Whole Life Insurance
Term Life Insurance
Asked by Anonymous
Asked on 08 May 2019
Which critical illness plan should i get? What should i look out for in a critical illness policy? Advice on endowment policy too. Kindly assist. Worked for a year and wanna get insurance plans.
Top Contributor (Sep)
Hey Anon, awesome stuff looking to get yourself covered so soon after working. :)
The first 2 things to consider are, how much coverage should you have and for how long.
The rule of thumb is to get 5 X your annual income as income protection in the event of Critical Illness. So if you're making 50k a year, you should get covered for 250k in the event of CI.
Next is for how long. My recommendation would be to have CI cover for life.
There's a big chance that we'll get sick before we die. During this time we'll need income for treatment and recovery.
We'll either get money from insurance or draw from our assets, which may or may not be enough at that time.
Now, there are a few more things to consider. Here's where it gets a little more in depth.
There are early stage, late stage, and multiple claims policies.
Today, medical technology allows us to detect illnesses early, treat us early, and allows us to recover from illnesses that used to kill us almost always.
We'll survive more often but that means that these illnesses may haunt us again later in life.
So a comprehensive plan will have elements of all of the above benefits.
Now, all insurers will have their versions of CI plans. If you'd like a comparison of the best policies available, you may want to speak to an Independent Financial Advisor rep like myself.
I distribute for 7+ insurers and can give you a good look at all of them. But before that you may want to also read this https://www.businesstimes.com.sg/opinion/navigating-critical-illness-plans?amp.
Drop me a message if you'd like to get a closer look. :) all the best.
I am an Advisor with Manulife, but due to MAS regulations, we arent allowed to provide any recommendations online without having a full understanding of your profile.
However, I can break down the basics for you via this comment.
Firstly, we should first understand how much coverage we require for both Early CI and Late CI. Typically, we would suggest a coverage of about 5x of your annual income for coverage. For Early stage, typically about 1 - 2 x of your annual income.
Secondly, what are the options available. There are typicall 3 options for you to take up. Whole Life Plan with ECI & CI rider, Term Plan with CI Rider, Multi-claim CI plans which is a term plan that only covers CI but allows for one to claim multiple times.
Thirdly, What is your overall budget? My suggestion is that you should NOT spend more than 10% of your income on all your insurance including your health insurance and Personal accident insurance if any.
Things to look out for:
1) No of conditions that are covered. For Manulife, we cover a total of 106 conditions, which is one of the more comprehensive CI plans in the market
2) Fine print on the definition of the conditions
3) For Multi-Claim CI, it would be good to take a look at the structure from the various insurers. Some insurers provide 0 waiting period for their ECI claims but do not allow you to claim from the same category of CI again, whereas some may have a waiting period of 1 year for multiple claims but yet do not restrict you in the category of CIs.
In conclusion for Critical Illness plans, you may either get a combination of Whole Life and Term, or a Multi-claim CI plan depending on your budget and preference!
As for endowment policies, there are typically 2 types, those with flexibility and those without. More often than not, the endowment plans with flexibility tend to generate lower returns as compared to those without flexibility.
More importantly, before deciding on an endowment plan, do understand your current risk profile and your savings/investment objective. There are plenty of options for you to grow your money. You should definitely speak to a financial advisor to find out more!
Lastly, feel free to connect with me via my email at [email protected] if you would like to have a further (non-obligatory) discussion on your personal financial planning.
Hello, just providing some suggestions here in addition to what the rest have written.
For your critical illnesses, 1) do you want to stay covered even after one claim? 2) would you prefer to pay as you cover or pay premiums during your working years and stay covered after retirement?
For your savings needs, 1) are you a disciplined saver? 2) how much of a risk taker are you in savings and investments. Are you comfortable with having short term losses in your capital to exchange long term gains? 3) targets! How much you want to accumulate by when? Having no target is also ok, but you need to be aware that you have no target.
We can discuss more if you feel that these questions help!