Thursday, June 11, 2015

How Much Insurance Coverage Do You Think It's Enough?

Many people tell me that, aiya. I'm still young and healthy, no need to buy insurance now,  or, okay la I have enough savings for my rainy days. Unfortunately, things don't always go as planned. Too many Singaporeans don’t have enough insurance coverage for one simple reason – they don’t know how much and what insurance they need in the first place!

Being underinsured, while better than being uninsured, is still a risky situation that can hurt you financially in the event of an unfortunate mishap. Young Singaporeans especially in their 20s and 30s are particularly vulnerable to being underinsured – which is dangerous because these are the years when you should be buying enough insurance to protect your future wealth!

So How Much Insurance Do I Need?

To find out how much insurance every young Singaporean needs, here's a simple way to calculate:

Take your annual salary times 10 to 15 times. This will be a pretty good rule of thumb.

For a more detailed calculation, it’s always better to contact a financial consultant to calculate your financials, as each and every one situation is different.
Conclusion – You Need at Least $500,000 Insurance Coverage to Last You 10 Years!
That insurance coverage number is in line with what the amount of insurance recommended by the Life Insurance Association (LIA) Singapore for the average working adult in an average household – which is $490,000.
So before you decide to choose the cheapest policy available or worse, skip out on insurance entirely because you think putting all of your money into savings or investments is better – just remember that all it only takes ONE accident to wipe out your savings.

Don’t take the risk of assuming nothing will ever happen to you – purchase an insurance policy so that the financial risk is transferred to your insurer!
Do you have enough insurance coverage? Share your thoughts with me on Facebook or WhatsApp me at +65 9151 9924!

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