
#1 Panic buying insurance
With the ongoing Covid-19 pandemic, some have been rushing to purchase groceries while others rush to invest. However, have you been guilty of panic buying insurance?
While you may panic if you think that you lack ample health or life coverage, panic buying insurance could result in you going from being underinsured to being overinsured. This could result in you getting policies that are not suitable for your needs or paying for premiums that are more than what you can afford. Additionally, while it is important that you review and ensure that you have adequate coverage, there are two things to keep in mind: only buy what is necessary and think long-term when purchasing coverage. If you are unsure as to whether you have sufficient coverage, you may use our discovery tool or speak to an adviser to find out more.
(See "Is Your MINDEF Group Insurance Really The Cheapest?")
#2 Over reliance on your employee insurance benefit could be detrimental
Have you been overly reliant on your employee insurance benefit, using it as your only insurance coverage? If you have been doing so, then perhaps it is time to reconsider your decision.
As explained in our article "Is My Employee Insurance Benefit Really Reliable?", we do not encourage anyone to solely rely on their corporate insurance for coverage. This is because not only do you not have control over your employee insurance, but you would also lose coverage in the event of a retrenchment. This could put you at risk of being uninsurable or having higher premiums due to pre-existing health conditions.
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(See "An Introduction To International Health Plans")
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#3 The importance of an emergency fund
You may have to rely on your savings for your daily expenses if your job or income is affected by Covid-19. In such a scenario, having an emergency fund could come in handy.
A sum that is set aside and left untouched for unplanned expenses – this is the concept of an emergency fund with it intended to tide you through a period of uncertainty. To determine how much you need in your emergency fund, start by estimating your monthly expenses. Do take into account recurring expenses and any big upcoming purchases. Next, estimate how many months you think you would need to recover from the financial impact and set aside an amount that would be enough for that period. If you are the sole breadwinner of your family, consider setting aside a larger sum of money. Having an emergency fund would help you to tide over this crisis and could lighten your financial burden.
(See "3 Reasons To Not Get Basic Critical Illness Insurance")
Lastly, if you are struggling to pay for your insurance premiums, you may be eligible for a premium deferment.
If you are struggling to pay for your insurance premiums due to a reduced income or retrenchment, do note that MAS has released a circular on 31 March 2020 announcing the possibility of deferring your insurance premiums. As the conditions for eligibility are likely to differ between insurers, you may check with your insurer or adviser to find out if you are eligible for a premium deferment.
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Information is accurate as of 26 May 2020.
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