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How Much Insurance Protection Do I Need In 2023?

Sihan Chia

Sihan Chia

Last updated 27 March, 2023

How to plan your insurance coverage to be financially secure—now, and into retirement

It may be old news but the sobering fact remains - according to a 2017 Protection Gap Study by the Life Insurance Association (LIA) Singapore, for the average Singaporean working adult, there is a critical illness protection gap of >S$250,000 and mortality protection gap of around S$170,000. 

With the rise in living costs from inflation, healthcare and medical costs will increase  too. This raises the question: how many of us are insuring ourselves adequately? What is considered too much or too little? Can we get just enough coverage?

With that, it then makes sense that when it comes to our finances, protection planning should form a key tenet of our plans. With the startling gaps from the study though, it does seem that some of us may be one unexpected event away from a potential financial crisis. 

Such scenarios are commonplace, whether it’s in the headlines or from anecdotes. An acquaintance of mine was a caregiver for his ailing parents and had to almost empty his savings to pay off medical bills due to insufficient insurance. 

 

 


What is Insurance?

The basic concept of insurance is that one party, the insurer, is able to guarantee payment for an uncertain financial event. The other party, insured or policyholder, is willing to pay smaller premiums to the insurer for protection from these uncertain events, such as death, critical illness, and permanent disability.  

What is the core protection we should be getting from insurance? Broadly speaking, they fall into three categories:

1. Life insurance 

Covers you over a period (term life) or up to 100 years old (whole life)

Coverage for 

Plan

How it helps

Death of a breadwinner

Life Insurance, e.g. Dependants’ Protection Scheme (DPS), which covers death, terminal illness or total permanent disability (TPD)

Supports the family financially due to the loss in income 

Permanent disability

Life insurance

Payout covers living costs for the insured and family 

Death of home loan borrower

Mortgage reducing insurance e.g. Home Protection Scheme, which covers HDB flat owners using CPF savings or cash for a housing loan

Pays off the outstanding mortgage settlement if the mortgagor passes away

Savings plan with death and total permanent disability coverage

Endowment plans

Typically used for short to mid-term goals, such as a wedding or child’s education. Low-risk with guaranteed return

Related to this topic:

Best CareShield Life Supplement Plans In Singapore (2023)

Best Short & Long Term Endowment Plans in Singapore (2023)

CITIPLUS_BLOGARTICLE_800x250 (1)
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Compare the best term life insurance plans on our site. Get S$1 million coverage for just S$1.49 a day!

 

2. Health insurance 

Covers hospitalisation, critical illness and medical expenses

Coverage for 

Plan

How it helps

Medical bills, hospitalisation

Medical insurance, e.g. MediShield Life (for all Singapore Citizens and PRs), Integrated Shield Plans, other hospital and medical plans and riders.

In the case where you’re hospitalised due to illness or accident, the policy covers your treatment and hospital stay. You may also purchase a rider to cover the co-payment portions (e.g. deductible and co-insurance) not covered under the main plan. 

Critical illness

Critical illness insurance

Upon a critical illness diagnosis, the insurer will make a payout after ascertaining the diagnosis. There are also multi-claim plans to cover recurring illnesses. 

Long-term care for disability

ElderShield, ElderShield supplements, CareShield and CareShield supplements

Pays a fixed monthly amount for long-term treatment upon the insured’s inability to perform at least 2 “activities of daily living” (ADL) such as bathing and dressing.

Loss of income due to hospitalisation

Hospitalisation cash insurance

Provides income if you're hospitalised

Looking for an affordable Integrated Shield Plan (IP)? Singlife Shield Starter covers you up to S$20,000 per year for hospitalisation and day surgeries — great for young adults who want basic coverage. For more coverage, add on the rider, Singlife Health Plus Starter, at just S$1 and your co-payment will be reduced to just 5%!

 

Related to this topic:

Best Cancer Insurance Plans In Singapore (March 2023)

Best Critical Illness Insurance Plans In Singapore (March 2023)

Best Personal Accident Insurance Plans In Singapore (March 2023)

3. General insurance 

Covers your assets and liabilities such as house, car, pets and travel

Coverage for 

Plan

How it helps

Home contents

Home contents insurance

In the event of fire or theft, this plan covers the cost of repairs or replacement if you suffer loss or damage to your home or its contents. 

Pets

Pet insurance

Surgical expenses due to your pet’s injuries, sickness, specified congenital and hereditary conditions, third party liability, chemotherapy

Damage to your car or theft

Car insurance

Covers the cost of repairs or a replacement 

Damage to your home

Fire/home insurance

Covers the cost of reinstating damaged internal structures, fixtures, as well as areas built and provided by HDB

Loss of personal belongings, trip delays/cancellation, cost of medical care during travels

Travel insurance

If medical attention or an extended stay is required due to flight delays, travel insurance can cover the costs up to the sum assured. 

Related to this topic:

10 Best Car Insurance Plans in Singapore (March 2023)

Home Insurance Promotions And Discounts To Protect Your Home (March 2023)

Best Maid Insurance Promotions and Discounts (March 2023)

 

SingSaver's Best Price Travel Campaign: All successful applicants of participating Travel Insurance products will receive 1x (single trip) or 3x (annual trip) draw chance to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed (up to a maximum of $2,000) and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. Valid till 31 December 2023. T&Cs apply.

Travel Insurance Premium for Individual Cover Covid-19 Coverage Promotion

Starr TraveLead Travel Insurance


 

from S$11.05 (for 1 week in ASEAN)
Yes

Get up to $50 Grab Vouchers (min. Premium $30) and get 35% off when you use promo code SSVTL35. Valid till 10 Dec 2023. T&Cs apply.  Plus, till 31 December, every applicant will also score an Apple AirTag — perfect for keeping tabs on your luggage on your next trip — or a ReboundTag. T&Cs apply.

 

 

Enjoy 1x chance (Single Trip) or 3x chances (Annual Trip) to enter our weekly lucky draw. 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. Promotion ends on 31 December 2023. T&Cs apply.

 

Additionally, enjoy 1x chance to win your share your share of up to S$200,000 in prizes in our epic 101! Milestone Giveaway, including S$5,000 bonus cash each week on top of ongoing promotions!

MSIG Travel Easy

 

from S$34.10 (for 1 week in ASEAN)
Yes

Enjoy 40% off when you apply for Single Trips and 20% off for Annual Plan plus get up to $38 Grab Vouchers when you purchase now!! Valid till 17 December 2023. T&Cs apply. Plus, till 31 December, every applicant will also score an Apple AirTag — perfect for keeping tabs on your luggage on your next trip — or a ReboundTag. T&Cs apply.

 

Enjoy up to 3x chances to enter our Weekly Lucky Draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. T&Cs apply.

 

Additionally, enjoy 1x chance to win your share your share of up to S$200,000 in prizes in our epic 101! Milestone Giveaway, including S$5,000 bonus cash each week on top of ongoing promotions!

Allianz Travel Insurance
AZ logo

 

from S$34.10 (for 1 week in Asean)
Yes

Use promo code SSV50 to get 50% discount, up to $35 Grab Vouchers, and 1x Airalo eSim with up to 3GB data (minimum premium of $60) when you apply NOW! Valid till 8 December 2023. T&Cs apply.

 

Additionally, enjoy 1x chance (Single Trip) or 3x chances (Annual Trip) to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. Promotion ends on 31 December 2023. T&Cs apply.

FWD Travel Insurance

 

from S$22.50 (for 1 week in Asean)
Yes

Use the promo code 12TWELVE to get a 25% discount on Single Trip and Annual Trip plans! Valid till 3 Dec 2023. T&Cs apply. Also receive:

1x Airalo eSIM with up to 3GB data before your fly (minimum premium $60). Valid till 31 December 2023.

1x Apple AirTag (worth $45) for the first 3,800 applicants. Valid till 5 January 2024.

Additionally, be included in the following draws below:

Best Price TI weekly draw: Enjoy 3x chances to enter our Weekly Lucky Draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480.
101! Milestone Giveaway: Enjoy 1x chance to win your share your share of up to S$200,000 in prizes in our epic 101! Milestone Giveaway, including S$5,000 bonus cash each week on top of ongoing promotions!

Etiqa (TIQ) Travel Insurance
Tiq_Etiqa_LogoLockUp-02


from S$39 (for 1 week in Asean)
Yes

Single Trip: Use the promo code TIQSINGSAVER to get 40% off. Valid till 31 Dec 2023. T&Cs apply.

 

Annual Trip: Use promo code TIQSINGSAVER to get 60% off COVID-19 add-on. Valid till 31 Dec 2023. T&Cs apply.

 

Enjoy 1x chance (Single Trip) or 3x chances (Annual Trip) to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. Promotion ends on 31 December 2023.  T&Cs apply.

 

Additionally, stand to win S$3,000 in TIQ Travel Insurance Monthly Lucky Draw Campaign 2023 (Fulfillment by TIQ). Valid till 31 Dec 2023.

Singlife Travel Insurance

SINGLIFE_LOGO_200x50-2 


 

 from S$46.20 (for 1 week in ASEAN)
 Yes

Score an Airalo eSIM with up to 3GB data and receive it before you fly when you apply now! Valid till 31 December 2023. T&Cs apply.

 

Additionally, enjoy 1x chance (Single Trip) or 3x chances (Annual Trip) to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. Promotion ends on 31 December 2023. T&Cs apply.

 


Single Trip:
Enjoy a 25% discount when you use the promo code TRAVEL25. Additionally, get a free 6 months heatstroke insurance. Valid till 10 Dec 2023. T&Cs apply.

Allied World  Travel Insurance

Allied-World-Insurance-2

 

 

 from S$45 (for one week in Asean)
Yes

Enjoy a 45% discount for Single Trip and 15% discount for Annual Trip when you apply now! Valid till 31 Dec 2023. T&Cs apply.

 

Enjoy 1x chance (Single Trip) or 3x chances (Annual Trip) to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. Promotion ends on 31 December 2023. T&Cs apply

AIG Travel Guard® Direct 

aig-logo

 

from S$30 (for 1 week in Asean)
Yes

Single Trip:  Enjoy 20% off with promo code SS20OFF. Valid till 12 Dec 2023. Additionally get $20 PayNow! (minimum premium of $80). Plus, every 12th customer gets an additional $45 Paynow. Valid till 31 Dec.

 

Annual Trip: Apply promo code SSTGD to receive $200 PayNow! Plus, every 12th customer gets an additional $45 Paynow. Valid till 31 Dec 2023.  

 

Additionally, enjoy 1x chance (Single Trip) or 3x chances (Annual Trip) to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. Promotion ends on 31 December 2023. T&Cs apply.

Great Eastern Travel Insurance

Great-Eastern-1

 

 from S$52 (for one week in Asean)
Yes

Single Trip: Get an 30% discount when you use the promo code TSP30S. Valid till 31 Dec 2023. T&Cs apply.

 

Annual Trip: Get an 10% discount when you use the promo code TSP10A. Valid till 31 Dec 2023. T&Cs apply.

Discount is only valid for Elite and Classic plans.

 

Enjoy 1x chance (Single Trip) or 3x chances (Annual Trip) to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. T&Cs apply. Promotion ends on 31 December 2023. T&Cs apply.

Seedly Travel Insurance

seedly TI logo

 

from S$49.80 (for 1 week in Asean)
No

Receive 25% off and 1x Airalo eSIM worth up to 3GB data when you apply NOW! Valid till 31 December 2023.  T&Cs apply.

Win the equivalent of a return flight for 2 to Bali (via S$600 Klook voucher). T&Cs apply.

Enjoy 1x chance to enter our weekly lucky draw, where 1 lucky winner will stand to have their flight ticket reimbursed and 12 lucky winners will receive a Samsonite Volant Spinner 68/25 EXP worth S$480. T&Cs apply. Promotion ends on 31 December 2023. T&Cs apply.


 


How to ensure we get core protection

When it comes to protecting ourselves, our dependents and the things we value, optimising our coverage is key. But how does that scenario play out during a life stage where the focus is on increasing our earning power to hit other financial goals, such as setting aside an emergency fund or achieving financial independence and retire early (F.I.R.E.)?

Kyith Ng, author of financial blog Investment Moats, believes that when it comes to optimising coverage on a low starting income and trying to get the right protection, the base wealth protection should not kill your wallet. 

In an article where he shared how he optimised his premiums, he factors in his annual expense, which averages at S$24,000 a year. While conservative by today’s standards, the other question we had was, why is it important to factor in this figure?

Kyith shares that earlier in his career, he built the correct mental insurance blueprint, which led him to build a strong foundation to optimise his premiums. 

“In general, know what are the health risks that you wish to hedge, how big is the impact, how high is the probability, know yourself well and buy enough coverage,” he shares. 

He prioritises core protection plans as:

  1. Most important: Health insurance, disability insurance

  2. Important: Advance-stage critical illness, life insurance

  3. Less important: Health riders to cover co-payment, personal accident, early critical illness

“Knowing these layers allows you to reflect hard. In the event that stuff happens, would you want to bear the monetary risk, or do you want the coverage?”

Having bought seven policies at different junctures of his life, he jokes, "I always thought that my life wasn’t worth so much but that if I maintain my insurability I can scale up over time.

"So I got S$100,000 worth of SAF Insurance, which I added another S$100,000 eventually as the premiums were reduced over time. When I started work, I got a $100,000 Term from my AIA Tied Agent. I also got a S$100,000 term and a S$50,000 limited whole life from my IPP Financial Adviser.

"The thinking behind the limited whole life is that if I finish paying the premium for 20 years, I would have secured a life cover of death, total permanent disability (TPD), and critical illness."

Related to this topic: What Types of Insurance You Must Have At Every Life Stage


Should we mix insurance with investments? 

Before you purchase any financial product, it is important to understand what you are spending on. Some policy buyers may consider investment-linked products (or ILPs) for their hybrid nature of offering insurance coverage with an investment component. 

One can choose between a single or regular premium ILP, where the premiums are used to invest in units in one or more sub-funds. As the return is dependent on the funds performance, there is usually no guaranteed cash value for ILPs. 

As with all investments, the investor bears the risk of losing his capital and having to top up additional cash for the losses incurred. 

It’s worth noting that this type of plan becomes more expensive after the policyholder turns 50, as more of the premium goes to mortality coverage rather than investment. 

 

CITIPLUS_BLOGARTICLE_800x250 (1)
SingSaver Exclusive Offer: Enjoy 2x chances to win your share of up to S$200,000 in prizes in our epic 101! Milestone Giveaway, including S$5,000 bonus cash each week on top of ongoing promotions. Valid till 20 December 2023. T&Cs apply. Click here to check out our past Lucky Draw winners!

Receive S$50 cash upon starting a Citi Plus relationship and get another S$100 cash (total S$150) or an Apple Airpods (3rd Gen) With Magsafe Charging Case (worth S$271.50) or a Sony WF-C700N (worth S$199) when you fund a min. deposit of S$20,000 within 2 months of account opening and maintain it for 4 months. Valid till 7 January 2024. T&Cs apply.

Boost your returns with up to 2% cash back with minimum S$500 qualifying spend (capped at S$2,000) on your Citi Cash Back+ Mastercard Credit Card when you spend for a period of 12 months. In addition, enjoy up to S$699 worth of exciting gifts. T&Cs apply

Also, stand a chance to win a pair of Singapore Airlines tickets to Hong Kong in Citi Plus 1st Year Anniversary Lucky Draw! T&Cs apply.

 


How much insurance is enough?

To answer that question, it helps to bear in mind the primary role of insurance, which is to protect you, your family, or the things you value from financial loss. 

The key is to start small and scale up incrementally as you progress through your career. Working backwards, you will derive the minimum coverage that does not create a huge dent in your pocket. 

For life insurance, one should get the coverage when you’re young and healthy, such as after stepping into the workforce. Not only does it get more expensive with age, it is subjected to exclusions for certain pre-existing health conditions. 

For policies such as critical illness plans, conventional wisdom states the coverage should approximately be around 5-10 times of the insured person’s annual income. This is to help tide the insured and his family over this period of financial hardship. 

For Kyith, he recalls that his late parents did not have any insurance policies, which was a problem for them and remained a problem in the later years of their lives.

To avoid over or under-insuring ourselves, Kyith suggests two tips to manage our insurance coverage more efficiently: 

  1. Re-evaluate your policies from time to time. Use pivotal life events such as birth of a child, passing of a spouse, marriage, increase in work income, inheritance as triggers to review your insurance needs

  2. Always good to check with a trusted and experienced adviser regarding whether you have some blind spots

When it comes to life insurance, experts recommend getting coverage that's about 10 times your annual salary. So assuming you're earning a monthly salary of S$4,000 and up, you should consider purchasing a term life insurance of at least S$400,000 in coverage.

If you're thinking of purchasing a plan with higher coverage, you'll need to link up with an agent to get an offline term life insurance plan. 

Compare the best term life insurance plans on our site. Get S$1 million coverage for just S$1.49 a day!

 


Read these next

What Kind Of Critical Illness Insurance Do I Really Need?

Money Confessions: I Bought More Than S$700,000 In Critical Illness Coverage While In My 30s—Here’s Why

Critical Illness vs Cancer Insurance Plans: A Critical Comparison

4 Best Pet Insurance Plans To Protect Your Furkids

The Real Cost: Cancer Treatment in Singapore

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