Anonymous
What is the absolute minimum I should spend on insurance?
At 24 years old, I am interested in getting insurance policies for the following: health, term life, critical illness, disability, PA.
I am interested in hearing from the community an estimate (in dollars) on how much they spend to obtain full coverage on these insurance. I am interested in the estimate rather than hearing that it should be XX% of your current salary or "it depends on you". At the same time, I would like to find out why (E.g. better hospitalisation wards etc.). Thank you!
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Nigel Tan
15 Jul 2020
Executive Senior Financial Planner at Great Eastern Life
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Pang Zhe Liang
15 Jul 2020
Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)
How much insurance coverage should You have?
As a 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
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Insurance is all about yourself (and your family) so it depends on circumstances. If you are single ...
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There isn't really a minimum, rather a maximum amount you should avoid exceeding.
It's great that you have in mind of what you generally want already based on what you have listed.
Rather than focusing on the premium, you should be focusing on how comprehensive you want your coverage to be.
Which hospital do you want to recover in, public or private?
How much do you need to leave behind for your family?
How much do you need for yourself if you are sick or disabled?
Does your company provide benefits that cover you for injuries?
Work on your desired coverage & sum assured. Then look at what types of policies would be more suitable for your profile. If you are young, go for more coverage if possible as it would be cost savings for your future when you buy more when you are older.