Have you bought insurance?
I always ask my friends this question because I know most of them can’t figure out what to buy, who to buy from. A good insurance agent will list down what you need the most, and plan what you should buying now, and what can be bought later. Sometimes, they will act as a financial planner, where they break down your expenses for you, giving you a list of what you can afford now.
Insurance is not just about what you can afford, is also about what is the most important. Luckily, I have a good agent, knowing her through my colleague. I choose my agent wisely and criteria is listed below
- He/she must be a full time agent.
- Must be around the same age as me.
After meeting her for the first time, I knew she will work long in this industry, hence I don’t have to worry about my name being passed down from agent to agent in the next few years.
So during the first meetup, she gave me a brief introduction, and asked what I was looking for. Since I was younger at that time, I did now know what to get. She did a chart for me and showed me how I should plan my insurance over the years. Let me share with you what I have:
- Critical illness
- Loss of Income
This is a must. Although most companies do buy insurance for you, the coverage might be limited, do check with your HR. If you do not plan to work in your current company for long, you might want to get one from your own agent. Although you can pay your hospitalization bills using your medishield, it only covers a certain percentage. Rider is a must, it covers the remaning % of bill which needs to be paid in cash. That % might seem small, but the value could be $10,000 or even $100,000.
Currently, the bill payment would be as below (same across all insurance companies):
(Payment by MedishieldLife) + ($3,500 in cash + 10% of bill in cash) = 100%
You can get the most basic payout, just enough to cover the daily expenses. For my plan, the most basic payout is $100,000 if I die in accident, $5000 medical reimbursement if I manage to survive.
- Critical illness
In the past I got myself this plan covering 30 Major illness (early and late stages). Recently I topped up to 37 Major illnesses (Early, Intermediate and late stage – applies to cancer). You have to check with your agent how it works. Different companies covers different stages, and from what I know Great Eastern has the best for coverage for early stage cancer). For your information, this is a lump sum payout. So the moment you are diagnosed with one of the illness in the 37 categories, you get to claim that sum you are promised of. There are different amounts for payout. Right now, I’m getting the most basic plan.
This is also a must buy for me, as you can see there are more and more people diagnosed with cancer, you’ll never know when it is your turn (of course TOUCH WOOD).
- Loss of income
This is the only plan which I did not buy. If you are an avid reader on our blog, you should be investing wisely yourself, loss of monthly income from your job shouldn’t be a big problem. However, if you are a bit kiasu, you can still get this plan. The insurance company will cover your monthly salary if you happen to have a loss of income.
Again, I bought the most basic plan. I also have another savings-linked life insurance, where my family will get a bonus payout on top of the total amount I have put in. Kill 2 birds in one stone. I don’t like the idea of paying a sum every month and you won’t be able to see the money until you are dead.
All of the above are for Wealth Planning. My agent did a Wealth Accumulating plan for me too. Basically it is just saving up so over the years, the interest accumulated can be use to pay off my insurance plan. If you have no self management in money, or you are an aunty like me, too afraid to invest in stocks, you can choose this option too. The interest I can get back is 3% of what I put in every month, and each year they will give a bonus amount on top of your 3% interest. Sounds like a good deal right?
Currently I do not have much liabilities, I can still afford the most basic plan for all. If you still think that you have too much liabilities and decide to put this insurance planning aside, remember, life in unpredictable. You do not know when you might meet an accident or when you will be diagnosed with illness.