Types of policies
Most people would have at least 1 or 2 insurance policies and they think that they are covered completely. Well that is what they all think. Problem is when something happens
to them, they will start questioning why they are not covered, but by then, it would already be too late. So it is very important to find out what policies you have, and what
kind of coverage they provide, as some policies cover multiple type of incidents, while most do not. So let me briefly share with you what are the types of policies around.
Whole Life policies
They provide a lump sum of money upon death of the insured, or Total Permanent Disability, which will be paid out in installments.
Term policies - you pay the premium annually subjected to your age, older you are higher the premium. There is no cash value and you get nothing back at the end.
Life policies - you pay a fixed premium until the policy matures, upon maturity you will get back a sum of money aka the cash value of your policy.
Endowment policies - you pay a fixed premium until maturity where you will get back the cash value of your policy + a maturity bonus.
Annuity - Provides you with a steady income over a period of time upon retirement or anytime you wish to start.
Hospital and surgical - Typically covers inpatient outpatient and surgical cost. Coverage and claim amount differs per plan. Yearly renewable. Eg Medishield
Disability income - Pay you a % (usually 75%) of your last drawn pay should you be unable to continue working due to an accident or illness.
Long Term Care - Provides you with a monthly income should you be unable to perform a set number of Activities of Daily Living. Eg ElderShield
Hospital Cash - Provides you with daily income for being hospitalized.
Critical Illness- Provides you with a lump sum of money upon diagnosis of any of the 30 major critical illnesses.
Company Insurance - Depends on what your company bought for you, it can be a life policy or a healthcare, or even both. So do check to find out what coverage you are entitled.
Most people have a life policy or an endowment policy, and think they are covered for everything. But I have just list out 8 different policies that provide different types of
coverage. As such you should really find out what kind of coverage you are lacking or missing. What everyone needs is a H&S policy and a LTC policy, and while the government
has in a way forced us to buy a policy for both, the coverage provided is really very little. And when the time comes that a claim is needed to be made, you will find out that
you have a lot of limitations in claiming.
Another point to note is that at different stages in life, we have different needs.
Young and single - Endowment
Young and married - Life
Married with kids - Life & disability
Retired and old - Annuity H&S CI LTC
But for everyone H&S is a must. Everyone knows how high healthcare cost are, and to be sick is worse than death in Singapore. So protect yourself, and your family from
financial woes that will be cause by healthcare prices.