Insurance

**WARNING**

Today's information in this post is strictly my thoughts and comments on today's topic. DO NOT use whatever information here as advice to further your financial portfolio. Please consult a proper Financial Consultant at your disposal to thoroughly discuss your financial goals.

Away we go~

I was once a Financial Consultant; I no longer hold the license anymore. Still, I am an advocate for Insurance as this is some form of safety net for both you and your family, should anything happen to the breadwinner of the house. I know it works, because I am a very good example of it. Some shit happened to my family, in which I might discuss about it in another post, but the insurance payout helped alot, and it made sure I could stand on my own two-feet for a certain amount of time. Today we shall discuss about the different types of insurance you can find.

First, a wake-up call:

Correct me if I'm wrong, everyone wishes to die peacefully in their sleep. NEWSFLASH! At least half of the population will not. Somehow or rather, we may unexpectedly die in accidents or injuries. What is worse: we die slowly, suffering from diesases. If not, we may be in the hospital, put under observation for certain reasons.

The no.1 killer disease in humans is cardiovascular diseases, which includes the heart and lung. Next, is cancer - prostate for the men, and breast for the women. This could be hereditary, or it could be developed within oneself.

Long story short: all of us will die one day, regardless the cause. The question is: how do we ensure our future generations are taken care of financially?

The Different Types of Insurance Plans

In an ideal portfolio, it is best to have all of the following covered. Even if one cannot afford to cover all at one go, it is good to slowly build up to cover every aspect of your portfolio.

Hospitalization (Intergrated Shield Plans)
The most basic of all Insurance. Basically, the costs that you have incurred at your stay in your hospital, the Insurance Company will pay a good chunk of it. I do not really know how it works in other countries, but for Singapore, one has to pay the "Deductible" and "Co-Payment". The "Co-Payment" kicks in, after he/she pays the "Deductible".

This should be the very first plan that you purchase, especially after you start working, as you can use your Medisave (CPF) to pay for it.

For example:
Your hospital bill: $100,000
Deductible: $3,500
Balance: $96,500
Co-Payment (10% of Balance): $9,650
You pay: $9,650 + $3,500 = $13,150
Insurance Company pays: $86,850

Depending on the Insurance companies, there is a "Rider" you can use to tag onto your Hospitalization plan, which could reduce co-payment down to a minimum of 5%, subjected to government regulations.

Whole-Life / Term-Life Plans
These are insurance plans that covers you for your life. There is a difference between Whole-Life and Term. 

After starting your career as a young-adult, this, in my opinion, should be the second plan to get for your portfolio (better if you can purchase it together with your Hospitalization plan), as the older you get, the more expensive the premium becomes, because you are more susceptible to death, as the law of nature states.

Whole-Life: covers you for whole of life, especially after paying all your premiums. You can purchase an X amount of "Sum Assured". Do note that the higher the "Sum Assured", the more expensive the premium is. There is an option to surrender your Whole-Life Plan, in which you receive a lump-sum payout. However, it is INADVISBLE to do so. Never use your Whole-Life plan as in investment tool, it is just not worth it.

Term-Life Plans: Think of it as renting a car, the moment you do not need it, you can cancel it. However, there is no option to surrender this plan to get a lump-sum payout, which makes this sort of plans a whole lot affordable compared to Whole-Life plans.

Critical Illness Plans
Remember my NEWSFLASH from earlier? Again, no one is immune to diseases. For these plans, you will receive a payout should you ever (touch-wood!) contract a disease. This payout helps to cover the cost for treatment or income lost. These plans terminates itself once the payout has been given. So, if you receive the payout when you get the diesease, and you die from it, your estate will NOT get another payout from the plan.

However, there are options to tag Critical Illness with your Life (Whole or Term) Plans. If tagged, these plans are slightly more affordable compared to an a-la-carte purchase.

The mechanics for these plans differ from provider to provider. For more information on the diseases covered or mechanics of the plan, please refer to your Insurance provider.

Accident Plans
These are plans that compliments your portfolio. Honestly, in my opinion, these plans are the lowest priority in today's list. For Accident Plans, you get a payout should you lose a limb, or even a part of your limb, due to accidents. I'm not really up to date about the mechanics, but there are some whereby you can get a reimbursement from your visitation to your local medical practitioner (of course, it is subjected to terms and conditions).

Disability Income Plans
Another type of Insurance that compliments your portfolio, Disability Income plans replaces a portion of your income if you are unable to work due to illness or accident (loss of limbs). Payment will stop or reduce once you start working again. 

Last Words

Once again, I am sharing whatever I know about today's topic. I hope it shed some light in the differnet types of Insurance an insurance company can provide. Do not use my information as advice. Please consult a proper Financial Consultant for your portfolio goals.

I believe it is a personal duty to see this aspect of life covered to ensure those that you leave behind are well taken care of, as we never know what will happen in the future. Life, is unexpectedly short. Better have it and not use it, rather than needing it when you have none.

Warmest,
- Stephano