My Insurance ‘Portfolio’

For the longest time, I have entrusted my health insurance needs squarely on my financial advisor. Never bothered about my policies. Just knew I was covered. And that was it. But as I finally embark on my graduate studies, I realised that I needed to scrutinise my plans and see where I can cut cost.

I’ve always felt I was spending too much on insurance: My biggest monthly expense is giving my parents an allowance; insurance premiums are a distant no. 2. However, as I delve into each of the 6 insurance policies under my name – ranging from Health, Life and Investments – I realised that each one of them is super helpful.

Here’s a snapshot of my 6 insurance policies that covers against death, disability, illness and a long stay in the hospital:

  1. PRUsave endowment – Savings
  2. PRUshield – Hospitalisation
  3. PRUextra – Hospitalisation co-pay and deductibles
  4. PRULink Protection PLUS – Cover for death, disability and illness
  5. PruLink Supersaver – Investment-Linked Plan or ILP
  6. AVIVA Mindef & MHA Group insurance – Cover for death and accidents

My first insurance policy was a Prudential endowment plan, PRUsave. This was set up prior to my university studies in the States. My savings from my NS days and my post-army 8-month work stint were channeled into this policy and my DBS Fixed Deposit. The monthly ongoing contributions cover me and, if not claimed, gives me a retirement payout in my late 50s.

After completing my undergrad studies and getting employed, I picked up a couple more policies – PRUshield (2) and ride PRUextra (3) – to protect me for up to $600K in hospitalisation bills. Now, I think this is the most important protection to purchase. Getting hospitalised will rack up hefty bills, and the last thing you want to worry about in such instances is the cost. Plus, you can use your Medisave to pay for PRUshield.

As for PRUlink Protection (4) and the AVIVA policy (6), these were purchased for give me adequate health/life coverage of around $200,000 or so – the recommended minimum sum assured, as I understand. That’s not to say that (1) and (5) don’t cover me. Although my ILP Supersaver plan invests my premium payments into unit trust funds, the investment value can be used for protection.

Now you might say that here in Singapore, we have the Central Provident Fund, or CPF, that serves as a safety net for health (MediSave & MediShield) and retirement planning. So why do we still need to get insurance when we have MediShield Life?

Well this MoneySmart article put it in the best way possible (hence, I’m just going to rip off this portion):

Think of it this way. MediShield Life is like the cheapest phone plan offered by your telco, but it only gives you 1GB of data and 30 minutes of talktime. You could live with those limits… but if you exceed them, you need to top up.

It would still be prudent to get optimal coverage for unexpected crises, and the best time is now because premiums rise the older you get.

Also, everyone insurance needs are different, so it’ll be best to talk to a financial advisor.

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