How to Determine The Insurance Coverage and Policies You Need

insurance coverage

While insurance is a must-have in Singapore, the right coverage for you falls back on your lifestyle and needs.

Navigating the world of insurance coverage is more than checking boxes on your adulting to-do list. You need to find the coverage that works best for you, yet figuring out your insurance needs may seem like a complex process. 

To get the ideal fit, you first need to understand each insurance offering and its narrative, which will then help you decide the coverage sum you need.

In this article, you will learn about the four common insurance policy types and how to determine the best coverage for yourself.


Related Story: Building Financial Independence: Retirement Planning in Your 20s and 30s


Understanding plan types and their roles 

The table below gives you an overview of the four major insurance types and their coverage.

Insurance Type


Life Insurance

Provides financial coverage (for yourself or your dependants)

Medical Insurance

Covers medical treatment and hospital bill costs

Critical Illness Insurance

In case of a serious illness, you get a payout (usually a lump sum)

Personal Accident Insurance

In case of accidental death or total permanent disability (due to an accident), you get a payout

Each insurance type has a unique function and can fall under either: (1) a want or (2) a need, depending on the insurance coverage you require.


Insurance coverages you need: Medical insurance and life insurance

Obtaining coverage for these two insurance types is deemed essential. Medical insurance covers your health (usually medical bills), while life insurance ensures that you and/or your dependants are financially covered.

Medical Insurance

As a Singaporean, you’re covered for basic healthcare and medical insurance in public Class B2 and Class C wards via MediShield Life. If you’re considering treatment in a private hospital or better ward class, you may need to pay for it yourself or consider purchasing an Integrated Shield Plan (IP), which works in collaboration with private insurance companies.


Why opt for IP when you already have MediShield Life?

MediShield Life is a government-based healthcare plan, which aims to cover your basic medical insurance needs. An IP can give you more extensive coverage with other options that can be useful in the long run.


What’s the right amount of medical insurance coverage?

The benefits offered for medical insurance vary by providers, but these comparison tables by ward types from the Ministry of Health can come in handy. When picking the right IP plan, consider the rising premium to age costs and if the ward class you’re opting for is something you can maintain in the long term.


Related Story: How to Find the Best Health Insurance


Life Insurance

This is the most basic insurance plan, paying out a sum assured to nominees upon the death or total and permanent disability of an insured person. Life insurance—which comes in the form of —term, whole life, and endowment—is absolutely essential. 

Here’s an example—if you purchase a life insurance policy of S$1 million in value, your estate receives that sum should you pass on or suffer from total and permanent disability. It helps them by providing funds for financial security, income replacement, debt settlement, education expenses, estate planning, and even business continuity.

Given the high living costs in Singapore, life insurance is a must-have. For instance, if an accident renders the surviving parent the sole breadwinner, it can leave a gap in an otherwise double-income home. In such circumstances, life insurance can offer some relief in terms of coverage for the rest of the family.


What’s the right amount of life insurance coverage? 

Your goal is to provide financial support to your dependents. This may include your children (until they turn 21 years old at the very least), your spouse the elders in your home (until they pass on). 

Let’s take the example of raising two kids aged 5 and 7 years respectively, with an estimated annual cost of raising a kid at S$10,000 per annum.

Child age

5 years old

7 years old

Cost per annum



Cost until adulthood 

(21 years)



Total Overall Cost


Life insurance premiums increase with age, making it costlier to pay for coverage at a later stage. Consider either of these options to avoid this from happening:

  1. Decrease your coverage sum to match a premium sum you can afford, or
  2. Purchase term life insurance, which offers coverage at a lower cost. However, there are no accumulated cash values for term-life policies.

Three life insurance plans worth checking out are DPI term life/ePROTECT term life and DPI Whole Life by TIQ and FWD’s Term Life Plus.


Related Story: How Much Does it Cost for Millennial Families to Raise a Child?


Nice-to-have insurance coverages: Personal accident insurance and critical illness insurance

These two insurance types fall under the category of nice-to-have as they come in handy on a situational basis—for instance, if you have a heart attack or get involved in an accident.


Personal accident insurance coverage

Personal accident plans provide payouts in the event the insured person encounters an accidental death, though some exclusions may apply (such as acts of war or acts of God). Certain insurance companies offer double indemnity, which pays double the sum assured for specific types of accidents.

MSIG Protection Plus offers one of the highest permanent and total disablement coverage. There are other personal accident plans providing unique benefits like the infectious diseases coverage from TIQ personal accident and the guardian angel benefit from FWD Personal Accident Insurance.  

What’s the right amount of personal accident insurance coverage? 

If you’re constantly on the road (especially more so if you’re a gig worker), personal accident insurance can enhance your overall insurance coverage as your risk of exposure to accidents is higher. Ideally, your personal accident insurance benefits need to be balanced out with your existing life insurance coverage to avoid any overlaps. 


Related Story: Best Personal Accident Insurance Plans in Singapore (2023)


Critical illness insurance coverage

Critical illness plans in Singapore cover 37 major critical illnesses (as stipulated by the Life Insurance Association of Singapore), offering insured persons a lump-sum payment if they’re diagnosed with a critical illness.

There are also a few plans that cater specifically to the top three critical illnesses — cancer, heart attack, and stroke. These include MSIG CancerCare, TIQ’s 3 Plus Critical Illness and Cancer plans, and FWD’s Big 3 Critical Illness and Cancer 2.0 plans. 


What’s the right amount of critical illness insurance coverage? 

A good rule of thumb to apply is to have six to 12 months’ worth of living expenses as your guide to the total medical coverage sum you need. 

Also, ensure your medical plan covers:

  • Costs of your treatment as extensively as possible
  • Time off work spent for recuperation
  • Follow-up treatments like counselling, physiotherapy, and more.


Related:  Best Critical Illness & Cancer Insurance in Singapore 2023


How to get holistic insurance coverage without breaking the bank

Determining if you’ve got too much or too little insurance coverage requires you to do the following steps:

Review insurance coverage adequacy

Ensure that your insurance coverage aligns with your actual needs by reviewing them from time to time. This saves you from over-insuring, which leads to paying for unnecessarily high premiums.


Do some comparative shopping

Get quotes from different insurance providers from websites like AMTD PolicyPal to get the best value for your money (and discounts, too).


Seek professional advice

Consult an insurance agent or financial advisor who can assess your needs and help you strike the balance between coverage and cost.

By actively managing your insurance coverages and staying informed about your options, you can ensure that you’re getting the best value and coverage. 


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Disclaimer: Protected up to specified limits by SDIC. This is only product information provided. You may wish to seek advice from a qualified adviser before buying the product. If you choose not to seek advice from a qualified adviser, you should consider whether the product is suitable for you. Buying an insurance product that is not suitable for you may impact your ability to finance your future financial needs. If you decide that the policy is not suitable after purchasing the policy, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by the insurer in underwriting the policy.


Read More:

Your Guide to The Best Home Insurance in Singapore (2023)

Best Car Insurance Plans in Singapore (2023)

How to Hire a Maid in Singapore

Insuring Your Future with the Right Insurance Coverage

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