There are lots of insurance out there, it is confusing trying to understand them all. In this video, I will share with you what kinds of insurance are out there, which you should get, and of course, how you can save on insurance. Enjoy!
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0:00 – Introduction
0:40 – Why do we need insurance?
If you are around 15-64 years old, there’s a 9% chance that you will be hospitalized. It will cost you at least $200 a day in a public hospital
1 in 4 person in Singapore will get cancer, and the cost for treating cancer is at least $8k a month.
2:10 – Health Insurance
Health insurance covers all the expensive hospital bills and outpatient bills. If you are a Singaporean or PR, you would already have Medishield Life. But that is still not enough as you would still need to pay a large sum of money. https://www.cpf.gov.sg/Assets/members/Documents/InformationBookletForTheNewlyInsured.pdf
That’s why you would still need to upgrade your Medishield Life to cover more. Check out the comparison website here at Seedly.
3:18 – Personal Accident Insurance
Personal accident insurance covers you if you get into an accident, like sprainig your leg or car accident. The payout from the insurance will cover your life expenses while you are recovering at home.
You can compare personal accident insurance here:
4:01 – Life Insurance
Life insurance is meant to cover 3 things:
1. Critical illness like heart attack, stroke, cancer
2. Total permanent disability, which means losing 2 parts of your body function, like 1 finger and 1 leg
If you have critical illness or total permanent disability, it is meant to cover your life expense while you are recovering at home. If you were to pass away, it will payout to your dependents while they find another way to survive.
5:05 – Life Insurance: Term Life
Term life will cover you up till a certain age, eg term life till 65 years old. The earlier you sign up, the cheaper term life will be.
5:48 – Life Insurance: Whole Life
Whole life will cover you for your entire life. The special part about this insurance is, you only need to pay for a certain number of years, eg 20 years, during which you will get full coverage. When you no longer need to pay, you will still be covered, but at a lower coverage.
This makes sense because while you still young and healthy, your family is dependent on you, and you do not have much savings. But after 20 years, your kids are independent and you have saved up for retirement. Even if anything happens to you, the burden on you and your family is lesser.
7:56 – Life Insurance: ILP
ILP is an insurance with investment linked to it, ie part of the premium will be invested.
– Investing portion: At later years when ILP is deducting the investing portion to pay for the insurance, if the market crash, you will have to top up money to cover the balance.
– Increasing premium: ILP insurance cost will keep increasing, eventually eating into your investment portion
– Premium holiday: Because there’s an investment portion to deduct from, you can stop paying for a while and you will still be covered
– Flexibility: You can modify the plan without having to top up money.
10:02 – Life insurance: Which to get?
Get the term plan if you want to save on premium and you invest your money. Whole life plan if you do not invest your money. ILP if you want the flexibility.
10:59 – Life insurance: How much to cover?
You should cover 5-10 times your annual salary, because if you have critical illness, you won’t be able to work and will need about 5 years to recover.
11:52 – Bonus tips
Do not be pressured by someone else to get an insurance. You must fully understand what you are signing up for
Get a reliable insurance agent, because you need him to be there when emergencies happen.