Insurance has become way too complicated. Insurers know there is a demand for safety, and try to cover everything in more and more comprehensive and complex plans.

But oftentimes, trying to be comprehensive leaves you with less real protection.

I wanted to be very clear on what is essential and what it actually costs, so people can buy what they really need.

This is first-hand experience, because I have been through stage 3 cancer and claimed all the policies myself. I have filed in every single claim form, argued with insurance companies, and cashed in the cheques. I know what insurance agents won’t tell you.

There are only 2 essential insurance plans you need to have in Singapore. The rest are mostly good-to-have, and which I will cover in a Part 2.

1. Hospitalisation/Health

What: Otherwise known as Integrated Shield Plans (IPs), these cover your health treatment costs. Whatever treatment or surgery that you do in an approved hospital, should be covered.

Why: This protects you from large medical bills. Treatment for cancer can cost hundreds of thousands of dollars. Same for major surgeries like heart operations. If you don’t have this, you are basically screwed if you get anything serious.

Tips: I would heavily recommend that people pay more and get private hospital insurance. This greatly expands your treatment speed and options, as well as the quality of your surroundings. It does make a big difference.

I understand if private hospital insurance is out of reach of some people. So just get the best IP you can afford, any plan is better than no plan.

Please also get the riders which cover a greater share of the co-pays and provide daily cash benefits. They are relatively affordable and easily pay for themselves.

Typical cost: $310 (MediSave) + $375 (cash) = $685 for the NTUC preferred plan, age 30-35.

2. Critical Illness

What: This pays out a fixed sum if you are diagnosed with any of 37 critical illnesses (CI). Death and Total Permanent Disability is often part of such plans.

Why: This is to give you a fixed sum to tide you over while you are getting treatment and recovery. IPs just pays for the treatment. You can’t work while being hospitalised. You and your family will still need food and a roof over your head.

Tips: The general advice out there is to buy at least 5-10 times your annual income. I will go further to say that buy enough so you don’t need to work ever again if you get a critical illness. You just don’t know how bad it will be and how young you will be.

Typical cost: NTUC and Mindef have the most cost-efficient term insurance plans. They are group plans, which means you must be a member to be able to buy their plans. As they have a limit on their sum insured, you may need to shop around for more than 1 plan.

NTUC Luv plan: $480 for $200,000 coverage for 19-45 years old.

Mindef Group Term Insurance: $148 + Living Care Rider ($216) = $364 for $300,000 coverage, for 31-35 years old.

Total for $500,000 CI and death coverage = $844 per year.

$1,500 is all you need

So that’s it! The total cost to you for all the essential protection is about $1,500 per year or $125 per month.


It costs 2.78% of a Singaporean’s median monthly salary of $4,500.

It is in fact an overestimate. It’s not a must to get a private hospital plan, and $310 can be paid through MediSave.

You don’t need whole life, you don’t need endowments, you don’t need early CI and multi-pay. You definitely don’t need investment -linked policies.

If you have the money, sure why not. I have bought endowments and whole life policies for my kid. We also have personal accident, disability income, and early CI policies.

But you must take care of the 2 essential plans first. Buying the wrong plans for your life stage can heavily reduce your protection! Because they cost so much, people can’t afford to buy real protection. A typical whole life CI plan for $250,000 coverage is around $4,000 a year. That is 4 times the cost for half the protection, as compared to term plans.

That’s it. All the insurance you really need. Don’t be fooled if people push other plans ahead of these.

What are you waiting for?

14 thoughts on “The Truth about Insurance: You just need 2 Essential Plans

  1. I would add mortgage insurance, unless your CI amount is enough for both dependents & mortgage.

    Reducing term mortgage insurance like CPF’s Home Protection Scheme is also very cheap, so they’re a no-brainer.

    1. Hmm coverage for CPF’s HPS for $300,000 is around $300. The Mindef basic plan for the same coverage is $148.

      Plus, HPS is compulsory, most people don’t need to think about it. They don’t have a choice. But people need to think about buying CI and IPs, and choose from a lot of different plans. So I think its better to highlight these as the essentials.

      But you are right in saying that we should have enough insurance to cover our mortgage liabilities. Totally agree.

      Thanks for your thoughts and comments! I appreciate the time you took.

  2. I think you list out 2 of them well. By right disability income is what you are talking about instead of CI. However, it is a debate if disability income is better in reality than critical illness.

    1. I have utilised both CI and disability income … they are both useful.

      Quick observation is that disability income is harder to claim.. have to provide proof of employment, income, and health. CI claims are more straightforward and just need to prove health. I settled my CI claims in about 2 months, it took 6 months for disability income. But the upside is that disability provides income for life while CI is one lump sum.

      I want to cover disability income soon in part 2.

      Thanks for your comments Kyith!

      1. May I enquire which disability income plan provides income for life…

    1. An Eldershield supplement or the upcoming CareShield will provide income for life in the event of disability. But you’re right in that the private plans you can buy from Aviva or AIA are up to age 60. Thanks for pointing that out.

  3. The Truth about Insurance: You just need to take care of the 3 What If…

    1. What if you survive beyond age 65, who pay
    2. What if you survive before age 65, who pay
    3. What if you survive age 65 but not well, who pay

    Buying Insurance cannot change your life, but it prevents your lifestyle from being changed…
    Jack Ma

    You may not turn bankrupt because of buying insurance, but you may cause your love ones to turn bankrupt if you don’t…
    Jack Ma

    Nobody like to buy insurance but everyone likes what an insurance payout can do for them….

    I once heard that the best gift for a child is a good tertiary education…

    I think the best gift a parent can give to their child is not to be their financial burden when they grow old…

    Tertiary education problem is just a 4 year problem, the child can always take study loan…

    But if you become a financial burden to them when you grow old, it’s a lifetime problem… And there is not such thing as “retirement loan”…


    1. If I make it to 65, my kid is already in his thirties. He better know how to earn a living by himself. Agree that best gift a parent can give is to have their own financial means. At 65, I would have CPF LIFE, my medical insurance, and hopefully the same amount I have now because I don’t touch the principal. My kid will have all the resources he needs for his education as well as a headstart, but he must be able to stand on his own

      1. Yah bro, that just one what if… How abt the other 2 what if…

        When we do planning… We simulate all possible outcome… Otherwise, 2/3 of the risk is not covered…

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