A policy that pays out a large sum when you die or are severely and permanently disabled.
High Priority: If you have dependents (for example, a spouse, children or parents). “This type of policy is especially important if you are the sole provider in your family,” suggests Joy Chia, an associate financial consultant with Harold Ng & Associates. “The payout from this policy will provide for them if something happens to you.”
Low Priority: If you’re single and have no dependents. You may not need to be insured for death, but buy a policy that covers you for disability.
Disability Income Insurance
A policy that compensates you for your loss of income due to illness or injury.
High Priority: If you’re a professional with a specialised and high-income job (such as medical professionals). “As this type of insurance is one of the most expensive, you should make your decision based on how much you earn and the likelihood that you’ll lose your income due to illness or injury,” advises Ahmad Faris, associate manager with Manulife Singapore.
Low Priority: If your income is below $2,000, or if you have less money to dedicate to monthly premium payments.
Accident Insurance Plan
A policy that pays out if you are injured in an accident.
High Priority: If you’re in your 20s and at the beginning of your career. “Accident plans are also a great first step towards becoming insured,” advises Chia, “as the premiums are low and they cover accidents, which can happen to anyone at anytime.”
Getting it as a separate policy, and not as a rider (a provision that is added onto the main policy) on a life policy, is usually more economical.
Low Priority: If you’re already adequately covered by your company’s accident policy.