Guide: Insurance 101 – What is important and what is good to have

Just a short post on insurance. When Baby E was born, we were bombarded by financial advisers who advised us to purchase endowment plans, hospitalization plans, life insurance plans and so on… Which is really necessary?

Just want to highlight here as a disclaimer that this is just a commentary and please approach your financial planner if you need help because they have the necessary licenses to help you. These are just my experiences and what I learnt from school (I took financial planning courses previously).

For us, we got hospitalisation plan for Baby E, a personal accident plan and a whole life insurance plan. A whole life insurance plan is one that you pay into and eventually you can redeem it after a certain number of years if you don’t intend to keep it anymore. It’s cheaper to purchase when young because it’s lower risk to the insurers to insure the child and they can use the money to invest and grow it for their own purposes because the timeframe is longer. However, this is actually a gift for Baby B because the purpose of insurance is to cover for potential demise that will hurt the insured’s ability to generate income. So it’s more to protect your family and ensure that they have something to tide them over if you’re the breadwinner. So for now it is actually not necessary for her to have it, but we bought it so that she will not have to worry about whole life insurance plans when she’s entering the workforce. Similarly, the personal accident plan is a good to have and we only got it for the potential medical expenses for HFMD since she’s in childcare.

Hence, the only thing that is really important to get for our babies is a hospitalisation plan. They fall sick really often and Baby E has visited the A&E more often than me in my whole life (ok we’re worrywarts). Of course, that’s just my opinion and I’m happy to hear differing views if any. =)

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