Insurance for Youths

[streamofmight]

Hi all, I tried to look for a thread like this but doesn't seem to be one, so I thought I would start one and hopefully be a guide for other youths.

So I'm 24 currently, hitting 25 in 2015. Male, non-smoker. Family no history of illness like cancer, etc. Gonna graduate soon and I think that it is a time to buy insurance. The thing is I don't know which one to get. Which company? Do I get life, personal accident and term? Or is that too excessive? I'm also more up for those insurance where I get my money back in a 10, 20 years and I understand that you have to pay more for that. Also, how much do I have to pay each month?

Thanks for reading.

Am reading the Best Term Insurance thread, and I'm quite confused by the content there, so some explain like I'm 5 would be great!

 

[NiteX2]

Hi all, I tried to look for a thread like this but doesn't seem to be one, so I thought I would start one and hopefully be a guide for other youths.

So I'm 24 currently, hitting 25 in 2015. Male, non-smoker. Family no history of illness like cancer, etc. Gonna graduate soon and I think that it is a time to buy insurance. The thing is I don't know which one to get. Which company? Do I get life, personal accident and term? Or is that too excessive? I'm also more up for those insurance where I get my money back in a 10, 20 years and I understand that you have to pay more for that. Also, how much do I have to pay each month?

Thanks for reading.

Am reading the Best Term Insurance thread, and I'm quite confused by the content there, so some explain like I'm 5 would be great!

Hi,

Welcome to working life soon =)
It's good to see that you are taking charge of your finances early on in life.

First things first, the most important coverage a person should get is an integrated shield plan to cover against medical expenses. Term insurance or wholelife plans both have their merits, which one you choose will depend on your preferences after you learn the differences between the 2. Personal accident plans are generally cheap, and one just needs to get the most basic coverage if needed.

Lastly, if you would like, we can meet up over a cup of coffee sometime next week to explain more about each category to you so you will have a clearer idea of what you should do when you do start working. Feel free to PM me if you wish to do so. Have a good day =)

 

[AhPek_Lion]

Hi Im glad u came to hwz to do ur research before signing up for insurance plans.

First priority is getting yourself covered under the "Private medishield plan"; which is a hospitalisation plan. Premiums are paid yearly and deducted from your medisave (cpf).

After that, you should focus on coverage for death, total permanent disability and critical illness. For young individuals who jus started working, try not to commit to a plan with money back as lapsing payment will mean you lose alot of money. Get term plan (no money back), just pure coverage.

Forget about investments for the start...build up your emergency funds in ur bank to 20k or so. And rmb never never never sign for investment linked plans (ilp)

 

[yusoffb01]

Why do insurance agents make lots of money

 

[streamofmight]

thanks all for the replies and pms so far. most of my current savings are in stocks and bonds.

@ahpek_lion you mean it is better, money wise, to sign up for no money bank insurance compared to money back ones?

also, anyone has any insurance agent to recommend? got so many here dno which to choose. like the Shiny Things equivalent of an insurance agent on this forum.

 

[mr suave]

Hi all, I tried to look for a thread like this but doesn't seem to be one, so I thought I would start one and hopefully be a guide for other youths.

So I'm 24 currently, hitting 25 in 2015. Male, non-smoker. Family no history of illness like cancer, etc. Gonna graduate soon and I think that it is a time to buy insurance. The thing is I don't know which one to get. Which company? Do I get life, personal accident and term? Or is that too excessive? I'm also more up for those insurance where I get my money back in a 10, 20 years and I understand that you have to pay more for that. Also, how much do I have to pay each month?

Thanks for reading.

Am reading the Best Term Insurance thread, and I'm quite confused by the content there, so some explain like I'm 5 would be great!

1) Integrated shield plan
2) Term/life plan

 

[AhPek_Lion]

thanks all for the replies and pms so far. most of my current savings are in stocks and bonds.

@ahpek_lion you mean it is better, money wise, to sign up for no money bank insurance compared to money back ones?

also, anyone has any insurance agent to recommend? got so many here dno which to choose. like the Shiny Things equivalent of an insurance agent on this forum.

Yes i would recommend no money back term over life insurance (with money back).

Perhaps i provide u with an example
Term 100k with accelerated ci cost $390/yr if covered till 75yr old. For a similar coverage, a limited pay life insurance cost about $1000/yr paid over 15yrs.

The surplus that u are actually paying consist of an investment component and the returns of most life plans are around 3% (irr) at 55th policy year. With that money in stocks and compounded, u can achieve much better returns

Firstly, by signing life plans, u lose liquidity... Ur money is locked up for a long long time before smelling that 3%. Secondly, the cramping of premiums in the first 15yrs mean that u are paying a much higher premium then spreading it over say 40yrs (time value of money n inflation).

The only time i would recommend buying life insurance is when premium between term and life plan are almost similar (Eg early critical cover)

Watch this vid which difference between term and life

http://m.youtube.com/watch?v=ETue4ZQrN8A

 

[Shiny Things]

So I'm 24 currently, hitting 25 in 2015. Male, non-smoker. Family no history of illness like cancer, etc. Gonna graduate soon and I think that it is a time to buy insurance. The thing is I don't know which one to get. Which company? Do I get life, personal accident and term? Or is that too excessive?

If you're 24, you've got no dependents, and the only person you're supporting is yourself, then you don't need any of the above - the only thing you really need is a shield plan to cover your medical expenses in case you get hit by a bus or something. Once you have a kid or get married, then you can think about some term life coverage.

I'm also more up for those insurance where I get my money back in a 10, 20 years and I understand that you have to pay more for that.

No, don't do this. If you're getting your money back in 10 or 20 years, what you're doing is basically giving a cheap loan to the insurance company. That money would be better off in your bank account, or your share trading account, earning money for you instead of for the insurance guys.

Also, how much do I have to pay each month?

That depends completely on how much insurance you buy, which company you buy it from, what that insurance covers, and how much the salesman decides to rip out of you. It's not the sort of question you can answer easily.

 

[streamofmight]

wa, Shiny Things sensei is even giving advice on insurance! thanks thanks.

If I'm not wrong, isnt the premium that I pay per month lower if I start buying early? If I start to buy PA or life insurance when I have a wife and kids, won't the premium be much more expensive?

And once again, any one can recommend a good insurance agent on this forum?

 

[AhPek_Lion]

wa, Shiny Things sensei is even giving advice on insurance! thanks thanks.

If I'm not wrong, isnt the premium that I pay per month lower if I start buying early? If I start to buy PA or life insurance when I have a wife and kids, won't the premium be much more expensive?

And once again, any one can recommend a good insurance agent on this forum?

Yes you are right to say that premiums are cheaper at a younger age but so is your spending power. Im not an agent but i believe most agents here are good agents

 

[ceecookie]

Get a term life insurance now. Although technically it is mainly for protecting your new family(wife + kids), do note that the premiums are much cheaper when you buy it at a young age. So personally i recommend getting one now in advance.

IIRC its abt 50+ for 20 y.o for 200k sum insured by NTUC Income, so urs should be a bit more only

 

[joasky]

wa, Shiny Things sensei is even giving advice on insurance! thanks thanks.

If I'm not wrong, isnt the premium that I pay per month lower if I start buying early? If I start to buy PA or life insurance when I have a wife and kids, won't the premium be much more expensive?

And once again, any one can recommend good insurance agent on this forum?

You are right that premiums are more expensive for life insurance as you age but do note that PA policy (in general) premiums are actually the same irregardless of age since the main purpose of this plan is of accidental nature and the probability of occuring to anyone is measured to be the same.

Aside from higher premiums that you have to pay as you age, it is good to consider the issue of unpredictability of our health status. We may be able to control our diets and manage our health through exercise regime but the cold harsh truth is that, health conditions are unpredictable. Should our health detoriates, this will have an impact on underwriting and may thus affect your coverage terms in future.

 

[Senpai]

Premiums are going to be pretty decent at your age. So it will be wise to do up a holistic planning for yourself now.

I will be unable to advise in specific details as i do not know your needs but here is a rough guide based on my experience:

Hospitalization insurance, as mentioned by many here is important. Do take that as a priority. Learn about the deductible and co-insurance and whether you will want to take up riders to cover 100% of hospital bills.

Personal accident insurance, go for one that provides decent medical reimbursement. This is usually by one of the general insurers.

Death/TPD/CI, basically to provide income replacement and a lump sum for dependents, is a tricky bit and requires deeper analysis of your needs to be a viable solution for you. Do check that TPD is paid in lump sum and not in stages. Do check whether CI is additional or accelerated. If you're looking for your premiums to break even with cash value, the typical ILP break even period is 15-20 years and traditional policies break even period is 20-25 years.

I hope the above helps. Feel free to pm me for clarifications.

 

[Shiny Things]

If I'm not wrong, isnt the premium that I pay per month lower if I start buying early? If I start to buy PA or life insurance when I have a wife and kids, won't the premium be much more expensive?

That's because if you buy insurance earlier, the early years subsidise the later years. So on the one hand, your premiums will go up if you don't buy it straight away; but on the other hand, you won't spend five or ten or twenty years paying for insurance you don't need.

The answer is "don't buy it until you need it". The whole "oh the price will go up if you don't buy it now" thing is High-Pressure Sales Tactics 101.

 

[sgdividends]

Hi all, I tried to look for a thread like this but doesn't seem to be one, so I thought I would start one and hopefully be a guide for other youths.

So I'm 24 currently, hitting 25 in 2015. Male, non-smoker. Family no history of illness like cancer, etc. Gonna graduate soon and I think that it is a time to buy insurance. The thing is I don't know which one to get. Which company? Do I get life, personal accident and term? Or is that too excessive? I'm also more up for those insurance where I get my money back in a 10, 20 years and I understand that you have to pay more for that. Also, how much do I have to pay each month?

Thanks for reading.

Am reading the Best Term Insurance thread, and I'm quite confused by the content there, so some explain like I'm 5 would be great!

A Term plan is good for death,TPD and critical illness till age 65. After 65 ,usually dependents would be working and you should have saved or invested enough money to cover yourself. The money saved due to buying term plan should be invested according to what is suggested by Shiny, in his tHread.

A shield plan though is VITAL and cannot be compromised. Get it immediately.


It's good to get a term plan NOW even if u are young and unlikely to use it because of the concept of preexisting illness. Whats u get preexisting illness, insurers won't cover u later when u start having dependents.

Just remember: No ILP like Zurich, Friends Provodent,

Whole Life insurance depends on your character generally speaking if you do not have discipline to save and invest, then this could be for u. If you have the discipline, term is better as its cheaper and the money invested would be better than the returns from whole life.. ( pvery high probability)

 

[Lewis.T]

That's because if you buy insurance earlier, the early years subsidise the later years. So on the one hand, your premiums will go up if you don't buy it straight away; but on the other hand, you won't spend five or ten or twenty years paying for insurance you don't need.

The answer is "don't buy it until you need it". The whole "oh the price will go up if you don't buy it now" thing is High-Pressure Sales Tactics 101.

I have to disagree on this part, you're not just avoiding the higher premiums later, you're 'locking-in' your insurability. If budget is really a concern and you can't set aside under $500/year for 500k coverage for the next 30 years then don't take up any life protection. Just go with your integrated shield plan.

However, cases like this do happen, and she happens to be part of a vocal minority.

http://forums.hardwarezone.com.sg/m...roducts-someone-existing-illness-4875052.html

Now she is hard pressed to get insurance for herself, and probably can only continue what was already existing.

 

[streamofmight]

Thank you all for your help so far!

From what everyone has said, a shield plan is a must now. Just to clarify, is shield plan and hospitalization plan the same?

I think I should get personal accident insurance also, you never know when **** will fall on you.

As for life insurance, I am a bit unsure. Sure I may be paying a low fee now and also paying for something that I do not likely need, but if I am suddenly diagnosed with something my premium will spike, so a balance is needed there.

 

[AhPek_Lion]

Thank you all for your help so far!

From what everyone has said, a shield plan is a must now. Just to clarify, is shield plan and hospitalization plan the same?

I think I should get personal accident insurance also, you never know when **** will fall on you.

As for life insurance, I am a bit unsure. Sure I may be paying a low fee now and also paying for something that I do not likely need, but if I am suddenly diagnosed with something my premium will spike, so a balance is needed there.

Shield is same as hospital plan. Pa plan just get the cheapest

 

[Relia_tan]

Glad that Lewis.T brought up this point .

Frequently people focus heavily on the monetary factor and do not consider insurability. There are individuals out there who are more than willing to pay higher fees just to get a holistic coverage (without exclusions) as they have not done so when having the privilege of awesome health.

I have to disagree on this part, you're not just avoiding the higher premiums later, you're 'locking-in' your insurability. If budget is really a concern and you can't set aside under $500/year for 500k coverage for the next 30 years then don't take up any life protection. Just go with your integrated shield plan.

However, cases like this do happen, and she happens to be part of a vocal minority.

http://forums.hardwarezone.com.sg/m...roducts-someone-existing-illness-4875052.html

Now she is hard pressed to get insurance for herself, and probably can only continue what was already existing.