By Richard Hartung
As our lives have become more complex and the insurance industry has become more creative, the range of insurance policies we can buy has mushroomed. Along with standard life, health and automobile insurance, you can also buy insurance to cover your pets, travel, smartphone, cyber-risk, artworks and more. With so many options, and the costs that come with them, the question is what you actually need in a relatively safe and less-litigious Singapore.
Insurance you Need Fundamentally, insurance is meant to give us financial protection if a disaster happens and buying the right insurance depends on your specific needs. Regardless of your situation, though, you should have two types of insurance coverage and consider a few more.
- Health Insurance: This is a priority policy. While Singapore is safe and healthcare is excellent, even medical care at government polyclinics or hospitals can be costly if you have a serious illness, and private healthcare costs even more. Having health insurance ensures that you can get the care you need. You might also consider buying critical illness or personal accident insurance, too, though it may not be needed.
- Disability Insurance: Even though many of us don’t expect to become disabled, statistics from the US Social Security Administration show that 30% of workers will become so disabled at some point before retirement that they are unable to work, and the Ministry of Health in Singapore says that half of healthy Singaporeans could become severely disabled in their lifetime. Even if you’re eligible for CareShield Life here, the payment of about $600 per month is hardly enough to cover your needs. Having disability insurance to make up for your lost income if you’re disabled and can’t work is essential.
- Life Insurance: Though less critical, with the need depending on your stage in life. If you’re young or elderly with no dependents and few obligations, you may need little or no life insurance. If you have a family or some large loans, though, life insurance is essential. An easy way to figure out the amount is to calculate how much you’ll need to pay your debts and to provide for your children, as well as your spouse, until the children are independent.
Other Insurance to Consider
Whether you need other types of insurance depends on your situation, such as your age and lifestyle, whether you have children and what your employer provides.
If you own a car, you’ll need automobile insurance to protect against liability and to repair or replace your car if you’re in an accident. If you own your home, you’ll need fire insurance and can benefit from a broader homeowner’s policy. A homeowner who recently paid about $28,000 to repair damage from a water leak found out the hard way. Whether or not you own your home, you should consider insurance for your possessions too.
Buying travel insurance for holidays or business trips can make sure you get medical care overseas and can pay for expenses if your luggage is lost, or you get stranded in a European city during a strike.
Where to Buy Insurance
There are plenty of insurance companies in Singapore that you can contact to buy a policy, ranging from local companies, such as Great Eastern, and NTUC Income to international companies, such as AIA and Prudential. While you can contact those companies directly, a better option may be to use a comparison website, such as CompareFirst, GoBear, Insurance Market or MoneyOwl. You can input information about the type of insurance you need and the coverage amount, as well as the duration, then easily compare quotes from a variety of companies. Be sure to look at factors such as coverage levels and deductibles, too, to reduce your costs.
Some of these sites, as well as personal finance sites such as ValueChampion, can also help you figure out which firms offer the best coverage.
The Bottom Line
As personal finance website seedly.sg says, insurance should be about getting sufficient coverage for the right reasons at the lowest cost. However, it’s important to figure out whether you actually need a policy when an agent is pushing it, as you may be better off self-insuring rather than paying for a policy.
Once you have insurance policies, they can become set-and-forget activities that you automatically renew. It’s essential, though, to review your coverage regularly, read the policies, reconsider the types of insurance you actually need and compare costs. Even though you hope you’ll never need it, having the right coverage is essential, should something unfortunate actually happen.