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Anonymous

Asked on 28 Oct 2020

Will be ORD-ing soon, what insurance should I get?

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.

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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:

  1. Hospitalisation plan

  2. 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:

  1. Life

  2. CI accelerator or standalone

  3. ECI accelerator or standalone (This is rather costly. I don't have it and I won't opt for it.)

  4. Personal accident

Insurance that you'd want to consider when you have a salary upon graduation:

  1. Disability income insurance

Insurance that you may want to consider when you hit 30:

  1. CareShield supplement

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".

1

Question Poster

03 Nov 2020

Hi, thanks for your reply. What plans do you think I should look at? Not too particular about private hospital/ward types.
Thank You!
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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..

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Question Poster

03 Nov 2020

Thanks for the inputs. Would you advise to buy now or wait till graduation where I'll start to get an income?
Josh Tay
Josh Tay

03 Nov 2020

IMO, when many people start work, that's when they begin cover for insurance. however things like hospitalisation, i've known a few where their parents are paying for them through their CPF.. But in the case where you are not covered at all, and you have some money in the CPF. do seek some coverage at least till A Wards.
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Healthcare

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.

More Details:

Is MediShield Life enough in Singapore?

Integrated Shield Plan Singapore: A Starter's Guide

Life Insurance

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.

More Details:

What is a Term Insurance Policy?

What is a Participating Whole Life Insurance Policy?

Term vs Whole Life Insurance Singapore

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

More Details:

Understanding Your Personal Cash Flow

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.

2

Question Poster

28 Oct 2020

Can I wait till graduation from Uni or will it be better to get it now? Considering i'm already covered by plans now.
Pang Zhe Liang
Pang Zhe Liang

30 Oct 2020

Well, this is an evaluation that you may wish to make after a detailed analysis. After all, the capability to buy any type of insurance policy is dependent on your health. Thereupon, cost will be another factor (insurance tends to become more expensive as you get older). With this in mind, you may wish to consider the situation from a risk management standpoint.
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