Many people are under the impression that one only needs to buy insurance later in life. However, that is far from the truth. The fact is that you can benefit from insurance at any age, whether you are single or married. Having insurance plans gives peace of mind early on; moreover, plans are cheaper when you are younger. In this article, we will take a look at 5 types of insurance plans that can benefit young adults in Singapore.
- Integrated Shield Plan
MediShield life may not prove sufficient for your health expenses, especially if you suddenly need an emergency surgery. In this case, it would help to have an Integrated Shield Plan. This health insurance plan will cover you for an extensive period for pre- and post-hospitalisation expenses. Moreover, some insurers offer a cover limit that extends as high as S$ 1 million or more which is a lot more than the MediShield Life cap of S$150,000. You can also get a rider that covers up to 95% of your medical expenses. This kind of coverage can prove helpful as you may not already have a lot of savings as a young adult.
- Whole Life or Term Life Insurance
People often feel that life insurance is needed only later on in life as one nears middle age. However, life insurance can prove helpful even for a young adult. It is important to remember that life can be unpredictable. If something unfortunate happens to you, your debt (if any) will fall on the shoulders of your parents or spouse. Having a life insurance plan can ensure that none of your debt falls on the shoulders of your family members. Plus, the payout can also help provide for them in your absence. It is definitely wise to buy life insurance when you are younger too as the premiums will most likely cost a lot less. You can choose between whole life insurance which covers you for your entire lifespan and term insurance which covers you for a fixed period.
- Critical Illness Insurance
A critical illness plan can serve to supplement your health insurance plan if you are affected by a major illness like cancer. Critical illness insurance pays a lump sum amount if you get diagnosed with the conditions covered. You can utilise this lump sum amount for a range of expenses that arise during your illness, such as the co-payment in your health insurance, the cost of running your home, and even to afford a domestic worker to care for you if needed. Remember that a critical illness might require you to take time off from work for treatment and recovery. The payout from this form of insurance can help you manage your finances during these difficult times. For reference when planning your sum assured, Life Insurance Association Singapore estimates a period of 5 years for treatment and recovery from a critical illness.
- Personal Accident Insurance
As a young adult, you probably have a hectic routine. You need to get to work, pick up the groceries, and quite oftem make time to catch up with friends. A trip on the stairs or an unfortunate accident on the road can leave you with injuries that may cause unplanned but necessary dent to your savings. In this case, a personal accident insurance plan can prove handy. Personal accident insurance provides coverage against accidental death and injuries. It also offers coverage for infectious diseases like dengue fever, insect and animal bites, and food poisoning.
- Retirement Insurance / Savings Insurance
It is never too early to start planning for your retirement. In fact, you may benefit from compounding interest since you have a longer runway, saving towards retirement insurance before you have a family to support. A retirement insurance plan can provide you a monthly payout that can function as income during your golden years. It can help you live your life carefree and allow you to pursue your life’s passions in your later years. Look for a good retirement insurance plan that safeguards your money against market volatility and allows you to nominate your spouse to succeed you.
Alternatively, you can also opt for a savings insurance plan which allows you to build a corpus of funds for the future. You can either opt for a single premium or pay regular premiums towards this type of a plan. As a young adult, you may find it easier to invest in this type of a plan before increased financial responsibilities set on later in life. You can thus aim to be financially ready and prepared for the future, come what may.
It is advisable to speak to a financial consultant for help and guidance while choosing insurance plans. We hope that this was an informative read for you today.