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Buying Insurance? These are the Essential Ones to Get!
Buying Insurance? These are the Essential Ones to Get!
Are you truly protected? Read this to find out.
Buying an insurance plan can be a tricky affair. There are many insurance plans from different providers that serve many purposes. How do you know which ones you should get?
The bad news is: We can’t tell you what exact plans you should buy, because the insurance plans you need depend on a wide range of factors such as your occupation, family situation, and lifestyle.
The good news is: There are a few insurance plans that we think are essential for basic protection. And we are here to let you know which ones!
1. Life Insurance
If you are thinking of buying only one insurance plan, this is the one you need! Life insurance basically protects your loved ones financially should you unexpectedly suffer a serious injury or pass away.
Most of the plans available cover two important things: Death and Permanent Disability. In case of your death, your family will be able to collect a sum of money to support them financially. If you are permanently disabled, the money will go to you to tide you through for a while since you might not be able to work anymore.
There are two types of Life Insurance:
| Term Insurance | Whole Life Insurance |
| Only pays out when you claim | Pays out cash if you withdraw |
| Protection for a limited number of years | Gives you life-long protection |
| Less expensive | More expensive |
There are also investment-linked insurance plans (click out to Basics of Insurance article) that you might want to consider. These plans allow you to protect yourself and also do some investing at the same time.
2. Personal Accident Insurance
This is also an important plan simply because you’d never know when you will get into an accident. So a Personal Accident plan gives you peace of mind as you go about your daily life.
Personal Accident Insurance mainly covers injuries suffered when you are involved in an accident. This includes broken limbs, loss of a limb, burns, lacerations, paralysis, and more. Some insurance plans also cover Traditional Chinese Medicine (TCM) treatment or chiropractic care.
3. Hospitalisation Insurance
Now you are protected from accidents. However, if the accident you’re involved in ends up sending you to a hospital for treatment, your Personal Accident Insurance payout might not be enough to cover for that. This is why Hospitalisation Insurance is essential as well! It helps to reduce the financial impact of your hospitalisation bills.
Hospitalisation bills can get pretty hefty especially in ASEAN countries. A 2018 study found that the total healthcare spending of ASEAN countries (Singapore, Indonesia, Thailand, Malaysia, Philippines, and Vietnam) was an estimated US$420 billion in a year. It also predicted that this cost will increase by 70% over the next two decades. This means that your hospital bills will only get more expensive from now onwards, and it’s crucial to get insurance to avoid paying the full sum yourself.
4. Critical Illness Insurance
Did you know that there are approximately 2.2 million new cancer cases and 1.4 million cancer-related deaths in Southeast Asia? Critical illness (CI) is actually more common than most of us realise. This is exactly why Critical Illness Insurance is one of the essential plans you need to have.
Critical Illness Insurance pays out a lump sum of money in the event that you are diagnosed with specific critical illnesses. While coverage differs for each plan, traditional CI insurance covers illnesses such as major cancer, heart attack, stroke, coronary artery by-pass surgery, end-stage kidney failure, end-stage lung disease and end-stage liver failure.
However, most traditional plans only provide payouts if the patient is diagnosed in advanced stages of the illness. This is where you might want to consider purchasing an Early-Stage Critical Insurance Plan. As the name suggests, the plan provides payouts when you are diagnosed with early-stage critical illnesses.
[Optional] Disability Income Insurance
Although this is not exactly a plan you absolutely need, we highly recommend it! While your life insurance might cover permanent disability, this only applies to situations when you have no chance of recovery. Disability Income Insurance then bridges the gap and covers you for temporary disability as well.
Should you suffer from a disability that doesn’t allow you to work temporarily, the Disability Income Insurance provides a payout to help ease your financial burden during that period of time, due to the loss of your income. Payment will usually stop once you can start work again.
Buy Insurance Plans That Suit You
Now you are ready to start purchasing your insurance plans! Remember, this is just a guide. You should do your own research about specific insurance plans, or talk to an insurance agent to find out which plan(s) suit you better.
Credit and Citations:
World Health Organization (2022), Urgently address gaps in cancer care: WHO, https://www.who.int/southeastasia/news/detail/04-02-2022-urgently-address-gaps-in-cancer-care-who
World Economic Forum (2018), The cost of healthcare is rising in ASEAN. How can nations get the most for their money? https://www.weforum.org/agenda/2018/08/cost-healthcare-rising-asean-nations-money/
