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Insuring Your Future
Young working adults in Singapore would agree that insurance is a necessity, but few have a good understanding of it. The complexity of the topic intimidates people and its jargon confuses most. How many of us can actually understand terms such as “accelerated benefit” and “dread disease coverage?”
Still, one cannot afford to be ignorant about insurance. Life is unpredictable and even the best plans go awry. Insurance helps you to manage your risks and protect you. When an accident happens, the potential loss you suffer is transferred to the insurance company you have taken the appropriate insurance policy from.
The aim of this article is not only to help you understand why insurance is important but hopefully encourage you to take steps in insuring yourself.
Different Types of Insurance Coverage
Some of us may have some experience with or heard of the use of insurance. You may have filed a claim on your travel insurance plan after your baggage is lost after a flight, or your parents claiming some of the costs after an expensive visit to the doctor’s.
There are many types of insurance you can protect yourself with. For a start, we will focus on two that we think are essential: life insurance and medical expense insurance.
Life insurance generally covers you when a terrible event happens, such as death, total permanent disability (TPD which includes loss of limbs), or critical illness (such as cancer). Life insurance can protect those dependent on your income, whether it is you, your significant other, your parents or your children, so life can go on if your income doesn’t. It is never too early to get life insurance for yourself as premiums will increase as the years go by. Getting insured earlier means paying less in premiums in the long run.
Medical Expense Insurance
Medical expense insurance pays for medical expenses that can arise from any of the following medical treatments or procedures:
- day surgery
- consultations with specialists before, during, and after the hospital stay
- X-rays and laboratory tests
Meanwhile, ‘major’ medical expense insurance will pay for heavier hospital expenses due to major illnesses like cancer or major surgeries such as heart bypass and organ transplants.
Now that you know which types of insurance you should get, another question arises. How much should you be insured? People would usually look at the amount they need to sustain their expenditures. You should also project your future expenditures and consider the expenditures of those dependent on you.
To calculate these figures, CPF has good calculators that can offer you insights on how much you need to be insured.
Monitoring Your Insurance Policy
Now that you have purchased an insurance policy and are now well-covered, what’s next? You’ll want to make sure that your policies are always paid for, so you are always protected. You’ll also want to stay ahead of the game in insurance – meaning, you need to make sure your policies are not outdated. When you buy new policies or get new corporate policies, you want to make sure that you are paying as little overlap as possible.
*This article is written by PolicyPal and also shared on Funding Societies.
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