Death.

Min $500,000 or 10 years annual income (whichever is higher)

Death coverage is argueably the least popular among everyone and yet the most basic building block of any coverage. Think of it this way, if there is no coverage for death, in the inevitable final destination of everyone including you and me, how is the insurance company able to terminate every contract that you have signed with them. For others, this coverage signifies the legacy that they will leave behind for dependants and future generations.

Total Permanent Disability.

Min $500,000 or 10 years annual income (whichever is higher)

Total Permanent Disability is a phrase used in the insurance industry. Generally speaking, it means that because of a sickness or injury, a person is unable to work in their own or any occupation for which they are suited by training, education, or experience. In some cases, it can also be determined by the inability to perform the common pre-determined six activities of daily living (ADL) including (by oneself) washing, dressing, feeding, mobility, toileting, transferring.

This is likely the worst state to be in as the victim would not be in a position to make much choices for himself. Even simple things that we take for granted, like brushing teeth and toileting, requires external help. Eyes wide open.

Early Critical Illness.

Min $300,000 or 5 years annual income (whichever is higher)

This provides coverage when one is diagnosed in the early stages of a critical illness. Before anything else, it helps to understand what a critical illness plan does. When diagnosed with a critical illness covered by the plan, a lump sum is paid out, that can used to cover costs of outpatient treatments or any other living expenses. The payout is a fixed amount determined at point of purchase of the plan. What people often forget is that these emergencies or illnesses often incur far greater than average medical costs, hence such policies pay out cash to help cover those overruns where traditional health insurance may fall short.

It is also often overlooked that in the event of a critical illness, it is highly unlikely that a person is able to resume immediately normal day to day activities akin to pre contracting early stage critical illness. We have to recognise that while we have a good chance of recovery, it takes time to recover. People most likely would be unable to purchase further coverage, and none of the day to day bills can be ignored eg housing loans, phone bills, outpatient medical costs, living expenses for self, parents and children or other dependants and most importantly, premiums payable for hospitalisation and other insurance plans.

it is often confused with hospitalisation coverage and this is where most people misunderstand. It is common for a hospitalisation to occur then critical illness is diagnosed, but it is virtually impossible to continue being hospitalised in a long drawn fight to recover. Most part of the medical treatment is done on an outpatient basis.

Major Critical Illness.

Min $500,000 or 10 years annual income (whichever is higher)

This provides coverage when one is diagnosed in the major stages of a critical illness akin to medical emergencies like heart attack, stroke, or cancer. This is not the same terminal illness stage. Today’s medical advancements does provide a chance to full recovery. What is really important is to recognise that recovery must not be at the costs of your entire life savings accumulated over the years or extensive downgrading of your current standard of living. At a time when you may not be able to work and earn a salary, this gives you additional options to seek medical treatments or complementary therapy.

No, it does not mean that without family history of known critical illnesses, or when you are young you are immune. To put it plainly, hospitals DO NOT live on repeated patients from the same family. Yes, it pays to insure young as the premiums are much more affordable and you have a higher chance to recoup the premiums paid.

Most importantly, it is easy to say “if anything happens, just let me die”, making your family members see it happen is a lot harder then you think.

Accident Coverage.

Min $500,000 or 10 years annual income (whichever is higher)

This covers injuries, which might include a broken limb, loss of a limb, burns, lacerations, or paralysis. In the event of your accidental death, it also pays out money to your designated beneficiary. Accident coverage usually comprises of 2 main components. One being a benefits payment, which basically pays a lump sum on meeting the schedule of benefits (broken limbs) or medical certification requirement (MC given by doctors), the other being a reimbursement payment of medical costs for treatments. It pays to understand that benefit payments will stack up regardless if you experience a financial loss because of the accident, while reimbursement payments will cover your financial loss up to the amount your paid out-of-pocket, or up to the sum assured you purchased, whichever is lower.

Depending on the chosen distributions channel by which you purchase your policies, terms and conditions relating to benefit payments can differ by a lot. One contract could possibly read as “Loss of limbs”, while another could be “Loss of or the permanent total loss of use of both limbs”. The difference is far greater than you can imagine.

The claims period allowed by your policy is another point to watch out for as some policies allow you only 15 days to file your first claim notification to the insurer, and others 30 days.

Complimentary medicine like traditional Chinese medicine and/or chiropractors are often covered as an extension to the policy. this allows you leeway to seek other less mainstream medical help.

Hospitalisation.

Hospitalisation insurance covers payments for hospital stays, outpatient medical treatment (pre and post bills), day surgeries, and some hospital-related activity that involves the insured's health. Hospitalisation insurance also involves hospital cash plan.

It makes absolute sense to understand that it takes 4 different components to make up a proper hospitalisation coverage. The main plan which covers bulk of serious hospitalisation, the rider which covers the initial part of the hospital bill, the hospital reimbursement plan that covers a percentage of the out-of-pocket expenses and the hospital income plan that provides cash for daily in-patient stays to cover additional costs on the part of the insured.

With the current 5% co-payment introduced into the health insurance scene, workplace insurance now plays a very important role. Both the workplace and personal hospitalisation plans need to be able to work hand-in-hand to be effective. especially so when panel doctors are dictated by some insurers, and other introduce excess in event of a claim.

Disability Income.

Cover up to 75% of your monthly income

This provides supplementary income in the event an illness or accident results in a disability that prevents the insured from working at their regular employment by which they are reasonably trained. Benefits are usually paid monthly so the insured can maintain a comparable standard of living and pay recurring expenses like food, housing loan repayments, transport, medication, helper etc to name a few.

This is a largely overlooked component of financial planning, but it also provides the best stop gap measure until the required sum assured coverage is achieved by the insured’s purchases of life and term policies. The max sum assured allowed to be purchased is up to 75% of one’s monthly income. The rational is that it is mostly possible to downgrade your lifestyle immediately by only about 25% of your current standard of living. In such a claimable event, the insured can now delay the use of majority of the lump sum payout until after age 65.

In the event that insured is able to return to work in a lower capacity than before, this will also pay the difference between the sum assured and the new monthly income to ensure that the standard of living is not compromised.

Wealth Planning / Retirement Planning.

It all begins with an idea. Maybe you want to launch a business. Maybe you want to turn a hobby into something more. Or maybe you have a creative project to share with the world. Maybe you just want to live life. Whatever you wish, money and the positive growth of money plays a key role.

Most people understand the concept of man-at-work. They forget the concept of money-at-work to combat inflation and also to avoid having “lazy” money. The common viewpoint is that when they see the absolute amount of money in their bank account grow, they understand that as money is growing. The hidden danger is the actual purchasing power of your money.

Think, 10 years ago, how much is your coffee? How much is it now? How much would it be 10 years later? Would your money grow as fast ? if it does not, then you are losing money. Period.

Nest comes the fact that we are assuming that you are always fit and proper to continue earning a big fat income. If something happens half way and you recover from the bout of illness or accident, retirement does not take back seat. It stays on course and still happens at age 65.