4 Reasons why Singles and with No Dependents should still consider Insurance.
If you have ever thought that you are healthy (eat well, sleep well, exercise well) and you will be free from any form of illnesses and you do not need to have any health or life insurance to cover yourself… think again… I have just realized that one of my healthy friends have just contracted early stages of cancer but he is on the way to recovery because of early detection and after going through chemotherapy cycles.
Cancer Finds Just About Anybody
This is a hard fact that you cannot simply avoid! This form of illness will find just about anybody – regardless of age, health and financial status. You can be 100% conscious of your health or fitness level but you can never 100% avoid it if it ever does come knocking at your door. Though it is still as important to be health conscious, it does pay to have more attention that you are always financially prepared (be it now or in the future) to handle such situation!
Why It Matters To Be Financially Prepared
Understood from my friend that once you know there are signs of contracting it, it is going to be a toll financially… from a simple pain in a particular body area to the stage of convincing yourself to see a doctor to get a proper diagnose that is already the beginning of a financial nightmare – you have to pay (and keep paying) to go for medical tests after medical tests just to confirm the status.
Once you have confirmed that its not a good sign, you have to speak to a specialist to diagnose the stage at which you may be in and to start arranging for advance medical treatments and screenings. The road to recovery is there but the reality of life is that you have to pay to go through it. Meanwhile if you are working for a living, this road to recovery will have some effects on it as well – because of the treatments involved, you will be too tired to work, so most probably you have to put yourself on long (paid and unpaid) medical leave…
How To Get Yourself Prepared For Any Health Situation
#1 You Need To Exercise
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Do you have a Personal Accident Plan included in your insurance portfolio? If not, do you know that you may not be adequately covered in certain aspects of your Financial Planning?
Recently I had two prospects coming to me, asking me if I could help them with their recent medical bills resulting from an accident. After looking through their portfolios, one of them have a simple Term Insurance that cover against Death, Total & Permanent Disability and the 30 Critical Illnesses. The other party has a lot of those fixed deposit plans with the banks and certain insurance companies, insurance coverage wise is just on death and total & permanent disability.
The only advice is that I can give is that they will not be able to claim from any of their current insurance plans, neither could they claim from their medishields because they were not warded and most of their treatments came from the clinical sides.
They were disappointed but they were not angry because they told me that they have never thought that they will meet with an accident and have always ditched the idea of getting a Personal Accident Plan because they feel that it’s a waste of money (no benefits until there’s a claim else money spent is down the drain)! They can only live with bearing the full medical costs on their own now!
The Importance Of Having A Personal Accident Plan
So what are the main benefits of getting a Personal Accident Plan? Let’s look at a few:
1. You Can Claim Reimbursements For Your Medical Bills For Conditions Resulted From Accidents
As long as you have suffered some form of injury because of an accident (there’s a proper definition to this so please do check against your product summary) and you have incurred a bill either from a hospital or from a clinic (yes, this is covered and it also include those TCM). You can actually claim from your Personal Accident Plan up to a certain limit depending on your plan type.
If the limits are high enough, you may be entitled to claim for future medical bills (especially follow-ups) for the current injury.
2. You Can Claim Compensation For Some Permanent Injury Suffered Due To Accidents
If, you do suffer from a permanent injury, e.g loss of an arm or an eye, you can also claim some form of compensations from your Personal Accident Plan.
3. You Can Get Some Cash Benefits Because Of Your Temporary Disablement
You may suffer from a broken arm that will result in you having to have a long medical leave and thus you are unable to go back to work. Your income may suffer as a result. Having a Personal Accident Plan may help to lessen the financial impact because most plans out there offer Cash Benefits (will never be high enough to cover your full month’s pay) to help you tide over the situations.
Why A Personal Accident Plan Is A Must-Have In Your Insurance Portfolio
This is true and sad!
I just met up with a client who is urgently interested to get a medical insurance plan because the company is offering some form of cash rebates (as a form of encouragement) when any of their employees decide to “upgrade” themselves.
The outcome is that I still went ahead with the application because the client does need that medical insurance because he does not even have the basic medishield plan under the CPF Board. This is despite the fact that the client still feels that it’s not a must to have that medical insurance because he is still young and that nothing will ever happened!
But I do hope that after my fair bit of explanation and persuasion, the client will still hold on to that insurance after the rebate is given…
If You Belong To This Category Of People…
There is nothing wrong if you belong to this category of people and to enjoy the rebates from the company. But as a Financial Planner, I do wish to highlight the rationale behind the company’s decision to offer the rebates and the importance of getting yourself well-covered adequately and early.
Rationale Behind The Rebates
There are still many people who are unaware of the importance of doing a proper Financial Planning and getting themselves covered adequately under an insurance plan. Therefore the rationale behind the rebates is to encourage their employees to be actively involved in knowing what they are covered and how to get covered.
This is precisely what happened to this client. He does not even know what are the insurance plans that he has till date. He even got mixed up that his Dependent Protection Scheme (DPS) has always been his Medishield Plan.
Because of this rebate, he decides to look for me as his Financial Planner and has all his insurance plans reviewed. Though there’s no financial needs analysis done for him, at least at that meeting, he does got himself covered under a proper medical insurance (which I believe is a must-have for everybody, irregardless of how much you do not trust insurance)!
There’s Certain Level Of Importance Behind An Insurance Plan
1. If I do not die, be permanently incapacitated before the age of 60 (for the case of DPS) or unable to commit to at least 3 out of the daily 6 activities (for the case of Eldershield), the total premiums paid by me are down the drain
2. I do not know what these plans are all about.
And when unforeseen circumstances do happen, some of the fingers are actually pointing to the insurance companies for not doing their best to ask the Policy Holders to keep the plan or that the plan was terminated without the Policy Holders’ acknowledgement (they do happen!)
Then there will be a tough time asking for the revival of the plans… asking for leniency and such…
The Premiums Paid Is Just A Small Price…
Let’s calculate the total premiums paid when you first get in (entry age is 16 if you do make your first CPF contribution) to age 60:
- Age 16 – 34, $36 per year, a total of 19 x $36 = $684
- Age 35 – 39, $48 per year, a total of 5 x $48 = $240
- Age 40 – 44, $84 per year, a total of 5 x $84 = $420
- Age 45 – 49, $144 per year, a total of 5 x $144 = $720
- Age 50 – 54, $228 per year, a total of 5 x $228 = $1140
- Age 55- 60, $260 per year, a total of 5 x $260 = $1300
Making a total premiums paid of $4504 during a duration of 45 years, an average of $100 per year, $8.33 per month, $0.28 per day but covering you for a lump sum $46,000 (not including the bonuses). And should anything happen meanwhile, the return-fold is 46,000/100 = 460 times instantly.