#LIFEHACKS
Insuring Yourself

Recent events put a spotlight on this important life investment.

By Kelvin Low      12 June 2020

Good to have: Disability Income Insurance

While not directly health-related, this insurance is worthy of consideration. Chances are, you are raising a family and suddenly having a loss of income can be a huge blow to your family’s finances. How this differs from PA lost income benefits, is that this pays up to 80% of your average monthly salary.

This will pay you for the loss of income due to an accident or illness. The policy payouts are typically offered monthly. Payouts will continue for as long as you are not able to earn an income due to a temporary or permanent disability until you turn 65 years old.

Disability income is commonly confused with Total Permanent Disability (TPD) insurance which pays a lump sum upon severe disability. TPD is usually part of a life insurance policy.


Plan to have: Long Term Care Insurance

This defrays the costs by paying a fixed monthly amount for long term nursing treatment, if you are unable to perform a number of daily activities such as eating and moving around.

Sounds familiar? The current basic long term care insurance, ElderShield, will be replaced with CareShield Life this year. This will be made mandatory for all Singaporeans and Permanent Residents with the option to use MediSave funds.

While not exactly an insurance that the young working force needs now, it is good to plan ahead for your own long-term care needs, as this reduces the burden on your family or caregiver. This insurance is a way to ensure that you will be able to afford the care you might one day need.

Before you go: No one-size-fits-all insurance

It is hard to determine which is the “best health insurance”. Insurance policies are extremely complex, and there is no one-size-fits-all policy. Before you purchase a new policy, it is important to understand the policy coverage, as well as your needs based on your life circumstances.

References:

https://www.moneysense.gov.sg/articles/2018/11/understanding-health-insurance
http://www.smj.org.sg/article/health-insurance-singapore-whos-not-included-and-why
https://www.moh.gov.sg/resources-statistics/educational-resources/what-you-need-to-know-about-health-insurance-(challenge-magazine-article)

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