Insurance: Revisiting this topic again for the benefits of close friends

To begin this topic, I would like to stress again the importance of understanding the purpose of getting insurance policy. Getting an insurance plan is always and will always be about risk management. This must be the key focus. For example, we will get a medical insurance plan because we want to manage the risk of having to foot the full medical cost in the event of any critical illness. Other perks like investment returns should not be the key focus of getting an insurance plan. These needs can better fulfilled by other means such as a properly managed financial investment plan. Furthermore, insurance policy with investment return (e.g. ILP or living policy) will never guarantee you any return better than what you will get from a properly managed investment plan. It is also analgous to saying that a medical insurance plan will never guarantee good health.

Once you understand the purpose of insurance, we will now discuss what you should be focusing in the various stages of life.

A) When you are young or when you have just started working:

• Try to get a medical plan. The best time to get a medical plan is when you are young and healthy. Once your health deteriorates, it will be extremely difficult or impossible to get any company to insure you on that.

B) When you are starting a family or when there are dependents relying on your financial support

• Try to get some insurance to cover critical illness, death and permanent disability. If you are the sole breadwinner, this money will be especially important for your family in the event that something happens to you.


• You want have to do some detail calculation to figure out the coverage. This will be the amount that your family needs to tide over the difficult times.


• You can purchase a living policy or a term policy - it really depends on your preference and budget. But, if you are low on budget, there are quite a number of policies around that may be able to satisfy your needs. Try SAFRA living policy or NTUC LUV.

C) For the ladies

• Try to get policy to cover the women illness.

D) For the little children

• Try not to get any living policy for little children. They are not earning any income yet, so it really makes little sense to get a policy to cover income lost.


• Try to get a comprehensive medical plan to cover children illness.

E) For the elderly

• Try to sign up the elder shield, if you can. (I know it is very strange to classify people above 40 as elderly. Come on, we can still climb mountains and swim oceans. Anyway, this is government policy and I think they are trying to include the 40s earlier so that the premium can be reduced to a satisfactory level)


• If you can, sign up the supplementary plan as well.


• Our population is aging faster than you think. My thinking is that the premium rates of these plans will increase over the years.

As I am not an insurance agent or related to any, the above may not be the most professional view. Nevertheless, these are truely my personal opinion and I hope that it will help you in what you are looking for.

Disclaimer: The content in this blog contains purely my personal opinion and it is in no way a substitute for professional financial advice. You should seek advice from a professional financial advisor with any question regarding your financial matters.