, etc.
The rest of the plans, as much as I'd love to recommend them to you, are situational and potentially irrelevant. Typically I would advocate purchasing either insurance that provides for in incidence of Death or Critical Illness, with a ratio to your current salary. However, I do not know many things about you as well as your future plans: for example -
How long will you be working for?: In my experience people who work out of ORD who didn't sign on are either saving up for university or have other plans for saving the money, or they may not opt to stay at that job for a long-term period. You may also be putting aside larger sums for your parents or financial emergencies.
This is not to chatize you or make baseless assumptions. But a life insurance plan aside from the largely affordable medical and personal accident plans are intended for a lifelong commitment, even the Term Plans. I cannot make brash recommendations according to my conscience because you may end up in a situation where you take my advice or someone else's here, and then be unable to afford premiums later. So I really advise that you figure that out first.
In the meantime, there are some articles on Seedly that may give you a bit more clarity.
Prior to meeting your agent, some ideas can be found here.
Preferably, that agent is me. Just saying.
Best of luck.
It is difficult for a young person like yourself who is just starting to enter into the working world to answer some questions which we financial consultants tend to ask. Questions like, what are your financial goals? Your dreams? Where do you see yourself in the future?
Having gone through the stage in life which you are going through now, I know you probably wished you knew the answers yourself. But the fact is, you don't know where life is going to take you, and hence your answer will likely be the "best case scenario" - and we consultants sometimes will unfortunately take your answers at face value and make recommendations which, at the time made perfect sense. However life throws lemons at you and you have no choice later on but to make lemondaes with the policies/plans by terminating them.
Start by asking yourself WHY you are doing what you are doing now - why are you working full time now? Is it to help support the family or to save up money so you can future your education? Why do you want to future your education and why did you decide on this degree? Asking yourself WHY will help you to understand how your choices came to be and it will inform you WHAT future choices will be open to you. When you do this, suddenly the fog clears and you have a road map for life which you never thought existed. Now, you are ready to talk about financial planning (insurance, investing for retirement etc.) because you can't plan no goal in mind
Financial Planning is like Google Maps - it can only show you the best route if you know where you are going!
This is my personal story: I used to be a cabin crew with SQ earning abot 4K a month. I just graduated from SMU with a degree in accountancy and I sure as hell didn't want to be an accountant. I went for the SQ interview with zero expectations and eventually I passed the interviews and enjoyed a career which paid very well compared to my peers. In my time as a crew, I never bought insurance and I didn't even know what insurance I had. I knew it is important to be insured, but KNOWING and actually BELIEVING are two very different things.
Fast forward two years later, I joined the industry to increase my income potential because both my parents are barely insured themselves and I cannot afford to take care of them with just a 4k salary (cabin crew salaries stagnate) in the future. So the WHY that drove me was my parent's health in the future - with this I know what I must do to put this WHY to rest. As of now, I have 2 million in death coverage and TPD, 500K in CI and some others - and it doesnt bother me one bit how much i set aside to pay the premiums and I spend less on other things to make sure I always pay the premiums. By understanding the WHY behind my life choices, I found out what insurance is important for me and I will never have second thoughts if I'm spending too much.
So my advice as a financial consultant is, let's not talk about WHAT insurance you should get. Let's talk about WHY you are working full-time?
06 Jun 2018
1. Hospitalisation plan , Integrated Shield Plan for your self coverage
Protect your own income first before you think of your dependents. If you can't even protect your own wealth, how are you going to protect your loved ones?
Compare between all the hospitalisation plans here:
2. For life insurance coverage if you have dependents:
MINDEF/MHA Group Term Life since you're a guy.
Arguably the cheapest Term Life Insurance availalble in the market right now.
3. Critical Illness Insurance to protect your income in the event of critical illness
Stand alone plans are better because it is not being tied to your term life insurance in the form of a rider. In the event that you cancel away your term life insurance, these plans are still actively protecting your income.
Compare between the best critical illness insurance here:
Lastly, congratulations on your ORD and wishing you the best in your career.
I will suggest getting insurance plans in this order
1) Shield Plan
2) Income Disability Plan
3) Critical illness plan (Term or Limited Whole Life)
Optional: Personal Accident plans if you lead an active lifestyle
Death insurance is not as important now as your priority is to protect your income against illness, unless you are already looking towards setting up a family and may incur liabilities or planning to have children.
Invest the rest of your money in a ETF or lost cost unit trust until you gain enough knowledge and experience to dabble into stocks and shares.
You could get a term or whole life insurance that covers death, total permanent disability, critical illness and enhanced critical illness. You could also get a medical insurance (integrated shield). It is best to seek advice from different financial advisors in order to make a more informed decision.
Integrated Shield Plan and then wait. Ignore everything until you understand what else you need. If you have bought the MINDEF group term life plan, its a good idea to keep it for life insuarance portion. Its really cheap.
First things first- get your medical coverage in place.
next, have yourself coverage with term plans first. Eg $500K coverage.
Dont overstretched yourself financially and do a review 6 months after gainful employmenT.
Luke has done a great job summarising your situation.
As a fellow financial advisor, I would recommend that you also take up the following in priority of importance:
1) Health Insurance to cover hospitalisation
2) Life Insurance (Death, TPD, CI)
3) Personal Accident Plans
4) Disability Income
For now, if you have a limited budget, do take up health insurance as soon as you can. As for life insurance, you may focus on CI since you would have been covered for at least 100k through the SAF Group Term Insurance (if you haven't cancelled)
In addition, do also spend some time and money investing in yourself to gain more knowledge in personal finance to grow your wealth(: