Types Of Insurance Worth Having
These days, it seems as if there’s an insurance product for everything — engagement rings, babies, even pets.
The tricky part for consumers is choosing which policies are truly worthwhile; and which ones will never pay off. One rule of thumb: The insurance that’s worth it typically covers your health, your earning power or the assets you’ve accumulated, including your car or your home.
Here are six types of insurance policies everyone should consider:
No matter how little gray is in a person’s hair, anyone who has dependents, be it a spouse, children or aging parents, should buy life insurance. If they pass away, then their beneficiaries will likely receive the policy’s benefits tax-free.
Easy enough, but there are many choices. Deciding between term, traditional whole life and investment linked product insurance policies. A term policy offers life coverage only, and is typically offered in terms of 10, 20 or 30 years. A whole life policy offers life coverage with an investment component, and it can last until you’re 99. An investment linked product is the same with the only difference that the investment can be managed by you or your sdviser.
Critical illness cover is important as part of a sound financial plan. This protection pays out the sum insured when you are first diagnosed to be suffering from any one of the 30 critical illnesses specified. Among the specified illness are stroke, heart attack, cancer, loss of sight, hearing, speech, kidney failure, etc. This cover is typically bundled as an addition to a basic life insurance. Some insurers, offer standalone critical illness plans.
Some consumers feel that one downside of a critical illness benefit is that it usually allows claims only when the insured person is in advance stages of a critical illness. When it comes to a very early detection and no major treatment is required, claims are usually not paid.
You or your beneficiaries can make use of the payout to replace income you would have earned or to help pay off other expenses.
Hospitalisation & Surgery Insurance
Just because you eat veggies and hit the gym regularly doesn’t mean you’re immune to an illness, or won’t have an accident.
Everyone requires medical help at some point and if you don’t have insurance, the resulting bill is going to be painful. It can be a drain on family’s financial resources, destroying dreams and aspirations. Get admitted for food poisoning and the bill is close to a thousand. Get diagnosed with cancer and the expenses can go to of hundreds of thousands.
If your employer doesn’t offer coverage in a group plan, look into an individual policy. Even if your employer has in place a group plan, chances are, there are caps to the amount covered.
Find out how the details of your employer’s plan and fill in the gaps with an individual plan. Most companies offer it to be paid by Medisave, which is to be used for hospitalization bills anyway.
Personal Accident / Loss of Income Insurance
Few people like to imagine the worst-case scenario. However, we know that one major accident could keep a person out of work for months or even years. During this period, loss of income is especially serious for the self-employed. Even worse, those on a tight budget and without PA/loss of income insurance could face bankruptcy.
PA/loss of income insurance replaces a portion of up to 75% of lost income if the policyholder can’t work. There are companies that pay for employees’ accident insurance, or offer it as a voluntary benefit that employees pay for. Individuals can also buy their own policy and the premiums are not high.
Shop around carefully. These policies can be complicated. Example, they can differentiate between accident or illness. They can include many caveats, such as what is excluded. Also, costs will vary based on an individual’s income and type of coverage.
Due to the relatively high purchase price of cars in Singapore, most people choose comprehensive insurance for their car as compared to 3rd party liability only. This brings the price of comprehensive insurance down quite considerably. Influencing factors include excess and others such as young driver inclusion.
There can be No Claim Discount from not having claims over the last year. Expatriates have a high chance of enjoying the NCD from home country so take with you a proof of NCD from your insurance company.
There may occasionally be very large fluctuations in insurance premiums if the insurance companies have had a bad year. You need to source around if the premiums close to double.
Comprehensive home insurance covers the house and accidental damage to contents in it. Home insurance is especially useful for landed property owners as land movements and significant cracks in the structure appears more likely than in a condominium and HDB. Look for one that includes personal liability, which pays for medical expenses should someone become injured on the property or if, say, you accidently start a fire in your landlord’s building.
There is a less common renter’s insurance that covers all of a tenant’s personal belongings that are in the rented place. The best part is that these policies are relatively cheap.
Adapted from a story originally published on AOL on Sept. 8, 2008 by AnnaMaria Andriotis