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. =)

Advertisements

4 Comments Add yours

  1. Nina says:

    Hi… do you mind to share from what insurance did you bought ? (Hospital,whole life) ? And for whole life, may I know how much the premium…?

    Thank you so much for sharing mommy…

    Like

    1. hi Mummy, I got hospitalisation and whole life plan for her. Also have a personal accident plan that we intend to stop buying from next year onwards. If you meant to ask about the company I got it from, the whole life is from AXA (but from what I hear they don’t sell that plan anymore coz it’s too costly for them)… the hospitalisation plan is from NTUC Income… Technically, my kid only needs hospitalisation plan since she isn’t earning any income. I got the whole life plan because I meant for it as a gift to her.. so that she doesnt have to worry about getting life insurance in future. We are paying about 1.1k premium per annum for the whole life plan (it’s a pay for 20 years then get coverage all the way until our kid turns 98 years old), for a death benefit of 50k, but before she turns 70 years old, the plan bumps up the death benefit to 3.5times of 50k. Do note that whole life isn’t actually the best kind of insurance to get, because it’s a bit costly, so for ourselves at this age we should probably get term insurance. But it’s really up to individuals. I’m just trying to get some compounding effect on my money for the kid’s future. I’m not a certified financial planner so please seek a second opinion ya.. This is just whatever we’ve done for our kid.

      Like

  2. Nina says:

    Thank You mommy for sharing. First time mommy here so need to learn from you. Your blog really help for 1st time mum like me.. all the best for you 🙂

    Liked by 1 person

    1. I’m glad the blog helps! Very encouraged by your comment =)

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s