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I am a millennial. What insurance do I need?

*Disclaimer: This is just a general guideline and in no way should any of this be used as advice. Please consult a professional financial advisor. In life, these are probably the 3 worst scenarios that we won’t want to face:

1. Terminal illness – i.e. cancer that is often coupled with hefty hospital bills. According to the Interim Annual Registry Report released by theSingapore Cancer Registry, about 35 people are diagnosed with cancer every day between 2011 and 2014.

2. Death – Not only will your loved ones lose a source of income, they will also inherit your debts and loans.

3. Unable to retire – Based on a survey that NTUC Income has commissioned Nielson to conduct in 2016, it was found that retirees aged between 60 and 70 saved only one-third of the funds they perceived to be sufficient for retirement. We often hear people asking, “ Is insurance necessary? What are the key insurances that I need?” It is common for people to find understanding insurance a chore and they tend to brush the issue aside until it is too late. However, the truth is, insurance is our life’s goalkeeper; serving as our final line of defense. When life doesn’t pan out the way we would like it to, we will need to depend on it to help us tide through our financial troubles. If you have started working or have minimal insurance coverage in place, here is a list of basic insurance that you should get.

Health Health insurance protects us financially from unforeseen health issues, which cause us to be unable to work permanently or temporarily. Most, if not all would agree that health is the greatest gift of life. You might not appreciate it as much when you are young but it would be sensible to start planning early. In 2017, according to HSBC's Singapore report on The Future of Retirement series, Singaporeans aged between 20 and 37 expect to stop working at 60 which is two years below the overall average of those surveyed in 16 nations. However, unforeseen health issues can chalk up hefty medical bills.

With health insurance, it ensures your savings will not be depleted in the event of unforeseen health complications, and helps you to stay on track of your retirement goals. Premiums for life and health insurance are inversely proportional to age upon sign-up or renewal. This is because insurance premiums are related to mortality and morbidity rates. There is a lower likelihood of passing away or contracting illness when one is young. Meaning to say the younger you are, the cheaper your premium would be. Therefore, you should take advantage and purchase insurance early!

Life The purpose of life insurance,” as financial advisory firm Kiplinger explains it, "is to allow your family members to pay the bills and live their lives as planned despite your absence.” Life insurance protects us from the possibility of income loss due to permanent disability, critical illness or death. It allows us to provide financial support to the individual in the event of disability or our loved ones in the event of death. Even without dependents, it is good to get ourselves covered with life insurance as it helps us to mitigate the loss of income in the event of disability.

Savings Another aspect that young working adults should consider is savings and retirement. Based on a survey conducted by Nielson and commissioned by NTUC Income in 2016, 64% of the respondents aged between 25 and 35 agree that retirement investment helps to ensure sufficient savings for their future needs. However, for many of us that have just started working, saving for our first property would be our top financial priority. Regardless if our goal is to save for retirement or important milestones, we would definitely require a sum of money at some point in our lives. Endowment insurance can help us to plan and work towards our goals. Upon maturity of the plan, maturity benefit would be paid.

On top of that, the interest rates given are generally higher as compared to the banks therefore giving better returns. It is good to cultivate the habit of saving early and start saving for rainy days or major milestones in life.

All in all, there is no one-size-fits-all plan that will work for everyone. It is important that you find plans that are suitable based on your requirements. If you are still unsure, talk to your financial advisor and look at your overall insurance portfolio together. They will be able to help you customise your coverage and minimise the risk of duplication


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