Popular insurance policies most Singaporeans buy | Understand the difference in Home insurance, Car insurance and many others
Insurance is becoming a necessity in an era where unexpected natural calamities and human-made events can result in unbearable financial losses. Insurance is an essential component of personal finance, seen as a reliable way of shielding oneself from unforeseen disasters.
There are different types of insurance policies, all designed to provide a layer of financial protection should the inevitable happen on the insured or property. Buying the right insurance policy is of utmost importance as it ensures one is able to bounce back in case of any eventuality, down the line.
Term Life Insurance, Health Insurance Home Insurance, and car insurance are some of the most sought-after insurance plans in Singapore.
Below is a simple guide as to why taking any one of the policies mentioned above, is a must if one is to live a stress-free life.
Term Life Insurance
Term Life insurance is a type of coverage that ensures loved ones receive financial support for a certain period, in case the insured is unable to provide for them. In most cases, term life insurance policy provides coverage against terminal illnesses that might make it impossible for the insured who might be the bread winner to work, as well as in case of death.
Standard terms in Term life insurance are 10, 20 or 30 years. These types of plans pay a sum assured upon the death of the insured or in case, the insured is totally or permanently disabled. Most term insurance policies cost less than whole life and endowment insurance policies for the same level of coverage.
When You Need To Buy Term Life Insurance
The best age to buy term life insurance is right after birth given that these types of policies tend to become expensive as one ages. However, the policies should be reevaluated every few years, as a way of ensuring it fits a given lifestyle.
For instance, once kids are all grown up and can fetch for themselves one could opt out of a term life policy. A term life insurance would also not make any sense in case of a spousal death or divorce. In case of these events, it might be appropriate to invest the monthly or annual premiums in investments that are able to generate higher returns.
Why You Need a Term Insurance
Compared to Whole Life Insurance, Term Life insurance rates tend to be relatively cheap as the policy offers coverage for a predetermined time
Term Life insurance also tends to be quite flexible as one is usually given the option of negotiating the period of coverage. Some insurance companies also allow one to lock rates for a few years in case one needs to covert a short-term debt.
Simple to Understand
Term Life insurance are easy to understand as one only needs to grasp the coverage amount, length of term and preferred company.
Term Life Insurance Premium Comparison Singapore
Male Non Smoker
Female Non Smoker
What is Health Insurance?
Health insurance is a type of insurance policy that covers part or all medical costs, in case the insured is hospitalized. The policy provides coverage for medical and surgical expenses. Depending on the insurer, one may pay for costs out-of-pocket and then be reimbursed later. The insurer may also make the payments directly.
Singapore boasts of one of the best healthcare sector in the world. However, it comes at a premium cost. MediShield is the country’s most popular insurance policy that subsidizes medical fees for specialist treatment and hospital accommodation.
MediShield only covers citizens and permanent residents. Given that foreigners don’t qualify for this cover, they are required to undertake basic insurance coverage from private insurers.
Health insurance in Singapore can be classified broadly into Medical expense insurance, hospital cash insurance, critical illness insurance, disability income insurance, and long-term care insurance.
Types of Health Insurance Available in Singapore
Hospitalization & Surgical Insurance is a primary type of insurance plan that reimburses hospitalization and surgical costs incurred because of accidents or illnesses.
Catastrophic Medical Insurance: It covers major illnesses such as dialysis, chemotherapy, and radiation, known to command steep medical costs
Long-Term Care Insurance: It is a type of health insurance coverage, which provides a monthly amount for a given period in case the insured is not able to work because of illness or incapacitation
Critical Illness Insurance is a type of health insurance that disburses a lump sum in case the insured is diagnosed with a critical disease.
Why you need a Health Insurance in Singapore
It is important for anyone residing in the country to have some form of health insurance given that medical and hospitalization fees can run up to tens of thousands of dollars. It is common practice for people to insure their cars homes and other valuable items, so why not also place some value on life?
Another reason to get a health insurance has to do with the fact that that some insurance companies offer plans that pay a daily amount for each day one is hospitalized. These type of policies also provide coverage for life-threatening critical illnesses that can be expensive to pay for, out-of-pocket.
Some plans offer lump sum payment upon diagnosis and confirmation of certain critical illnesses such as stroke, cancer or kidney failure
When to take health Insurance
For Singapore citizens and permanent residents, MediShield coverage kicks in from the first time one makes a Medisave contribution. However, one can also commence earlier. For foreigners on a work permit, the employer is required by law to provide health insurance coverage of at least $15,000 per year, right from the first date one starts working.
Singapore Health Insurance Plans Comparison
|Insurer||Coverage Limit||Coverage Location||Annual Premium|
|AXA||S$1 Million (Includes Outpatient )||Singapore||S$2,424|
Home Insurance is another must have insurance policy that anyone wishing to protect their properties from unforeseen events must take. This type of coverage is designed to protect insured people’s home as well as valuables against unexpected events such as fire, floods, and theft.
In case of any unforeseen incidences, Home insurance policies cover any damages caused to the physical structure as well as the belongings inside the house. Comprehensive home insurance policies go the extra mile to offer protection to any damages caused to third parties inside insured properties.
It is easy to secure home insurance policy, as long as a property is located in Singapore. To apply for a home insurance policy, you only need to be an owner or a co-owner of the property. For tenant insurance, one must be a tenant for a property located in Singapore.
Types of Home Insurance Coverage’s in Singapore
Homeowner Policy: It is a policy for homeowners, designed to provide coverage against any damage caused to the physical structure of the home as well as the property at large.
Renter Insurance: This is a home insurance policy designed for people residing in rented houses. Such types of policies provide coverage for valuables inside the house. They address the limitation of home insurance which in most cases do not cover belongings inside a rented home.
Why You Need Home Insurance
Home insurance provides coverage not only against natural calamities but also man-made mishaps that under normal circumstances would be hard to control. Such type of policies will allow one to recover losses for rebuilding a house in case of fire, floods or earthquake.
Home insurance policy not only provides coverage against damages caused to the physical structure but as well as belongings inside the house. For instance, such policies may cover all the costs of replacing money, debit & credit cards as well as other important documents.
A home insurance policy will also protect against liabilities caused to a third party inside an insured property.
Singapore Home Insurance Plans Comparison
|Insurer||Building Coverage||Content Coverage||Personal|
|FWD Home Insurance||$80,000||$40,000||$500,000||$57|
|MSIG Enhanced Home Plus Standard Plan||$75,000||$50,000||$1,000,000||$119|
|Sompo Homebliss Cosy Plan||$80,000||$20,000||$750,000||$96|
|HLAS Home Protect 360 Silver Plan||$100,000||$100,000||$500,000||$384|
|AXA SmartHome Essential Standard Plan||$50,000||$15,000||$250,000||$54|
Car owners around the world are known to be protective of their cars as they perceive them as one of their most priced assets. Given the multiple risks that come into being with owning a car, car insurance is no longer an option, but a necessity as a way of protecting oneself from accidents, damages, theft and vandalism.
Car insurance is a contract between an owner of a car and insurance company, designed to protect against financial loss in the event of an accident or a theft. Car insurance provides coverage for damages caused on a car or if it is stolen.
Car insurance also provides coverage for any bodily damage caused to third parties as well as property. Some policies also cater for costs of treating injuries, rehabilitation and in some cases cater for funeral expenses.
Most car insurance plans in Singapore require car owners to pay an annual premium thereby shielding them from having to make lump-sum payments in case of an accident.
It would be wise to take auto insurance as soon as one purchases a car given the unpredictability of events that may lead to loss of life, injury or damages.
Types of Car Insurance in Singapore
Third Party Insurance
The policy protects the policyholder against any legal liability in case an accident results in damages to a third party, property or body harm to other individuals such as passengers and pedestrians. It is a cost-effective policy as it provides the least amount of cover.
Third Party Fire and Theft Insurance
In addition to providing coverage for damages, injury or death caused in accidents, Third Party Fire and Theft Insurance protects against losses caused by theft vandalism and fire. This policy is relative expensive compared to Third Party Insurance given the increased coverage.
It is worth noting that this policy is mandatory for car owners whose vehicles are more than ten years in Singapore
Comprehensive auto insurance is designed to protect against a variety of damages and threats. It is the most popular car insurance policy in Singapore. It provides cover against legal liability that may arise because of an accident, causing bodily harm or death to a third party. It also covers loss or damage caused to the vehicle itself, as well as medical expenses in case one is hospitalized.
Car insurance Plans Comparison Singapore
|Insurer||3rd Party |
|Personal Accident Benefit||Medical Expenses |
|NTUC Car Insurance||Up to S$5 Million||S$20,000||S$300||S$500|
|OCBC Autowise OCBC Bank||Up to S$5 Million||S$50,000||S$500||Free|
|AVIVA Car Insurance||Yes||Up To S$100,000||S$1,000||–|
|MSIG||Up To S$5 Million||S$100,000||–||Yes|
|Liberty Car Insurance Privilege||Yes||S$50,000||S$1,000 Per person||S$300|
|China Taiping Insurance AutoExcel||Yes||S$20,000||S$300 Per Person||–|