7 ways insurance is like baking
Everyone knows that staying well-insured is important as it enables you to have sufficient pay-outs to safeguard yourself against any unforeseen circumstances.
With so many different types of insurance, pinning down the best course of action for each one can seem complicated.
But it doesn’t have to be. Understanding the types of insurance is simple, like the following basic baking tips.
Nothing beats a freshly-baked muffin – but it can always be made better with a little icing on top.
And the same goes for your health insurance (medical expense).
Because MediShield Life may cover you against basic hospitalisation and medical treatment costs – but upgrading to an Integrated Shield Plan with attached riders (supplementary plans can be added to the policy) can further bump up your coverage to class A wards, while reducing your co-payment to 5% of the total bill.
For Singaporeans who are part of the pioneer generation, their healthcare insurance would be more extensive.
A wise pâtissier knows that precise measurements make or break a recipe’s success.
Likewise, weighing the needs of your disability insurance can help in its own way. By getting enough coverage to replace 80% of your monthly income, you can focus on recovering without worrying about your family’s lifestyle quality.
But the insurance income will only kick in after a waiting period. And the shorter the deferment period, the higher the premiums.
With the capital required to tide you through your rehabilitation, you can choose a shorter deferment period to cover more out of pocket expenses.
Getting the timing right is important. Not just during baking, but also when it comes to your critical illness insurance.
So do remember to get a policy that grants immediate pay-out upon diagnosis (of at least 5 years of your income). With it, you can enlist live-in help while taking time off to recuperate.
Cakes are made for sharing, and in the same way, your life insurance should also be planned with your loved ones in mind.
That’s why you should aim for a pay-out that covers 5 to 7 years of your income, to ensure that your family is well cared for while they re-evaluate their plans for the future.
Getting a policy that insures against Total Permanent Disability (also known as TPD) also extends your coverage boundaries, so your family is protected against all possibilities.
Your own safety should always come first – whether you’re baking up a storm or going about the norm.
But things don’t always go according to plan, and a personal accident policy can partially cover the initial costs payable should you fall on hard times.
Plus, its coverage also includes medical procedures that health insurance doesn’t account for, such as X-rays or MRI scans.
A cake may look like perfection – but a master baker knows that what’s on the inside is just as important as the outside.
And in terms of insurance, that’s what your home content policy is about. It provides pay-outs for what fire insurance doesn’t – such as personal belongings inside your house, lost cash and jewellery, and replacement of broken locks.
The usual liability coverage is S$100,000 for household contents, renovation, fixtures and fittings. But getting an add-on of at least S$500,000 will help to cover you for accidental damage to others’ property.
Finishing a whole cake in one sitting can be tough but covering helps to keep it from going bad.
And that’s what your mortgage insurance does. With a Mortgage Reducing Term Assurance or even simple term insurance, you can cover your outstanding house payment and safeguard your family’s future no matter what.
Here’s an overall breakdown on the different types of insurances available
Pays out a lump sum to the beneficiaries should the insurer pass on.
Helps cope with the cost of recovery should the insurer be ill, injured or incapacitated.
Protects the insurer's personal wellbeing and belongings should accdent befall.
Have your cake and eat it too. Life can throw a curveball when you least expect it, but with the right insurance coverage, you can live life to the fullest without worries.