Future you has a request. Read this article and finally see why you should be thinking about getting insurance right now.
Future you has a request. Read this article and finally see why you should be thinking about getting insurance right now.
Is there anything more boring, “unglam” and unromantic than insurance? It’s no wonder that we put off thinking about it until we’re old and boring (and let’s admit it, we don’t think we’ll ever be that boring). But think of insurance like shopping for shoes – you need different styles for different occassions, and you need to decide what’s most important (like comfort vs style) in choosing a pair. So let’s try and make insurance just as easy.
What do I need?
Insurance is designed to support you through various stages in your life or for specific experiences.
For example, travel insurance is a necessary buy but it’s very case-by-case. “Very specific thought processes go into deciding if you need travel insurance,” says Irene Bojoh, Head of IT and Development for GoBear, a comparison site. “You have to wonder, what could go wrong? Your luggage could get lost, you might fall ill, or miss a flight. But do you really need $50,000 in travel insurance? Probably not for a weekend away. But if you’re doing something more adventurous, you might want to look at a plan that covers risky sports.”
In contrast, “health insurance is one of the most important plans everyone should have,” says Louis Ong, Executive Financial Consultant at Prudential Assurance Company Singapore. “It’s good to start with basic coverage, such as premature death, permanent disability, and critical and early stage illnesses.”
One thing Singaporeans have that already helps a lot is Medishield. This covers you for basic health insurance, hospital bills and selected outpatient treatment, but if you need something beyond that, you have to buy it. Most insurance experts agree that you should set aside around 10 to 20 percent of your annual income for it. While it seems like a lot, it’s a matter of thinking ahead. Says Louis, “The premium for life insurance doesn’t change over time, so if you start younger, it will be cheaper, especially in the long run.”
But… why now?
The easiest answer to this is: because, future. You should be as invested in your health as you are in your career. “It’s important to take charge of your future. Your retirement lifestyle depends on financial planning decisions you make today,” says Louis. Sure, you might think retirement is far away, but future you will thank you for having a little foresight. It’s not like things are getting any cheaper. But there are types of insurance that could help you right now. Says Carol Chia, Senior Group Centre Manager, Retail Financial Services, NTUC Income, “Young women can consider plans such as Lady 360, which provides coverage against common female illnesses. It’s a plus if the plan has a regular health screening benefit, as early detection can help one better take charge of their health.”
“It’s important to take charge of your future. Your retirement lifestyle depends on financial planning decisions you make today.”
How much and what should I buy?
Choosing the right insurance can be confusing. Sites like GoBear come in handy here because they simplify things so you can compare policies side by side, and decide from there what’s most important. Another avenue is to talk to a financial consultant who can give you a better understanding of what you need. “From the discussion, you will be able to indentify the personalised coverage you might require,” says Louis.
Back to the future
While thinking about all the options can be frustrating, perhaps the most important thing to remember is that while it’s a life decision, it’s not one you can’t change over time. Yearly reviews and information at your internet-ready fingertips make it easier to see if your plans are suitable for where you are in life. And if it makes things better in the future, why not? So go ahead, you have our permission to shop!
EASY DEFINITIONS FOR 5 TYPES OF INSURANCE HEALTH INSURANCE
While your Medisave might cover you for hospitalisation, to have 100 percent coverage, you need to buy something called a rider. This adds on to your plan and increases as you get older.
LIFE INSURANCE
This covers premature death, critical illness or major disability. The younger (and by extension, the healthier) you are when you buy it, the less you pay, as the premium doesn’t change over time.
AUTO INSURANCE
This is mandatory when buying a car. But it’s worth noting that you’re automatically covered if you drive your parents’ car (and they’ve authorised you to do so). If you own a car and authorise a relative or friend to drive it, they too will be covered under your insurance.
TRAVEL INSURANCE
Highly recommended for those who love travelling (i.e., all of us) but can differ depending on the type of trip. You can buy annual insurance or trip-specific insurance. Most types will cover flight delays, loss of baggage and potential illness.
HOUSING INSURANCE
This covers issues like fire or theft. HDB sells insurance for those buying flats but that only covers the unit. External housing insurance will cover everything you own inside.
Images 123RF.com
