Money confessions: I bought more than $700k in critical illness coverage while in my 30s — here's why

My name is Tan Shereen and I’m a headhunter in the financial sector. Despite being in my thirties, I’ve invested heavily in my critical illness coverage.

Many may find it perplexing that my critical illness insurance coverage stacks up to a staggering $700,000 even though I’m in the prime of my life (mid-thirties and thriving!). After all, critical illness is often seen as a mere sidekick to a hospitalisation insurance plan.  

To put it in perspective, the Life Insurance Association (LIA) recommended that the average Singaporean should have approximately $316,000 in CI coverage to be deemed sufficient. Double that amount and mine still comes up higher. 

Don’t get me wrong, I don’t regret it one bit. Here are all my critical reasons why.

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When it comes to critical illness insurance, more is more

Last year, especially when the pandemic hit, I came to the sobering realisation that my financial wellbeing is of top priority. Relying simply on my hospitalisation plan to reimburse me for my medical and surgical bill is not enough as what could happen after discharge remains a huge question mark.

This is where critical illness insurance comes in, to bridge that underlooked gap during the recovery stage when I’ve been discharged from the hospital. 

Be prepared for substantial treatment costs and income loss

The road to recovery will be a long and arduous one, made more difficult by the likelihood that I will no longer be able to continue my fast-paced job as a headhunter in the financial sector.

The sad truth of being a working adult is that responsibilities like household bills will continue to pile up even when our income has come to a standstill. 

In short, money will be tight and we need to be prepared for it. Thanks to my super-size CI coverage, I will be able to count on the payout to support me fully as I focus on getting back on my feet.

ALSO READ: 7 best term insurance policies in Singapore for affordable protection

Insurance will always be an asset, not a liability

Aside from being a fitness buff with multiple Spartan Race records under my belt, I’m also passionate about building my wealth. Over the years I’ve grown a diverse portfolio of numerous wealth management funds (with returns!).

In a bid to protect my assets should my health take a hit, I decided not to leave anything to chance and sprung for a higher coverage CI plan.

Why I chose my CI plan

My trusted financial advisor recommended my current CI plan as it checks all the boxes for me. The payouts are high and the coverage is comprehensive as it covers more illnesses. The premium repayments are manageable, between $2,500 to $3,000 per annum.

Besides CI, I made to cover all my bases and purchased other types of insurance too, such as health, hospitalisation and personal accident coverage.

ALSO READ: 7 best term insurance policies in Singapore for affordable protection

Financial lessons I’ve learned

1. One should take full stock of own finances 

I’m a big believer in knowing one’s own finances from the inside out. Take full advantage of the online tools available to you and try to make sense of your money. Based on experience, it will only reward you in the long run.

Moreover, we’re grown adults and should be self-reliant enough to know how to protect our financial wellbeing.

2. Gather as much knowledge as you can

Arming yourself with knowledge will give you the clarity you need to make the best financial decisions possible. While I am lucky enough to have my trusted financial advisor who has always given me solid guidance, we must always take ownership of our own finances.

At the end of the day, we are responsible for our own money.

3. Don’t get easily influenced by others – if uncertain, read up

Step into the personal finance arena and one would typically hear lots of negative chatter. Most would propose the ‘right’ way to do things, without considering that no one is in the same financial situation as someone else.

Remember that our finances are almost as unique as your fingerprint. If you find yourself scratching your head at the jargon or you are simply not sure where to start, it’s best to read up to gain more insight. This beats taking the plunge blind.

This article was first published in SingSaver.com.sg.