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Old 29-12-2017, 12:40 PM   #14
BBCWatcher
Arch-Supremacy Member
 
Join Date: Jun 2010
Posts: 12,746
Assuming you view DII as I do (essential), here are some tips to avoid overspending/over-insuring:

1. Don't choose an elimination period (waiting period) any shorter than 90 days. This is the period of time after you experience a disability before the insurer will start paying benefits. You really should be able to self-insure -- to have adequate emergency reserve funds -- for at least 90 days. If you need to start off with a pre-benefit waiting period of 90 days (or 3 months) and then adjust the policy later on to increase to a 6 month waiting period, that works. (Two of the three DII insurers in Singapore allow you some flexibility in choosing the waiting period.)

2. Start off with a reasonable level of coverage. If your income is low or moderate, try to get the full 70% maximum if you can afford it. If you get a raise, particularly if it's unexpected, or if you change professions, it's good to review your coverage.

3. Be careful that you inform the insurance carrier when you're supposed to. For example, if you might be posted to another country, discuss that possibility with the insurer to make sure that they'll keep you insured -- or that you can find alternative coverage.

4. As you get closer to normal retirement age (age 65 typically), as your household expenses start to fall (kids out of university and starting their own careers, for example), and as you build up your own savings, you should be able to reduce your DII coverage. You might start with a reduction in the maximum monthly payout -- drop from $5,000/month to $4,000/month, for example. Then, as you fully emerge from the "danger zone," you could drop coverage altogether. That might be at age 58, or something along those lines.

5. You might decide to replace some of your DII with ElderShield (and ElderShield supplements) from age 40, although ElderShield has some key differences. Or you might not, again due to the important differences between DII and ElderShield.

6. Make sure you are both truthful and precise in describing your profession and job responsibilities, and look through the list of choices carefully with your DII agent. If you get the profession/job wrong, that could spike your premiums unnecessarily.

7. Sometimes the DII sellers have promotions, and AIA has their "Vitality" program with premium discounts. If you can take advantage of such discounts, great.

8. Make sure you get good quotations from all DII companies. Don't just get one quotation from your buddy's agent's favorite company.
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