You will be able to rank risks by how much damage they would do to you and your family.
At the coffee, Hui Min's adviser friend opens a tablet with six products on it: a hospital plan, a critical illness plan, a whole life policy, an accident plan, an investment-linked plan and a savings plan. He says most people her age take "a basic package" of four. She asks which risk each one is for. He has to think about it.
The products are the wrong place to start. Start with the risks, and ask how much damage each would do to you and to the people who depend on you. Products come later, and only for the risks that matter. This lesson is about that order. Nothing here recommends a product.
For most first jobbers, two events would do the most financial damage.
The first is a large hospital bill. A serious accident or illness can cost far more than anyone in their twenties has saved. MediShield Life helps with the large bills in subsidised wards, and a group plan may help while you are employed, but there can still be a share left for you to pay, especially in a higher ward class or a private hospital.
The second is losing the ability to earn. Your income is likely your largest financial asset, because it will pay for everything else over the next forty years. An illness or injury that stops you working for months, or for good, removes it. Few first jobbers think about this, and group plans often cover it lightly or not at all, as Hui Min's benefits map in lesson 3.4 showed.
Other risks are real but less damaging. A minor accident, a dental bill, a short illness covered by sick leave: your emergency fund from lesson 4.3 exists for these.
Life insurance pays out when you die. The money goes to other people, so it only matters if someone would be worse off financially without your income.
For a first jobber with no dependants, the honest answer is often that nobody would be. Your parents would grieve, but if they do not rely on your money, a payout does not replace anything they need. For a first jobber who supports their parents, the answer changes. If Arjun's mother relies on part of his pay each month, his death would leave her short, and life cover sized to that gap starts to make sense.
So the question is not whether you are young and healthy. It is whose budget includes your income. Your DPS cover from lesson 6.1 is a starting point, and lesson 4.2 of The Singapore personal finance system, end to end, Term life: replacing income for people who depend on you, shows how to size the gap.
Hospital cover has one more layer worth knowing about. Integrated Shield Plans are private plans offered by insurers that sit on top of MediShield Life. They pay for stays in higher ward classes or private hospitals, which MediShield Life alone is not designed to cover.
Part of the premium can be paid from MediSave, up to withdrawal limits the CPF Board publishes. The rest is paid in cash. Riders, which are optional add-ons that reduce what you pay yourself on a claim, must be paid in cash entirely. Whether a shield plan is worth it for you depends on which ward you would want, your budget, and what your group plan already covers. Check the MediSave limits on cpf.gov.sg and read the Ministry of Health pages on Integrated Shield Plans before deciding anything.
Put the risks in order of how badly each would hit you or your family this year. Hui Min's ranking, for her situation:
A long illness or injury that stops her working, because she gives her parents S$400 a month and has a loan to repay A large hospital bill in a ward above what MediShield Life is designed for A serious diagnosis while she relies on group cover, which could make personal cover harder to get later Her own death, ranked lower because her parents both still work and do not depend on her allowance A minor accident or short illness, which her buffer and sick leave can handle
Arjun's list would look different. His mother depends on him, so death and disability both rank higher.
How individual insurance products work, how to compare them and how much cover to buy are covered in more depth in module 4 of The Singapore personal finance system, end to end. This lesson is about the order: risks first, then products, and only for the risks near the top. Your own top five comes from the same question, asked about your life rather than Hui Min's.
Rank five risks, from a hospital stay to your own death, by how badly each would hit you or your family this year.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).