Assessing your insurance needs

Published in October 2020

Article Summary

What do you want to protect? Learn how to assess and choose the right insurance product and estimate exactly how much insurance is enough for you in this article by MoneySense*, Singapore’s national financial education programme.

Understanding annuities

Nowadays, it is possible to be insured against all sorts of risks. But it may not be necessary to cover yourself against all risks. Finding the right insurance product is about knowing what you want to protect and how much you will need to cover a financial loss if the event were to happen.

Here are the 3 main categories of insurance and how they can help you:

Life Insurance

If you're worried about Consider this type of insurance How it helps
Death of the breadwinner Life insurance Provides some money for your family if you pass away.
Total & permanent disability Life insurance Provides some money for you and your family if you suffer from a total and permanent disability.
Death of mortgagor/main borrower of home loan Mortgage reducing term assurance (a form of life insurance) Pays off the mortgage if the mortgagor passes away.

See also: Guide to types of life insurance

Health insurance

If you're worried about Consider this type of insurance How it helps
Trauma or critical illness Critical illness insurance Pays a portion or lump sum on the first diagnosis of a serious illness.
Medical bills for major illness or accident Medical expense insurance, e.g. MediShield Life (compulsory for Singapore Citizens and PRs), Integrated Shield Plans, other hospital and medical plans and riders.

The main medical expense insurance plans pay a portion of hospital and surgical costs if you're ill or suffering from injuries due to an accident.

Complementary plans such as riders cover the co-payment portions (e.g. deductible and co-insurance) that are not covered under the main plans.

Long-term care for disability Long-term care plans, e.g. ElderShield, ElderShield supplements Pays a fixed monthly amount for long-term treatment upon the insured’s inability to perform a number of “activities of daily living” such as bathing and dressing.
Loss of income because of hospitalisation Hospitalisation cash insurance Provides income if you're hospitalised.

See also: Guide to types of health insurance

General insurance

If you're worried about Consider this type of insurance How it helps
Loss of or damage to your belongings Home contents insurance Pays for repairs or replacement if you suffer loss or damage to your home or its contents. If you are renting your home, it’s your responsibility to cover the loss of or damage to the contents of your home.
Damage to or theft of your car Car insurance Pays for repairs or replacement if your car is stolen or damaged.
Damage to your home Fire or home insurance Pays for repairs or replacement if you suffer loss or damage to your home as a result of perils such as fire, flood, and burglary.
Loss of luggage, trip delays, cost of medical care while travelling Travel insurance

Pays for repairs or replacement if you suffer loss or damage to your belongings. Also pays for financial loss if there are delays or cancellations.

Pays for costs related to a personal accident while overseas including medical and repatriation expenses.

Protecting your pet Pet insurance Pays for vet's bills. Some will pay for you to advertise if your pet has been lost or even for kennel/cattery fees if the pet is suddenly admitted into a hospital.

How much insurance is enough?

To help you decide what insurance you need, make a list of the risks or events that concern you. Assess the likelihood of the event happening and the financial loss you or your dependants may suffer if so.

Consider how you would cover the financial loss. Buying a watch to replace a lost one might be fairly easy, but large hospital bills could set back your retirement goals if you haven’t some savings or insurance to cover this. If you already have some insurance policies, check to see if these cover you for the risks you are concerned about.

Remember you do not need to have insurance for everything, just the things that could set back your financial situation or your financial goals.

*MoneySense is Singapore’s national financial education programme. Its aim is to help Singaporeans to manage their money well, and make sound financial decisions on their own. MoneySense is not affiliated with, nor does it endorse commercial entities or their business activities. For more useful resources on personal finance, visit and follow MoneySense on Facebook ( and Instagram (@moneysense_sg).

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