How Much Insurance Coverage Should You Get? 6 Singaporeans Share

Money Confessions: 6 Singaporeans Share Just How Much Insurance Coverage They Have

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How Much Insurance Coverage Should You Get? 6 Singaporeans Share

Real stories about money from real people. Money Confessions, a SingSaver series, will excite you, inspire you, and leave you wishing to get financially woke.


Insurance might be a sensitive topic in Singapore, but it’s essential for folks young and old alike. Six Singaporeans share their level of coverage while SingSaver’s insurance specialists chime in with their expert opinion.

It’s no secret that insurance is a touchy conversation topic in Singapore. After all, it almost always involves a segue into more serious discussions regarding illness and death. And who can forget the relatively unsavoury reputation that financial advisors have in the Lion City?

Nevertheless, insurance coverage is still vital and Singaporeans know it.

In the first half of 2021, Singapore’s life insurance industry garnered S$2.68 billion in new sales alone, according to a report by the Life Insurance Association. Tech-savvy individuals boosted their insurance coverage too, with over 203,000 new policies purchased online during the same period of time.

The same report also detailed that 70% of Singapore residents currently have integrated shield plans and riders, highlighting that folks here are indeed cognisant of how important insurance is.

SingSaver speaks with six millennials in Singapore regarding just how much insurance coverage they have, while our team of insurance specialists chime in with their expert opinion.

  1. Desmond Fung, 26 years old, Auditor
  2. Melinda Woo, 24 years old, Content Writer
  3. Nelson Tan, 27 years old, Social Worker
  4. Aminah bte Hamzah, 26 years old, Assistant Producer
  5. Mario Ang, 27 years old, Freelancer
  6. Fiona Lee, 26 years old, Marketing Executive

1. Desmond Fung, 26 years old, Auditor

Number of insurance policies and types held

One term life insurance policy with a sum assured of S$360,000.

One health insurance plan that covers up to Class A wards in public hospitals.

What Desmond says

This term life insurance policy was purchased by my parents when I was born. I feel that my current level of coverage is sufficient as I’m still young and not working in a high-risk industry. What would make me alter my level of coverage depends on the different phases of life I enter.

These phases include preparing to become a parent or retirement down the road. Age plays a part in helping me decide whether to tweak my level of coverage too.

What SingSaver’s insurance specialists say

Desmond has got the basics right but he also has several misconceptions about insuring himself. Do note that the term life policy his parents bought for him aids his beneficiaries only. And remember, being young and insuring yourself means lower premiums.

It’s a common belief that when you want to buy an insurance policy, it is most probably too late due to a health scare or event that has triggered your purchase decision.

Other than age, here are some factors that should be taken into account: family history, lifestyle and future income. He should consider getting either a multi-stage critical illness plan and investing his spare cash for his retirement years.

He can adopt a buy-term-invest-the-rest (BTIR) strategy if he does not prefer to invest in insurance, allowing him to grow his money for any possible emergencies.

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2. Melinda Woo, 24 years old, Content Writer

Number of insurance policies and types held

One health insurance policy with a rider for private hospitals.

One personal accident insurance plan with a sum assured of S$100,000.

One critical illness policy with a sum assured of S$100,000 and early critical illness coverage.

One savings plan with sudden death coverage of S$17,000. The first payout will be in my early 40s.

What Melinda says

The savings plan was purchased when I was 19 years old while the rest of my insurance policies were purchased upon confirmation of my first full-time job this year.

I purchased these insurance policies because I felt it was the responsible thing to do. I could protect myself and my family in the event of an emergency as my parents do not have much savings.

The savings plan was purchased to force myself to build a habit of saving.

I feel that my insurance coverage is sufficient for people my age, but I’d increase my level of protection if my salary rises significantly or if I’m going to try for a child in the future. That would probably involve another savings plan with a higher monthly repayment.

The rationale behind that would be to pay for my children’s university education.

What SingSaver’s insurance specialists say

Melinda understands the importance of early planning and safeguarding herself from unforeseen events. Giving herself a long time horizon for wealth accumulation could mean a bigger payout at the maturity of her endowment.

If the priority is for protection in the event of death, given that Melinda is still young, a whole life or a term life policy will be the best for her. This policy might not need to be attached with a critical illness rider if she feels that her current critical illness policy is adequate.

If she prefers to have more money for investments, do consider BTIR, but ensure that the coverage of her term life plan is adequate for her parents financially.

Using financial goals such as a child’s university education fees to get endowment plans is a great idea. It circumvents any potential economic downturn during the year of withdrawal that makes it more costly to withdraw any other investments made. This includes stocks, ETFs, and more.

This stability is due to the payout’s date being explicitly stated in your insurance documents, along with a guaranteed base amount.

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3. Nelson Tan, 27 years old, Social Worker

Number of insurance policies and types held

One whole life insurance policy with a sum assured of S$500,000.

One multi-claim critical illness insurance policy with a coverage of S$90,000 per claim.

One term life insurance policy with a sum assured of S$500,000.

One health insurance policy that will cover 90% of hospital bills.

What Nelson says

I purchased my term life insurance plan several years back while I was still in National Service. Health insurance was purchased by my parents while the whole life and critical illness plans were bought in 2020.

For the latter two policies, I bought them under the recommendation of a friend who’s also my insurance agent.

I did my own research to determine whether these policies are appropriate and cross-checked with two other friends who are insurance agents as well.

I feel that I have sufficient insurance coverage. My monthly payments, if I were to take the annual premiums and divide them by 12, are around 15% of my monthly income. I would likely not decrease my insurance coverage but would only increase it if my salary increases by a substantial amount.

What SingSaver’s insurance specialists say

Nelson has solid insurance coverage. However, his policies are heavily veering towards the protection of his beneficiaries should anything untoward happen to him. A whole life plan is a great investment to make as it ensures protection in his old age.

Adding on a term plan and critical illness plan is a great strategy, by treating the whole life plan as the base policy with the other insurance policies being modular add-ons around it.

It is also commendable that Nelson took the effort to get opinions from a few of his friends who are insurance agents. Further steps that he can take would be to regularly consult his agent to ensure any changing needs are met.

A critical illness plan’s payout should cover for his recovery period sans any entitled hospitalisation leave. Retirement plans can be considered earlier (if his finances allow), as he can contribute to such a policy earlier and take advantage of compound interest that will increase his returns.

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4. Aminah bte Hamzah, 26 years old, Assistant Producer

Number of insurance policies and types held

Two whole life insurance policies with sums assured of S$80,000 and S$50,000.

One personal accident insurance plan.

What Aminah says

My parents bought the S$50,000 whole life insurance policy for me in 2011 and I purchased the S$80,000 whole life insurance policy and personal accident insurance plan in 2020.

I purchased the latter two as I felt I needed more ‘protection’ due to the nature of my job, where I’m always on the move.

I feel that this level of coverage is sufficient for my age and I would continue with both policies I bought in 2020 even if I were to move to a ‘safer’ job or quit my current one.

For the whole life insurance policy – if I remember correctly – the insurer has a scheme where if you’re retrenched or unemployed, you can opt not to pay your premiums for that period of time. Then, you can resume repayment when you have a stable income again.

I’d increase my insurance coverage if there are better policies that cover more than what my existing plans do. For example, policies that have mental illness coverage. I might also increase my insurance coverage as we’re living in such unpredictable times.

What SingSaver’s insurance specialists say

Aminah made a great choice by adding a personal accident insurance plan to supplement her coverage as the nature of her work requires moving around. As a result, her occupation increases the risk that she’s exposed to.

It is also worth mentioning there are other benefits such as physiotherapy and outpatient medical expenses that could be useful if an unfortunate event happens.

What Aminah could do to improve her overall protection is adding a term life insurance policy if she needs more pure protection. Do take note that the deferment of payments, also known as a premium holiday, is subject to a certain length of time and she will have to pay the premiums back in full.

We will urge Aminah to get hospitalisation insurance as it’s the cornerstone of all insurance plans in Singapore. Hospitalisation plans are important as they help to offset huge bills and conserve your MediSave balance for when you’re older.

These plans also cover for other ward types, which will be useful in an emergency if there were no other ward options available for you.

On top of that, they have a higher limit on certain benefits such as chemotherapy and dialysis, which is helpful should you require it in the future. Health insurance plans are subject to underwriting, so please get it when you’re healthy.

Whole life policies are good, but hospitalisation insurance is even more important.

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5. Mario Ang, 27 years old, Freelancer

Number of insurance policies and types held

One whole life insurance policy with a sum assured of S$150,000.

One personal accident insurance plan with a sum assured of S$250,000.

One savings plan with sudden death coverage of S$30,000.

One health insurance policy.

What Mario says

I purchased these insurance policies across 2020 and 2021. I feel that these are the basic policies that everyone should have. Everyone is bound to die one day, but we do not know when that will happen.

The life insurance plan ensures that your life is worth something. After you’re gone, at least the people you care about will get the sum assured.

The health insurance plan allows me to be safely covered if I am ever hospitalised. As we all know, healthcare is expensive and this really helps lessen the cost. The savings plan disciplines me to save money, plus interest rates are very low now.

Last up would be the personal accident insurance plan. As I said, life is random, we cannot predict what will happen to us. Accidents might happen to us at any time and this plan helps to ensure coverage in the event of one.

I feel that this is just the basic level of coverage. There is more coverage if you plan well with your agent. There are many more policies that I have yet to plan for at my current age, like critical illness.

The more money I make in the future, the more coverage I will get for myself. This allows me to think for my family and lessen the burden if something were to happen to me.

What SingSaver’s insurance specialists say

Whole life policies are good, as mentioned above, but do review your needs every year or two as life’s ever changing circumstances might propel us to either cancel or increase our coverage.

Being a freelancer, he does not have the luxury of a corporate group healthcare insurance to protect him. Therefore, it is very good that he has taken steps to get both health and personal accident insurance policies to mitigate any unforeseeable effects on his finances.

Also, do read up on your benefits for the personal accident insurance policy as there are things that do not require death in order to claim. These include TCM, physiotherapy, or even outpatient visits to the GP should an accident occur.

Having an endowment plan or retirement plan is a good way to stay disciplined in saving money as self-employed individuals do not automatically contribute to CPF.

Many self-employed folks are caught off guard when nearing retirement as they realise inflation has raised the monetary standards to retire.

Additionally, review these plans once in a while to see if any needs can be addressed with another savings plan in the future or alternatively invest your money elsewhere such as ILPs (not for everyone) or robo-advisors.

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6. Fiona Lee, 26 years old, Marketing Executive

Number of insurance policies and types held

One term life insurance policy with a sum assured of S$150,000.

One health insurance policy.

One personal accident insurance plan with a sum assured of S$100,000.

One cancer care insurance plan with a sum assured of S$60,000.

One endowment plan.

What Fiona says

Most of my insurance policies were purchased by my parents when I was younger. Some of these were when I was as young as three years old and others would be as recent as two to three years back. I think they just followed the recommendations of their insurance agent.

The only one I bought was an endowment plan from another insurer.

I think that my insurance coverage is quite comprehensive. The insurance policies I have cover everything and I think I might even have more than enough coverage, since most people usually recommend getting just life, critical illness, and cancer care insurance.

As for purchasing new insurance policies, I think it really depends on whether there’s anything new. For now at least, I don’t think there’s a real need or urgency to buy any new policies.

What SingSaver’s insurance specialists say

Fiona has a well-rounded protection portfolio, covering most areas. We suggest bumping up her term life coverage to approximately nine or ten times her annual salary (as recommended by the Life Insurance Association).

Additionally, do note that cancer care only protects you against cancer and none of the other critical illnesses, so do consider supplementing coverage in the form of a multi-claim critical illness plan as it provides additional protection.

Cancer is the most common form of critical illness and it is always good to have additional protection should it, unfortunately, afflict you.

As always, do schedule regular reviews with your trusted financial consultant due to your needs and priorities changing every now and then based on your current life stage.

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In conclusion

There you have it. It’s clear that even young Singaporeans understand how important having proper insurance coverage is, despite it being a topic that not many find easy to discuss. It’s encouraging to see millennials start planning for retirement and protecting themselves against income loss.

As SingSaver’s team of insurance specialists mentioned above, it’s good to start planning ahead while you’re younger due to the lower premiums charged.

Because you know what they say about the consequences of failing to plan.

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By Ebel Tang
A geek culture enthusiast who’s also a little too invested in the wide world of whisky and watches. And no, he was not named after the Swiss timepiece brand.