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Insurance in Singapore

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Pal
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Insurance in Singapore

Post by Pal » Tue, 02 May 2017 10:57 am

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Ensuring that you’re protected from financial devastation in case of an emergency should be a top priority for anyone, but for those who have relocated to a new country, ensuring that such protection is in place is even more important. Depending on the policies that your company has in place for its employees, you may find that your insurance coverage may vary after moving to Singapore. There are many different types of insurance available, but these five types are the ones that you should consider having in place:

Health insurance

Of the various policies available, health insurance is one of the most common and important types of insurance to have. Sickness or injury may strike us at any time, and compared to home accidents that could be lessened considerably with the right safety precautions, and travel insurance, which may be necessary only for short intervals within the year, health problems may lie undetected for years, strike when we are at our most vulnerable, and rack up devastating bills that could ruin our finances.

Even if your company provides health insurance coverage, it’s important to check through the details to make sure you know exactly which illnesses are covered. For expatriates in particular, if you are holding a work pass in Singapore and do not contribute to the Central Provident Fund, you will not be able to have your medical fees subsidised at public hospitals. While medical fees in Singapore are generally affordable in Singapore, it’s better to ensure that you are protected even in the worst case scenario.

Life insurance

Life insurance ensures that a designated beneficiary will receive a lump sum in the event of your passing, and is a vital type of insurance for those with dependents. If your spouse and children are dependent on your salary, taking out a life insurance policy could provide you with a greater peace of mind about their financial security in the worst case scenario. Life insurance, depending on the individual contracts, will also usually be given out when the policyholder contracts a terminal illness. This allows the policyholder to enjoy their last days with greater comfort, and to make any last arrangements for their family.

Home insurance

While Singapore may be a great deal more fortunate than other countries in terms of its geographical location that ensures there is close to no risk of earthquakes or tsunamis, home insurance is still vital for every homeowner as other issues such as accidental damage, fire and vandalism could still occur. The cost of repairs could be high, and this cost could escalate sharply if valuable possessions are stored in your home as well. Home insurance could also include protection against theft, and this is one type of insurance that you should explore with your insurance provider.

Travel insurance

If it’s a hassle to sign up for travel insurance each time you go on holiday with your family, consider applying for annual travel insurance. Such insurance is ideal for people who either travel alone, or with their families, more than twice a year. Those who travel more will usually be able to enjoy cost savings and the added convenience of signing up just once, as compared to those who take up multiple single-trip policies. Single-trip policies are certainly useful as well, for those who rarely travel, or who have decided to go on a last-minute holiday. These policies may be booked through insurance companies, and are also frequently available on travel platforms such as Expedia, Trivago and Priceline.

Car insurance

In the past, car insurance premiums in Singapore were calculated based on the vehicle’s engine capacity, vehicle usage and vehicle value. These days, however, there is a greater emphasis placed on an analysis of the driver’s characteristics. Under the Risk Factor Premium Rating System, points are awarded for every additional layer of risk that a potential policy holder carries—these include the number of claims they have made in the past and their job industry. A person who transports goods, for instance, will have a different risk profile from a person with a deskbound job. The premiums charged by different insurance companies will also differ, so it’s good to get several quotes before signing up.

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malcontent
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Re: Insurance in Singapore

Post by malcontent » Thu, 02 Nov 2023 5:55 pm

Here’s a more interesting question: when can you say goodbye to insurance? For example, it is well established that once you achieve financial independence, you no longer need life insurance and can cancel your term life policy.

What about Medical insurance? I think you’d not just need financial independence, but maybe 2-3x. I did a quick search and google disappointed me, no magic number, but I know it exists. Anyone who is at least VHNW (US$5m or more) surely can go without medical insurance, but maybe they’d want an umbrella policy against lawsuits to safeguard themselves from financial risks.
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midlet2013
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Re: Insurance in Singapore

Post by midlet2013 » Thu, 02 Nov 2023 8:32 pm

Financial Independence implies ability to buy Medical Insurance. I do agree that Life n Term insurance can be skipped. But I suppose medical insurance is still ok particularly for kids.

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Re: Insurance in Singapore

Post by Wd40 » Sun, 05 Nov 2023 10:48 pm

malcontent wrote:
Thu, 02 Nov 2023 5:55 pm
Here’s a more interesting question: when can you say goodbye to insurance? For example, it is well established that once you achieve financial independence, you no longer need life insurance and can cancel your term life policy.

What about Medical insurance? I think you’d not just need financial independence, but maybe 2-3x. I did a quick search and google disappointed me, no magic number, but I know it exists. Anyone who is at least VHNW (US$5m or more) surely can go without medical insurance, but maybe they’d want an umbrella policy against lawsuits to safeguard themselves from financial risks.
Coming from a financial background, I mean I am a person who understands stock markets, derivatives, risk hedging etc, I believe medical insurance is kind of a hedging. You pay a premium which is like buying an option. They say in most case option buyers lose money. But in extreme cases, a buyer of an option makes a windfall. I think medical insurance is also same thing. Most people who buy insurance, over their lifetime, they would have paid more in premium than what they would have claimed. But there will always be a small percentage who successfully manage to make big claims for some major medical events.

So as a person with this financial background in mind, I feel there are better ways to hedge medical uncertainties, than to buy a medical insurance.
1) Work for a reputed employer, my employer an investment bank offers generous medical insurance benefits. I know when I retire, I won't be covered, but then again, I believe when you buy insurance from the open market, also when you are very old, your premium becomes so high its not worth it.

2) Have access to a low cost location for medical treatment when you retire. In my case it will be India. It could be Malaysia or Mexico.

So that's my take, I have never bought any medical or life insurance. I focus on financial independence and then access to low cost medical facilities.

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malcontent
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Re: Insurance in Singapore

Post by malcontent » Mon, 06 Nov 2023 6:00 pm

If someone has just barely attained FI, you’d definitely want medical insurance to safeguard that FI. But for someone that has double what they need for FI, then you’d probably want a very high deductible plan, at most.

I’ve been underinsured for decades, just have lousy employer group coverage for me and my family. Fortunately, I have only used it twice and both times it was only around $1-2k, the second time they almost refused to cover it. That’s what I hate about insurance, you can’t always count on it - but if you self-insure, you always can.
It is impossible for a man to learn what he thinks he already knows - Epictetus

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