The vow of “for better or worse…for richer or for poorer” entails an important promise to live in a financially able home. Managing your money on your own can be challenging enough so adding your spouse’s finances may be overwhelming at times. With that in mind, here are 7 Insurance Tips for Newlyweds…
1. DISCUSS YOUR FINANCES AND SET YOUR GOALS
Discuss your finances with your new spouse as soon and as open as possible. You will need to communicate about your bank accounts and about your debts. Set up goals together in order to see which insurance suits your intentions.
2. LOCATION IS EVERYTHING
Housing insurance often pays for destruction, damage, and theft of your possessions. In the event of fire, your insurance will help pay to repair and replace your expensive belongings. Homes close to fire hydrants and fire stations cost less to insure. This is why location of your house is important.
3. TRY THE LUCKY SEVEN
If you are wondering how much life insurance coverage you need, then seek the experts help. Some experts suggest multiplying your annual income by seven so that your spouse is covered for at least 5 to 10 years.
4. CONTINUE DRIVING RED CARS
It is a myth that car insurance companies charge more for red cars. Higher charges come from the age of the client, client’s claims history, and age and model of the car.
5. CONSIDER FLOOD INSURANCE
Housing insurance cover damage caused by pipe overflows but, natural disaster flood are covered by flood insurance. Findings suggest that almost 25% of flood insurance claims are made from low-risk areas, so consider this policy.
6. HOME IS YOUR BIGGEST INVESTMENT
Your home is your biggest investment because unlike cars that depreciate its value the minute you drive them, your house increases its value over time. Houses that are less than 10 years old or those that are renovated within the last 10 years cost less to insure. What’s more? If the house is made of fire-resistant materials such as brick, you can save even more money.
7. BE FIT TO SAVE MORE
Live a healthy lifestyle that includes regular exercise and a balanced diet. Hop on the scale to see if your body weight is the ideal BMI for your age. This is because life insurance companies charge more for people who are overweight since they develop more health problems as time passes. So, stepping on the gym will not only give you a sexy body but it will also help you save more insurance money.
Life insurance is an important tool for an individual’s financial plan. Because you don’t have a crystal ball to predict what will happen to you tomorrow and the day after, you need to transfer this risk to a life insurance company – by paying a premium.
Fortunately, you don’t need any divination to find out how much life insurance cover you need. Since this article is penned in the year 2015, i have reasons to believe you belong to the Gen Y’s population and is knowledgeable enough to work out your own insurance needs by following the steps below. That is also the reason why very soon you will be able to purchase life insurance cover directly from the company without the need of financial planners. (If you belong to the Gen X’s, i don’t see why you need any life insurance besides your Medishield or Medishield Life)
Working out how much you need is no rocket science. It’s as easy as sitting down with a calculator on your hand and asking yourself a few questions.
1. Do i have any dependants?
This should be the first question you ask when you buy life insurance. You want to provide for your loved ones should something untoward happen to you.
Let’s assume Michael has a wife and a 3 years old son that he need to take care of. He is also providing allowance to his aged parents who have retired and not working.
2. How much do they need?
Finding out how much your dependants need is important to determine how much life insurance cover you should be looking at.
Now Michael contributes $2,000 a month to household expenses which include paying for the bills, foods, daily necessities and children expenses. His wife is also working and contribute the other half of the household expenses amounting to $2,000 a month.
If something unfortunate happens to Michael tomorrow, his wife would have to shoulder the responsibility of paying for Michael’s share and may not have enough to cover a monthly household expenses of $4,000 a month.
So Michael wants to protect his share of liability.
He needs to provide for 20 years of household expenses until his son graduates from university and starts working.
He will need to cover himself sufficiently such that the large sum of money paid out can be invested to generate a passive income of $24,000 a year. Let’s assume a modest 4% rate of return, Michael simply divide $24,000 over 4% to work out $600,000. That is the cover he needs to provide a passive income of $24,000 a year for his family.
Once they no longer need this passive income, the bulk of this money could be used to purchase a home for Michael’s son.
3. What about mortgage, other loans or even children’s tertiary education?
For mortgage you would have taken up a mortgage decreasing term assurance to take care of that.
if you look into loans and children tertiary education, you could have factor those into your monthly expenses. That is also to say i am assuming you would have set away a portion of your monthly salary into a portfolio that gives at least 8% of growth to your children education fund.
4. Does that means i don’t need any insurance cover if i have no dependent?
You would hope so. But you might want to look into replacing your income should you become disabled or get critically ill. That is when you should consider getting yourself covered for total permanent and disability until the age you retire.
As for critical illness, a simple rule of a thumb is to cover for 5 years of your income because of the prognosis of cancer (or the survival rate of cancer, being the most common critical illness in Singapore) You can basically go without income for 5 years since you will be focused on recuperating and going for chemotherapy and other cancer treatments.
For hospital cover, don’t forget you have your Medishield or Medishield Life to take care of them.
What’s next?
We should be expecting a web aggregator to be rolled out in the first quarter of 2015. Now that you know how much you need to get yourself covered, most consumers can actually skipped the middleman to pay a lower premium and make use of web aggregator to find the most suitable product at the most affordable price.
Do you know the feeling when walking from the closest MRT station towards your house and it simply takes forever? Driving around the island of Singapore is a true pleasure. One hardly ever encounters a traffic jam and generally gets quickly to any desired place. There isn’t any problem with pollution or a high car density. However, driving and owning a car in Singapore can be a costly undertaking. It is not only the car and its license that is expensive, but also the car insurance can weigh heavy on one’s finances. No matter how much money one has – there isn’t any chance that one can lower the government-imposed charges for the usage of the car. Therefore, it is even more important that one finds a beneficial deal for the car insurance.
The first trick to safe money is the oldest one in the book – drive safely. However, many people are not aware of the system that car insurances around the world use. If one has a car accident, the rate one has to pay monthly or yearly is instantly increased. If you are driving safely around Singapore over a long period of time, your car insurance will remain the same or even shrink slightly. Those people, who tend to crash their car, will not only pay for the reparation, but also for the continuously increasing car insurance. Many car insurances offer a no-claim discount (NCD). This allows for a 10% discount for every year in which you haven’t claimed anything. If you for example have only a minor dent in the car, you may want to consider not claiming it from your insurance, as you can possibly save more with the discount. The NCD can reach a maximum discount of 50%, with which one can safe potentially thousands of hard-earned dollars.
Not only being a safe driver, but also being a law-obeying driver can help you with the insurance. Fancy and fast cars are extremely attractive in Singapore, but even if you have one of those racecars, you are still subject to the speed limits. If you have a clean license over an extended period of time, you can earn a further discount instead of another ticket. After three years driving without committing a traffic offence, you can get the Certificate of Merit (COM), which brings you a further 5% discount on top of NCD. Using all this saved money, one can buy a ticket for the Formula 1 Race in September and enjoy proper racing.
When you are arranging a new car insurance policy, then pay attention to what you actually commit. Many policies often include unnecessary points. Go through them and use your commonsense. It can be that your car insurance also covers you for something that you are already covered for. A personal injury policy within your car insurance is very good, but a total waste of money if your health insurance already takes care of you in the case of an accident. Being covered twice for the same cause will not bring you double money and doesn’t mean you can claim it twice. Furthermore, one should check exactly what policy covers what points. When renting a car, one might be already covered in the case of an accident through another insurance. Different policies might have different names, but cover actually the very same thing. A rental-car insurance might include the same points as a collision policy. Therefore, it is very important, if one wants to save money, to double check the covered points in a insurance. Furthermore, one should eliminate all unnecessary points.
Car and accident statistics aren’t the best friends of young drivers. Unfortunately, an inexperienced young driver has the tendency to crash a car more often than older and more experienced drivers. This results in a higher insurance policy for younger drivers in general. Even if you are driving perfectly, you are paying more by default. Therefore, it is advisable to let your experience on the road be reflected in your policy. If you have been driving for more than ten years without any accident, then you should make a point of it in your new insurance. Not everybody has the possibility to do so, but there is another trick. One can for example insure the car on another person or include a driver with more experience into the policy. Mixing a high risk and a low risk profile will in most cases reduce the insurance. Therefore, one should check who is a low risk profile. Statistically older or female drivers will fall in this category. Listing such as the main driver in one’s car insurance policy, can save some money.
Each car is categorized with a certain amount of insurance money that the owner has to pay. It is generally known that the bigger the engine of the car, the higher is this amount. The reasoning of the car insurance companies is the higher risk. Statistically cars with a higher engine are more likely to crash. For obvious reasons insurances are all about statistics. So if you can beat the statistic, you will save some money. Most people will not modify their car, however there are car enthusiasts that do. A simple engine tweak or any other car modification can quickly become very expensive. What seems like a body shop bargain, can become a killer within the insurance policy. Therefore, it is worthwhile to check with your car insurance whether an upgrade is necessary.
Of course one could say that the insurance company doesn’t have to know. This is however an extremely risky undertaking. In case you do have an accident with your modified car and you haven’t notified your insurance about it, you can loose your cover immediately. Even if you haven’t caused the accident, the insurance company can refuse to pay anything. Hence, one shouldn’t modify outside the regulations of the Land Transport Authority (LTA) and definitely not keep it a secret. Handling your car insurance correctly doesn’t take too long and can award you with some extra cash.
“Do you want travel insurance?”, a sentence has become so common that it is now included in the menu of tour packages and online travel booking. While some of us may be guilty of travelling without getting covered, travel insurance has now evolved into a need rather than a want.
Ask yourself these questions:
Who will evacuate you when you are injured on top of Mount Fuji?
Who will bear the cost of cancelled air tickets or tour package during the protests in Hong Kong? A flood in Australia? Or if you and your travel companion is hospitalized days before your travel?
Who will be the one you call when you are terribly ill in Europe? Or when your rented car has crashed into a monumental sculpture?
Who will cover the cost of your essentials when you lost your baggage or your travel documents?
The list can go on but instead of trying to spoil your holiday planning, we have come up with a guide for you to compare travel insurance plans in Singapore.
We had compiled the data across different insurance companies so that you can have an idea of which offer the best cover for each risks you identified as well as getting the cheapest travel insurance in Singapore.
Let us first examine a few common benefits that you should be looking at when purchasing a travel insurance.
Medical treatment and emergency evacuation
(Image credit: Phalinn Ooi, via Flickr)
Sure, you can be as healthy as a horse but you can’t avoid getting hit by someone skiing down the mountain or prevent a dengue mosquito that wants to sting you. Shit happens, and that could cost you ten or thousands of dollars when you are overseas. It is not too bad if there is a hospital nearby but what if you are trekking on the remotest part of the island? Emergency medical evacuation could easily set you back between $75,000 – $300,000.
You don’t want me to add the medical expenses, do you?
From our list, Singapore Airline Travel Guard offers the best cover for medical and accidental dental expenses when you are overseas. You can claim unlimited benefits from their International plan underwritten by AIG. For emergency evacuation and repatriation, there are many companies that offer unlimited cover, including AIG’s own flagship Travel Guard plans. The word ‘unlimited’ is equivalent to a peace of mind that is important to all travelers, including myself.
Accidental death and permanent disability
(Image credit: Dominik Golenia, via Flickr)
Should the most unfortunate event that results in death and permanent disability, there is an additional payout to you and your family members. Aviva offers the highest coverage of up to $2million to protect you and you family from the liability of you suffering from permanently incapacitatation or premature death.
Hospital income
(Image credit: aenri05, via Flickr)
Whether you are hospitalized overseas or in Singapore, it may take weeks or months for you to recuperate. If you are still employed, you may end up having to take no-pay leaves and this could come in handy when you receive a daily income for your stay in hospital. It makes sense when you still have you bills and mortgage to pay and a parents to support. DBS TravellerShield and Allianz Gold plan has the best overseas hospital income benefits with the highest limit of $50,000, with the latter paying you $250 a day. (vs $200 a day from DBS)
However, if you are hospitalized in Singapore, a plan from UOB, Maybank’s TravelCare (Suite) and Etiqa’s Vacation Shield Plus (Suite) make more sense as they have the highest limit of $10,000.
So which should you choose?
Besides comparing the premium amounts, take the destination you will be travelling to into consideration and if it is located far away from Singapore. That is to say if you are travelling to Europe or the US where it may be difficult to transport you back to Singapore for local treatment, then overseas hospital income should be your priority. Whereas if you are travelling to a country in South East Asia, you should be looking at a higher hospital income limit in Singapore.
Travel cancellation, curtailment and disruption
(Image credit: Ross G. Strachan, via Flickr)
When you have spend thousands of dollars booking your tour package or air tickets months in advance, you may well want to get this covered. Some airlines offer a non-refundable air tickets and should you have a last minute cancellation due to serious illness, riots or flash flood, your month-worth of paycheck would be down in the drain.
Allianz Gold plan beat all other plans hands down as it tops the list of benefits with a $25,000 limit for travel cancellation, postponement, curtailment and interruption.
Delay or loss of personal baggage
(Image credit: donuzz, via Flickr)
Most people buy travel insurance to protect their baggage and belongings as it seems to be the most common mishap that could happen on a trip. Again, Allianz has outshone the rest with a $15,000 cover on personal baggage and a $10,000 cover on travel documents. However for baggage and travel delays, Etiqa Vacation Shield Plus Suite is a better option with a $5,000 limit.
Other benefits such as golf benefits, home cover, car rental excess and more
If you are planning to go on a green trip, golf benefits may be more attractive as you are covered from things such as loss or damage to your golf equipment to getting an incentive for getting a hole-in-one. With up to $3,000 cover limit for your golf equipments, golf junkies look no further to HSBC Comprehensive and AXA SmartTraveller plans. If you on your way to become Tiger Woods, Ace Ultimate plan will offer the highest bounty for a hole-in-one, currently at $750.
Insurance companies has gotten more creative over the years. From offering you cash incentive such as a hole-in-one, you can get covered at almost anything you can think of such as reimbursement for pet medical care to protecting your home from any damages. Besides taking into account of the benefits offered by insurers, you should also compare the premiums to make sure you get the most value for the cover.
Read the fine prints of the policy as some insurers define each benefits differently. For example, some insurer requires you to seek medical advice or treatment when you are overseas to be eligible to claim for your medical expenses incurred in Singapore, while some allow you to claim if you seek medical advice within 48 hours of returning to Singapore.
In short, some of the most common benefits are highlighted below:
Benefits
Recommended plans
Overseas Medical Expenses
Singapore Airline Travel Guard (International)
Medical Expenses in Singapore
SCB Enhanced Travel Protector Platinum
Overseas Hospital Income
Allianz Single Trip Gold, DBS Platinum Plan
Hospital Income in Singapore
UOB Individual, Maybank TravelCare Plus (Suite), Etiqa Vacation Shield Plus Suite
Emergency Medical Evacuation/Repatriation
AIG Travel Guard Superior/Premier, Ace Essential/Supreme/Ultimate, HSBC Essential/Comprehensive, Allianz Single Trip Silver/Gold, Tenet Sompo Travel Joy Deluxe, AXA SmartTraveller Essential/Comprehensive
Pre-existing medical conditions
NTUC Enhanced PreX
Child education grant, family assistance
MSIG Premier
Accidental Death & Permanent Disability
Aviva Travel Plus
Travel cancellation, postponement, etc
Allianz Single Trip Gold
Travel baggage delay, overbooking and misconnection
Etiqa Vacation Shield Plus Suite
Golf benefits
HSBC Comprehensive, AXA SmartTraveller Comprehensive
Visit our Travel Insurance Guide for a full list of benefits and the respective premiums of each insurers.
In the next fifteen years, 20% of the population in Singapore will be aged 65 and above. That figure is astonishing when you put this into perspective: there will only be 2 citizens in the working age band (aged 20-64) for each elderly citizen.
Singapore is not too far away from Japan as one of the fastest ageing population in Asia. With low fertility rate and later marriages, Singapore faces the challenge of a declining working population and stagnant economy.
With the increase in the number of elderly to 900,000 in 2030, healthcare and long-term costs are expected to rise alongside.
The concern of whether our 3M (Medishield, Medisave and Medifund) healthcare system is adequate to address the impact of a silver tsunami should be reviewed.
Besides the 3M approach to healthcare, what about the costs of long-term care (LTC) after being discharged from hospital? LTC refers to those with chronic medical conditions that has rendered them severely disabled to the extent of not being able to perform 3 out of the 6 activities of daily living which include washing, dressing, toileting, transferring, feeding and mobility.
The Eldershield scheme is designed to provide financial protection for long term care which seeks to provide a cash payout of $300 or $400 per month for a period of 5 to 6 years.
The question is if that amount is sufficient? Let’s take a look.
Inpatient care:
Community Hospital
You may be discharged from the hospital but that doesn’t mean you have fully recovered. You will need additional inpatient care such as therapy and rehabilitation, nursing care and the need of caregiver to provide help with daily living. The estimated cost is around $8,000 – $9,000 a month. There are government subsidies between $1,800 to $7,000 a month which you can apply for.
Nursing Home
These are for patients who cannot take care of themselves in their own home and need significant assistance. It costs around $1,200 – $3,500 a month. You can tap into government subsidies and Medifund for selected homes only.
Respite
Those that require temporary help can apply for respite care costing around $100-$150 a day.
Inpatient hospice care
Patients who suffered from serious and progressive diseases may need extra attention from a highly trained medical team.
It costs around $7,000 a month payable via Medisave.
Day centres:
Day rehabilitation centre
Suitable for patients who need therapy to regain the ability to perform daily tasks. Estimated cost: $700-$1,000
Dementia day care centre
Estimated cost: $700-$850
Hospice day care centre
Patient with cancer and life limiting disease. Estimated cost $700-$850
Care services at home:
Home medical service:
For those with mobility issues, home medical service is an option and cost around $130-$200 per visit
Home nursing:
Suitable for bedridden patients. Estimated cost: $80 per visit
Home therapy:
Estimated cost: $100-$150 per visit
Home help:
Patient who live alone and can’t leave their home will need some assistance which cost around $100-$150 per visit
Hospice medical/nursing home care:
Suitable for cancer patients. Estimated cost: $150-$220 per visit
Cost of informal family care
In a study by NUS, 80% of informal care for the elderly was provided by family member. That is to say, elderly who can’t afford to look after themselves financially will need assistance from their loved ones. These duties usually have a negative impact on the caregiver with majority of them having to make work accommodations, take leave of absence or to turn down a promotion.
It also changes the family dynamic of the caregiver as they have less time for their own family which can strain the relationship between spouse and children.
Ways to pay for it
Fortunately our government values our Pioneer Generation and has various schemes in place to help shoulder the burden of long term care cost. Here are some options:
Medisave: Medisave can be used to pay for the expenses at approved community hospitals, hospices, day rehabilitation centre.
Medifund Silver: Forms a safety net and to be used as last resort for elderly who can’t afford basic healthcare. It has been extended to include non-residential intermediate and long term care (ILTC) services.
Eldershield: Cash payout of $300-$400 a month to help defray living costs
Personal Savings: You may have to tap into personal savings should your long term care cost exceed the total benefits you can claim
Foreign Domestic Worker (FDW) Grant & Levy: A monthly grant of $120 to support families who hire a foreign domestic worker
Senior Mobility and Enabling Fund (SMF): Subsidies for assistive devices, specialised transport and consumables
Enhancement for Active Seniors (EASE): Home modifications to make it more conducive and safe for them
Pioneer Generation Disability Assistance Scheme: PioneerDAS provides $1,200 a year to help pioneer with their care need
Interim Disability Assistance Program for the Elderly (IDAPE): Provide $150 or $250 a month for a maximum of 72 months for those who are not eligible for Eldershield due to age or pre-existing condition
Subsidy for intermediate & long-term care (ILTC): Eligible patients can claim for subsidies through mean-testing and depends on the per capita monthly household income
Anna Agoncillo
MoneyDigest
