Most Singaporeans recognise insurance as a long-term need for finance planning. However, the confusing nature and perception of the industry has proliferated apprehensiveness of many. There still seems to be a barrier as to how to go about insurance and who exactly to consult. It is no doubt Singaporean millennials and first-time policy purchases would feel the same way.
In Part 1 of the guide, we’ve armed you with exactly what novices should know about life and health insurance. Today’s Part 2 will help you identify to take into consideration before purchasing critical illness and personal accident insurance.
Even if certain pointers don’t apply to you directly at this stage, you should still consider for those in your family or social circle. Hint: Mother’s Day and Father’s Day is coming up real soon!
CRITICAL ILLNESS INSURANCE FOR THE OVERWORKED!
Critical illness insurance is a type of health insurance which offers a lump sum payment if you’re diagnosed with an illness covered under the policy. Some common conditions covered by most typical plans include heart attacks, kidney failures and several major cancers.
WHO SHOULD TAKE UP A CRITICAL ILLNESS INSURANCE PLAN?
1. SOLE BREADWINNERS
In essence, critical illness insurance helps your family pay off extortionate medical bills and live as per normal despite your condition.
Say, you’re the sole breadwinner in a family with 2 young children and you have not set aside any savings. Then you clearly need CI protection! A rule of thumb we covered in InsurBites #1 – If you have loved ones around who depend on you financially and practically, you should purchase protection.
2. SELF-EMPLOYED INDIVIDUALS
We all live in a ‘gig economy’ where there’s an increasing number of people who end up working for themselves. Although such lifestyles can afford to provide one with increased freedom and flexibility, they still have plenty of drawbacks. Whether you’re a business owner or head of your own consulting firm, unforeseen events may surface.
Hence, a comprehensive critical illness cover will help give you a peace of mind for any medical uncertainties ahead.
3. BABY BOOMERS
It is observed that most Singaporean baby boomers are known to be risk-averse and less receptive to retirement and financial planning. Think of your favourite aunt who may still be stuck with more conventional ways of monitoring their savings. In addition, savings advice is generally limited to word-of-mouth recommendations or traditional media outlets.
Simply put, more assistance should be channelled to baby boomers in managing their finances earlier.
4. HEREDITARY DISEASE CARRIERS
Contrary to popular belief, there is an increasing number of insurance policies in the market that help to address the needs of this unique market. (To name a few, autism, down syndrome and cerebral palsy.)
Most are aware that being born with a hereditary disease would result in limited policy coverage and higher premiums. However, having pre-existing conditions does not mean that one cannot benefit from insurance. Consider signing on with an early critical illness plan which usually offers a 100% upfront lump sum payout of your chosen amount for any one of the covered critical illnesses.
PERSONAL ACCIDENT INSURANCE PLANS ARE FOR RISK-TAKERS!
Quite a number of Singaporeans don’t actually read up on or sign up for personal accident insurance but that’s precisely because it’s targeted towards the more risk-taking!
As a type of health insurance, it basically provides one with payouts in the form of reimbursement or a lump-sum, based on the injuries and medical expenses incurred. Basic personal accident insurance plans are often known to have generous claim limits! Review the certain considerations as with your own.
THINGS TO CONSIDER BEFORE GETTING A PERSONAL ACCIDENT PLAN
1. PERSONAL LIFESTYLE
Perhaps you’re an extreme sports enthusiast or a frequent flyer? Some of the more common recreational activities like tennis, canoeing and golf are likely to be covered in PA policies! In addition, consider your current mode of commute especially if you’re a motorcyclist or someone regularly racing on the road. As such, if you’re a driver yourself, your risk of running into an accident is definitely higher than your neighbour who takes the MRT.
2. YOUR WORK
If your current occupation entails high physical risks, then equipping yourself with personal accident insurance is a must. Make sure to check your eligibility for the compulsory Work Injury Compensation Insurance and if you have adequate employer-sponsored insurance.
If you happen to be largely in contact with heavy machinery or equipment, you definitely want to consider getting insured.
3. YOUR DEPENDENTS
Running into an accident that would put you incapable of continuing work is a never a pleasant scenario. A lot of under-insured individuals who run into such situations tend to underestimate and overlook the vulnerability of succumbing to risks. Hence, it’s always wise to continually review and consider signing on early with every change in career or lifestyle.
Look out for our next InsurBites edition so you’ll always be at the forefront in all things financial planning!
Alternatively, contact our growth consultants to find out more about our upcoming masterclasses and programmes. We are committed to creating real change in the community in our in-class sessions, and hope to see you and your teams’ breakthroughs!
Here’s a tip for FAs where you can step in to educate your client, or at least show you are willing to direct them in financial mastery.
Step 1: Right-click to save a copy of the infographic at the bottom of the page; or
Step 2: Copy the URL of the article
Step 3: Forward the copy/link to your close friends and clients! Or even better, share it on your social media to show your circle what you are/have been educating your network with.