If you are living or planning to move to Singapore, you may be wondering whether you need insurance. I get it, being in one of the safest countries in the world. Many people think that having insurance is simply a waste of money. But there is more to insurance than protecting your physical self. This article will discuss types of insurance in Singapore and help determine if it’s necessary for you.
You may not know this
Insurance is a big business in Singapore. In 2022, there were 216 insurance companies and it’s set to grow by another 7.2% by 2026. Being one of the richest nations in the world, storing, protecting, and generating wealth is what people here are looking out for.
Insurance covers property damage, theft, illness, disability, and death. Each policy has specific terms and conditions, and coverage varies based on the type of insurance and policy. Therefore, there are all kinds of insurance you can choose from.
Types of Insurance in Singapore
Here are the general types of insurance people in Singapore are looking out for:
Probably the first one that comes to mind most people when thinking about insurance is for health. The cost of healthcare is on the rise. Singapore’s projected growth in healthcare benefit costs in 2022 is in line with an overall growth trend in the Asia-Pacific, which is expected to rise by 7.6 percent in the same year.
The premium cost of health insurance varies based on individual age and health condition. A 45-year-old expat who works and lives in Singapore will typically pay 3,200 SGD (2,300 USD) annually for health insurance. Typically, a 25-year-old will pay 40% less, and after the age of 65, premiums start to skyrocket. The average bill size for public hospitals costs around $1,012 to $7,876 and the average hospital bill for surgical specialties ranges from $1,638 to $18,993. That’s why health insurance aims to cover medical expenses such as hospitalization, surgery, and other medical procedures.
In Singapore, the government mandates a minimum level of health insurance coverage called MediShield Life. It provides basic coverage for hospitalization and some outpatient treatments to ensure protection for all Singaporeans, regardless of their income. While it does cover the basic benefit of health insurance, it doesn’t fully cover the cost of healthcare. This is why individuals need the buy themselves health insurance.
You may never know when you may get into a serious health condition or into a fatal accident. If you are the breadwinner of the family, it can be a huge financial blow to your loved ones. That’s why most financial advisor highly recommends their client get a life or term insurance.
Life insurance provides financial protection for loved ones in the event of an untimely death. It offers a lump sum payment for expenses such as funeral costs, debts, and living expenses. Policies can be customized to fit individual needs, with term life covering a set period and whole life offering lifetime coverage and cash value.
It’s crucial for individuals with family responsibilities to have life insurance, as it ensures financial security and peace of mind. Policies require a medical exam and have age limitations, so early coverage is important. With the right policy, loved ones can be financially protected in the event of your passing.
Home insurance protects homeowners in Singapore from unexpected events that could cause property damage or loss. While Singapore may not have serious life-threatening natural disasters like earthquakes, tsunamis, or volcanic eruptions. Singapore is still prone to natural disasters like heavy rain, flooding, and landslides, which can harm homes and personal belongings.
Singapore’s home insurance companies usually provide coverage for a range of events, such as fire, water damage, theft, and natural disasters. Liability protection is typically included to cover injuries on the property. Policies may also pay for alternative living arrangements during repairs.
Obtaining home insurance in Singapore brings peace of mind and financial security. It assures homeowners that their property and belongings are safeguarded, and can help reduce the cost of repairs or replacements. Homeowners in Singapore are highly recommended to get home insurance coverage to protect their assets and ensure their financial stability.
Car insurance is designed to protect your vehicle against damage or loss and to provide coverage for injuries sustained by yourself or others in the event of an accident. In 2019, the fatality rate of a car accident in Singapore is 2.07 per 100,000 people, which means you have a 0.00207% chance of getting killed. Not a lot, but the number is still there.
In Singapore, car insurance policies are mandatory for all vehicle owners and must provide coverage for third-party liability.
Travel insurance policies vary in coverage and can be tailored to fit individual needs. Some policies provide coverage for trip cancellation or interruption, which can reimburse travelers for non-refundable expenses such as flights, hotel bookings, or tours that need to be canceled due to unforeseen circumstances such as illness or a natural disaster.
Other policies may include coverage for medical emergencies, which can cover the cost of medical treatment, hospitalization, or emergency evacuation while traveling. Additionally, some policies provide coverage for lost or stolen luggage, delayed or canceled flights, or even accidental death or dismemberment.
Travel insurance is highly recommended for anyone traveling abroad or domestically, especially if they are embarking on a costly or long trip. It provides an added layer of protection and can help alleviate the financial burden of unexpected expenses while traveling. Therefore, it is essential to carefully review and choose the right travel insurance policy that suits your needs and travel plans.
How to determine if you need insurance?
Am I too young to spend money on insurance? Should I commit myself yearly to paying for insurance? Do I really need to insure myself? Am I fully protected if I were to lose my job?
Whether or not you need insurance in Singapore depends on a number of factors, including your personal circumstances, the type of insurance you are considering, and the level of risk you are comfortable taking. Here are some factors to consider when deciding whether or not to purchase insurance:
Your financial situation
If you possess substantial savings or other assets that could cover any possible losses, insurance might not be necessary for you. However, if you do not have significant savings or other assets, insurance can provide important financial protection in the event of unexpected events.
Your level of risk tolerance
If you are comfortable taking on a high level of risk, you may not need to purchase insurance. However, if you are risk-averse and want to minimize the potential impact of unexpected events, insurance can provide important peace of mind.
Your specific circumstances
If you own a home, or a car, or travel frequently, you might have to buy specific types of insurance. Additionally, if you have dependents or other individuals who rely on your financial support. You may want to consider purchasing life insurance to provide for their future financial needs.
Who to Contact?
The financial industry has one of the highest turnover rates of 12~15%. It is no wonder there are some who are skeptical of newcomers in the industry to work. There is a saying to get a financial advisor who is around the same age group as you since they can understand you better.
I work with Benjamin Chong from HSBC LIFE(click to view his Instagram page). At 25 years old, he now has over 100 clients under his management and is one of the rising stars in the company.
Like many others, I was skeptical when it comes insurance until I actually got into an accident. [Picture below!]
Yeah, it’s pretty bad. I broke my leg and had 3 months of hospital leave
Luckily, I had both accident and health insurance that covered the cost and also provided compensation for the time I was unable to work due to my injury.
This is beneficial as it provides financial security during a difficult time and ensures that the individual can focus on their recovery without worrying about the financial burden of their medical expenses or loss of income.
No one wants to be sick or injured. It always happens by accident and we need to be prepared for it. Like what doctors always like to inform their patients:
Prevention is better than cure
We buy insurance to protect ourselves from the unexpected. If you have loved ones or things you hold dear, having insurance can not only protect yourself but also your loved ones.