National Service (NS)
Asked on 28 Oct 2020
Should I buy the MINDEF-AVIVA soon? What else should I get or can I wait till end of university? Have some group plans under parents' employer. Have emergency funds and some investments.
CI accelerator by MINDEF is rather expensive if you want to stay covered up to 65.
If no one is depending on you financially, then it doesn't make sense to have some of the coverages. If you are concerned about your tuition fee loan, then MINDEF's life cover of $100,000 for $4/month seems sufficient.
And while it is true that getting insured early for private life insurance can lower the total premiums, you will need to cough up some cash early to future-proof your coverage. Getting 2 x $200,000 coverage (2 policies) is likely to be more expensive than getting 1 x $400,000 coverage. You will need to do your own math.
As for MINDEF insurance, it's by age so you just need to enter whatever you need to enter before 40 (check the brochure for the eligible entry age range).
Insurance that you'd want to consider regardless of whether you have dependents:
Personal accident (I didn't have it until I started working. This may not too essential if you have a desk job. Can focus on the other coverages first.)
Insurance that you'd want to consider if you have liabilities or dependents:
CI accelerator or standalone
ECI accelerator or standalone (This is rather costly. I don't have it and I won't opt for it.)
Insurance that you'd want to consider when you have a salary upon graduation:
Insurance that you may want to consider when you hit 30:
Term life by MINDEF is cheaper. What I did was I got my life + CI accelerator elsewhere and plan to boost my term life coverage with MINDEF once I have kids. I started getting all my insurance coverages when I started work and "have more things to lose".
03 Nov 2020
Josh Tay, Financial Consultant at Great Eastern Life Assurance
Answered on 02 Nov 2020
From your question I can infer that you will be entering university yeah. Glad to hear you asking this question of insurance.
I personally feel that MINDEF-AVIVA Insurance are add ons to your personal plan. so settle what you can on a personal basis, then top it up with those group plans. It is not as simple as it seems.
IMO, Insurance is required if you have dependents (people who rely on you financially) or liabilities (Housing mortgage etc.).
For people who have no dependents or liabilites and want to leave something behind for your loved ones (Parents) or to charities etc, it would be considered above and beyond. Good to have but not essential.
My only recommendation is to get the highest hospitalization cover & personal accident plans. As you are young and might lead an active lifestyle, PA plans will be handy to make outpatient medical claims in the event of an accident.
Hospitalization is to lock in your current good health, so that at minimum you have access to the best doctors all the time through out your life as long as your keep the policy in force. no matter whatever illness behalfs on you, you know you have access to the best doctors and at least 95% of your medical bills are covered.
If you feel you can stretch abit more in budget. go on to maybe a 30 year term plan.. affordable and most term plans now are convertible to other life insurance plans in the future without proof of health.
health is a gift, and having no medical issues etc is such a blessing..
3 more comments
03 Nov 2020
03 Nov 2020
As a start, the first priority should always be healthcare. The reason is simple - medical inflation hits 10% in 2019. Consequently, a single medical treatment could potentially wipe out all your savings. Therefore, it is always good to know the healthcare insurance policies available in the market and to evaluate whether you should enhance your coverage.
After we have set up the basic foundation, the next step will be your life coverage. This is because you are the biggest asset that you own. Therefore, greater emphasis should be placed on protecting your wealth (before we grow it further).
Generally, most insurance policies in Singapore will cover for pre-mature Death, and Total & Permanent Disability. While optional, one of the crucial coverage to have will be (early) Critical Illness.
There are many options available in the market, thus take your time to learn more about it. Alternatively, speak with your insurance agent or choose an experienced consultant who is capable of guiding you through the process.
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
Having mentioned that, this is a general guideline that may or may not work for you. The best way is always to have an in-depth understanding on your cashflow, current situation and future goals. It is only when we know you well enough, then it is appropriate to give you the best advice or suggestion that fits into your needs.
I share quality content on estate planning and financial planning here.
28 Oct 2020
30 Oct 2020