Insurance Planning Flashcards
What are the 3 main types of insurance?
- Life
- Health
- General (Non-Life)
What are 5 examples of Life Insurance?
- Term
- Whole Life
- Endowment
- Investment-Linked
- Universal Life
What are the 4 main types of Health Insurance?
- Hospitalisation
- Critical Illness
- Personal Accident
- Long-Term Care
What are the 4 main types of General (Non-Life) Insurance?
- Property
- Business Interruption
- Travel (Medical, Trip delay/Cancellation, Baggage Loss)
- Motor
What are the 3 roles of Insurance?
- Income Replacement (For premature death)
- Caregiving Expenses
- Medical Expenses
What are the different needs for life insurance for each family type?
Refer to slides
How long should Death insurance cover?
(Not a number)
When we retire or have no more dependants
How long should income replacement (Disability/Critical Illness) cover?
(not a number)
When we retire or have no more dependants
What are the 2 components that medical insurance should cover?
- Loss of income (Until retirement/when we have no more dependants)
- Medical, hospitalisation expenses (As long as possible)
How much Death insurance should we have?
(Amount of income)
10x of annual income + account for dependants and loans - savings and existing insurance
How much medical insurance should we have?
(2 components)
- Loss of income (5 years of gross income)
- Medical, hospitalisation expenses (Depends on healthcare requirements and expectations) - Ward A/B/C
How much Disability insurance should we have?
- Loss of income (75% of monthly income)
- Caregiving costs (per month)
Family members: $600
Domestic helper: $1,200
Day care: $945 - $1,575
Nursing home: $2,000 - $3,600
Basic coverage can be enhanced through Careshield Life supplements
What are the 4 components of Whole Life Insurance?
- 80% in participating fund, 20% insurance (depending on insurers)
- Coverage for life
- More expensive
- Has cash value
What is the Home Protection Scheme (HPS)?
Protects CPF members and families from losing their HDB flat in the event of:
1. Death
2. Terminal Illness
3. Total Permanent Disability
–> Helps to pay off the outstanding home loan
Who is under the Home Protection Scheme?
Mandatory for CPF members who use their CPF to pay HDB monthly instalments
How are the premiums calculated under the Home Protection Scheme?
(4 components)
Age, gender, loan, tenure (Deducted through CPF or cash)
What is the Dependants’ Protection Scheme?
An OPT-OUT term insurance for CPF members (SC or PR) who are 21 to 65 years old and have made their first CPF contribution.
It provides basic financial protection for you and your family in the event of death, terminal illness, or total permanent disability
How are the premiums paid for the Dependants’ Protection Scheme?
Annually by CPF OA (If OA is not enough, it will be paid from SA) OR Cash
Who is administering the Dependants’ Protection Scheme?
Great Eastern Life
What is the sum assured under DPS?
0-59 years old: $70k (3 years of salary for a lower-income CPF member
60-64 years old: $55k
What is the Annual Premium for DPS?
34yrs old and below: $18
35-39yrs old: $30
40-44yrs old: $50
45-49yrs old: $93
50-54yrs old: $188
55yrs old and above: $298
What is an Endowment Plan?
(4 components)
- Specific tenure: 2 to 30 years
- Cash Value and bonuses
- Sum assured + accumulated bonuses if insured dies within policy tenure.
- Maturity value if insured survives the policy tenure
What is an Investment-Linked Insurance Plan?
Offers protection and investment
What is Critical Illness Insurance?
Pays out a LUMP SUM upon diagnosis (Early or late stage) –> Defrays living expenses especially if you cannot work
- Can be a standalone insurance product
- Can be a rider to term/life insurance
