The First Line of Defence

Before embarking on the challenging world of Investments, one must ensure the basic essentials for life are met. This meant getting yourself adequately covered by insurance, before channelling your surplus funds for investing. However, the extensive range of insurance plans these days simply leave people baffled. The purpose of getting insurance is that it protects you & your dependents against financial losses in the event of death, permanent disability, critical illness etc. So which do you get? Naturally, this would depend on a few factors such as the phase in life you are in, health status, risk exposure at work, no. of dependables, current total insurance coverage etc. Every individual case comprises of different factors, thus I shall give a hypothetical scenario.

Jack, Single, Unmarried, Working (receiving Employee CPF contribution), Age: 20-30s, Parents are non-dependables

Since Jack is receiving Employee CPF contribution, he has the option to undertake 2 CPF Insurance policies, namely the DPS & Medishield schemes. These 2 policies cover term insurance and H&S (Hospitalisation & Surgerical). Although these 2 plans provide inadequate coverage, I still suggest taking both up. Reason being (a) Premium payment comes from CPF (b) For the coverage provided, premium paid is considered low. To ensure adequate coverage, supplement with other plans such as

1. Term-insurance (An alternative would be whole-life insurance, however, premium paid will be higher for same amount of coverage)
2. H&S insurance
3. Disability Income Insurance

In Jack's case, he may even wish to opt out the term insurance policy as he just started work & does not have surplus cash to pay for the numerous premiums. This is because he (a) has the DPS policy (b) his parents are self-reliant & do not depend on him for money.

Pls consult your Financial Advisor for a comprehensive analysis based on your own needs.