Is There A Need (For People With No Dependents) To Buy Insurance?

There is a small group of Singaporeans who are happily being alone, minding their own business, working each day away and retiring, when the time is ripe, and enjoying whatever savings they have set aside.

When consulted for the need for Insurance, most of their replies will be:

  • If I am to be sick, even better, let me die earlier… (my thinking is: Is there nothing worth staying alive for and to enjoy in life – the beauty of mother nature?)
  • If I do not have enough savings for retirement, there is always Bread and Water (my thinking is: You work so hard and for so long, and in the end, only to enjoy Bread and Water, isn’t that very poor thing?)

So is there any need for People with no dependents in Singapore to buy Insurance?

My opinion: A Big Yes and A Small No

Why A Small “No”

If you are mostly alone with no dependents like your parents, spouse or children, then insurance will seriously mean nothing much to you especially plans that pays against Death.

Unless you want to make your last death wish worthwhile, you can consider using Insurance to set aside some money for your preferred charitable cause.

Why A Big “Yes”

For people with no dependents, you have only yourself to take care of, whatever you’ve earned will be for your own use. So if there is ever a need to protect and without bothering others, what is there to protect – it will be your income and your retirement.

So what kind of “Must-Have” insurances should a Person with No Dependent consider?

  1. Personal Accident Plan: With so hectic life in Singapore, everybody is on the rush – walking fast on the street and people driving like nobody’s business on the road – you’ll never know what will happen to you on the road tomorrow. An accident may happen but you may not be dead and you could jolly well lose a limb – you may lose your job and your income but your Personal Accident Plan will pay you for that partial loss and help you tide over.
  2. Disability Plan: This kind of plan is not widely promoted by or found in many Singapore Insurance Companies. What this plan covers, in simple terms, is that a doctor is able to certify that you are unable to work in your current work anymore (due to certain health constraints), you are entitled to a certain percentage of your current income (after a certain waiting period).
  3. Hospitalization Plan: With you in mind and nobody to bother, so should anything ever happen that renders you hospitalize – this plan will always come in handy to help take care of the majority of the hospitalization bills. Your lifetime savings are well-kept for your retirement uses.
  4. Investment-Linked Plan or Endowment Plan: Banks, for sure, are not giving high interest to you for keeping your savings with them. With inflation in mind, whatever the interest you earn today may just not match the increase in prices of tomorrow. It may just not be enough for your retirement use. Unless you are very investment-savvy, take on the challenge of stock investing and make your money work hard for you. If not, let the insurance companies work hard with your money – investment-linked plans (if you are able to take risks) or Endowment Plan (for safe and sound returns).

So What kind of “Can-Consider” Insurances should a Person with No Dependent consider?

  1. Critical Illness Coverage: Critical Illnesses like Cancer or Stroke will not kill you instantly. Most of the time, these illnesses may bother you for five years or more. During this time, you may stopped working and your income may stopped coming in. A hospitalization plan may come in handy during the initial stage but as you may know, a hospitalization plan may not cover some non-subsidized drugs. A Critical Illness Claim may just fill in this gap and help to take care. With advanced medical technologies, this lump sum of money may just help you to get well even sooner.
  2. Annuity Plan: I have managed to speak to a few clients who are happily being alone and most of them speak highly of having an annuity plan. Why is this so? You set aside a lump sum of money with the insurance company, let them grow the money, and when it is the ripe-time, you receive a sum of money every month till you pass on. The good side of an annuity plan – and do consider is that you’ll never have to worry that your lump sum of money will be used up as you live on to a ripe old age.
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