Insurance does not have a one size fit all approach as coverage for every individual is different and would require policies tailored to their needs. Furthermore, with financial obligations and liabilities differing at every life stage, different policies would be required. To leave your insurance portfolio untouched would thus be a mistake as the policy that you bought when you were 25 may not be as relevant for your financial needs when you are at 50.
While it may seem tedious to regularly review your insurance policy, it is recommended that you look through your policies every five years. This is because your priorities and financial protection needs evolves at every life stage and this entails a shift in your insurance coverage. With there being insurance for protection, medical, hospitalisation and retirement purposes, it ensures that you have a policy that covers your needs at every life stage.
In "Average Singaporeans Need $1 Million Coverage. Have You Had Yours?", we explained how our mortgage, car and future expenses can potentially amount to more than a million dollars in expected liabilities. Thus, it is important that your insurance policies are carefully and wisely thought through so as to ensure that you are adequately insured with policies that are well-suited for your needs.
Before your 20s
As a student or full time NS men with no dependents or financial obligations, the need for a life insurance is low. Therefore, the suggested coverage to obtain would be hospitalisation plans to insure any required treatment costs in the event of a mishap.
(See "What Wikipedia Can't Tell You About Your Child's University Education")
In your 20s
Entering the workforce in your early 20s, your financial obligations and liabilities at this stage should be low. Therefore, priority for insurance should be given to yourself and the protection of your future income. Consider critical illness, hospitalisation and medical plans to protect your income and provide financial support in the event that you are unable to work. Alternatively, you could also take advantage of the lower premiums and purchase a term plan.
(See "How Do You Know If You Are Immune to Cancer?")
In your 30s
Getting married and starting a family are the common life stage changes that we experience in our 30s. With this change, protection needs and income replacement for your dependents thus becomes your priority.
Along with marriage comes the responsibility of financing your mortgage loans and protecting your spouse in the event that misfortune befalls. This makes mortgage insurance important as it prevents the financial burden of the remaining mortgage loans falling on your spouse should you meet with any mishaps.
When starting a family, it is also important that you purchase coverage to protect your family in the event that something unfortunate happens to you. To provide for income replacement, life insurance is recommended. While it is encouraged to obtain coverage worth ten times of your annual income, you could also use a life protection calculator to estimate your required expenses. Life insurance would allow your dependents a pay-out that could cover the potential loss of your future income, save for your child's education and help tide them over hard times.
(See "MRTA: The Difference Between Keeping or Losing A Home")
In your 40s
As you enter your 40s, it is time to start planning and saving for your retirement. Consider getting annuities or endowments that could provide you with a retirement income. An endowment plan could also help save for your child’s university expenses.
Additionally, as you may develop health conditions in your later years, it is advised that you purchase a medical or hospitalisation policy as soon as possible. This is to prevent potentially hefty premiums and to safeguard against the possibility of being uninsurable due to pre-existing medical conditions. Long term care insurance is also recommended in the event that you are unable to perform daily activities.
(See "Is Your CPF The Ultimate Piggy Bank?")
At the age of 50
As you enter retirement age, your priorities once again change. With your children grown up and less liabilities, a large coverage for protection would be of lower priority. Life insurance and disability protection also becomes less important without the need for income protection.
Instead, adequate hospitalisation and medical care policies should take priority to ensure that your hospitalisation and treatment bills are covered. Long term care insurance is another policy to consider as we explained in "Life Stage - Retirement".
(See "5 Awesome Facts You Didn't Know About Medisave & Shield Plans")
How FSMOne can help you get on track
Our team of friendly advisers are able to help you review your financial objectives, long term commitments, and offer you investment and insurance advice specific to your needs. If you would like assistance in reviewing your financial and protection portfolio, or simply to get a quote for an insurance plan, you can contact our advisers at advisory@fundsupermart.com.
Available Products on FSMOne Insurance |
Term Life, Whole Life, Critical Illness, Annuity, Health, Endowment from Manulife, NTUC Income and Tokio Marine Life Insurance *Please check with our advisory team if the product you want is available on FSMOne Insurance |
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