Still Uninsured? Get The Coverage That Suits Your Lifestyle Today
Planning for your insurance needs can be frustrating. There are a ton of different insurance products out there, each laden with complex jargon. It’s enough to put someone off signing up for an insurance plan altogether.
Not to worry, we’ve summarised the key types of insurance you may need to consider at different life stages:
In your 20s
Getting insurance probably isn’t the first thing on your to-do list upon stepping into the working world. You may be occupied with other financial obligations – such as your education loan – or otherwise be more interested in other aspects of personal finance, such as investing. However, don’t overlook getting proper insurance coverage.
For starters, get yourself a health insurance policy:
Health insurance: While Medisave and Medishield Life may help with some of your surgery or hospitalisation costs, they’re subject to certain withdrawal limits – this means that they may not be sufficient to cover the costs of crippling illnesses like cancer. As such, you’ll want to consider an integrated shield plan, which is an insurance plan that provides additional benefits on top of what Medishield Life already offers. Getting adequate health insurance could mean the difference between being able to afford your treatment costs and being crippled with medical debt.
In your 30s and 40s
If you’re a newlywed or have a young family, you may have several dependents relying on you for income. You’ll not only need to look after your own well-being but will now have to consider that of your family members as well.
At this juncture in your life, you may want to consider the following coverage options:
Life insurance (term or whole life): Having life insurance can help ensure that your spouse and children are financially taken care of should anything happen to you. With a life insurance policy, your family receives a lump sum upon your death, which could help to:
- Support a stay-at-home spouse who relies on your income, or provide a financial buffer for your spouse to handle day-to-day expenses
- Pay for present and future childcare expenses, including education
Two common types of life insurance are term insurance and whole life insurance. They have a few key differences:
|Term insurance||Whole life insurance|
|Coverage duration||For a specified term||For life|
Critical illness insurance: Unlike an integrated shield plan – under which you can only claim for hospitalisation or treatment fees – this insurance policy provides a lump sum if you are diagnosed with one of the critical illnesses it covers. You can use this lump sum at your own discretion, which means that you can use it to cover a temporary loss of income or non-medical costs.
Disability income insurance: In the event of permanent disability, you’ll be provided with a monthly payout. This can help you partially replace any loss of income, as well as support expenses that may be incurred by your disability.
Mortgage insurance: A mortgage insurance policy helps you or your family continue servicing your home loan repayments should anything happen to you (i.e. death or permanent disability). However, do note that if you are using your CPF savings to service your monthly instalments on your HDB flat, you may already be enrolled in the Home Protection Scheme (HPS), which is another form of mortgage insurance.
In your 50s and beyond
At this stage, your children may be relying less on you financially. This means that when it comes to insurance planning, you should start prioritising your own healthcare needs.
Elderly healthcare in Singapore is not cheap; by 2030, each senior citizen may need an average of S$51,000 a year in healthcare spending. Other than making sure that your existing health insurance is adequate for your mounting healthcare costs, you should also consider long-term care insurance to mitigate some of the financial burden of senior healthcare:
Long-term care insurance: More than one in five elderly Singaporeans are estimated to receive long-term care, which can be a drain on your finances: a trained home caregiver could cost around S$750 a month, while a nursing home could charge thousands a month. Your ElderShield coverage may not be sufficient to cover these costs, as ElderShield 400 only provides monthly payments of S$400 for up to 72 months. As such, you should consider long-term care insurance, which provides a fixed monthly payout for long-term nursing treatment if you are unable to perform day-to-day activities like bathing or dressing.
Your insurance needs are personal, know what you need
Of course, there are other types of insurance policies that you may want to consider, depending on your life circumstances:
|Type of insurance||What is it?|
|Investment-linked insurance policy||A form of life insurance, whereby your premiums are used to invest in unit trust funds. Your return on investment depends on how well the unit trust funds perform.|
|Hospital care insurance||Provides a daily payout if you are hospitalised.|
|Fire insurance and home insurance||Pays for repairs or replacement if your home or the contents of your home are damaged or stolen in the event of fire, flood, burglary or other insured perils.|
|Maid insurance||Covers hospital and surgical expenses, as well as provide personal accident coverage. If you employ a foreign maid in Singapore, getting insurance for your domestic helper is compulsory.|
|Car insurance||Pays for repairs if your car is damaged.|
|Travel insurance||Pays for repairs or replacement if your belongings are lost or damaged, medical costs while overseas and reimburses you if your trip is cancelled. Your credit card may already offer you free travel insurance.|
|Pet insurance||Pays for veterinarian fees, and may also pay out a lump sum in the event of theft or death of your pet.|
Keep in mind that while the overview above can serve as a rough guide for the types of policies you may need to consider at a certain age, your actual insurance needs will depend on your life circumstances.
Before you take out an insurance policy, it’s best to take stock of what your needs are and consider the dependents who rely on you as a source of income.