Insurance Decoded

Learn how each type of policy is priced and put together, work out how much cover your household needs, and compare products using your own numbers.

Many people leave their insurance decisions to an adviser. You see a projection with a large figure at age 65 and sign a policy you will pay into for decades, without knowing what the premium pays for. Some people end up with too little cover and costly savings plans. Others pay for overlapping riders they never needed. This course explains how each product is priced and structured, so you can see where your premium goes. You then size life, hospital, critical illness and disability cover from your own household's numbers, compare the structures on the same amount of money, and learn how to buy, switch and review policies without losing value.

What you'll be able to do

• Split any premium into the cost of risk, the insurer's costs and any savings element
• Work out a sum assured and term for life cover from your household's needs, minus the cover you already have
• Compare term, whole life and an ILP on the same premium over the same number of years
• Compare Integrated Shield plans on ward class, co-payment, premiums by age and panel rules
• Size critical illness and disability income cover from your own expenses and the benefits you already have
• Check an adviser's recommendation against your needs and the cost of switching any policy
• Write a household insurance plan and an adviser brief you can bring to any meeting

Syllabus

Module 1: See what a premium actually pays for

You'll learn the three parts of a premium, why cover costs more as you age, and how underwriting and exclusions decide what a policy pays. Then you'll break down the premiums you pay today.

• 1.1 Every premium pays for risk, costs and sometimes savings
• 1.2 Why premiums rise with age, and how level premiums hide it
• 1.3 Underwriting, exclusions and what you must disclose
• 1.4 Break down the premiums you pay today

Module 2: Size life cover from the people who depend on you

Work out how much life cover your household needs from what it actually spends and owes. Subtract the cover you already have, then set the term to match your dependants and your loan.

• 2.1 Needs-based cover beats a multiple of salary
• 2.2 Subtract what already covers you: DPS, HPS, group plans and savings
• 2.3 Set the term from your youngest dependant and your loan
• 2.4 Build your sum assured sheet

Module 3: Choose between term, whole life and ILPs

You will learn how whole life and investment-linked policies are priced and how to read an illustration from first page to last. Then you will compare both with term cover plus separate investing, using the same money.

• 3.1 How whole life is priced and where bonuses come from
• 3.2 Read a whole life illustration from first page to last
• 3.3 Inside an ILP: units, charges and the cost of cover with age
• 3.4 Buy term and invest the rest, modelled honestly
• 3.5 When permanent cover is the point
• 3.6 Compare three structures on the same premium

Module 4: Pick hospital cover you can keep paying for

Learn how an Integrated Shield plan and its rider sit on top of MediShield Life. Compare plans on ward class, co-payment and panel rules, and check that you can still afford the premiums as you get older.

• 4.1 How a shield plan sits on top of the national basic cover
• 4.2 Ward class, panel doctors and pre-authorisation
• 4.3 Deductibles, co-insurance and the co-payment riders must keep
• 4.4 Premiums at 30, 50 and 70: can you keep paying
• 4.5 Compare three shield plans for your ward choice

Module 5: Cover a serious illness with the right definitions

Learn how critical illness cover pays out, what the standard definitions decide, how early-stage and multi-pay plans differ, and whether a claim reduces your life cover. Then work out how much cover you need.

• 5.1 Critical illness cover pays a lump sum on diagnosis
• 5.2 Severe, early and multi-stage: what the definitions decide
• 5.3 Accelerated or standalone: does a claim shrink your life cover
• 5.4 Size your critical illness cover in years of expenses

Module 6: Protect your income if you cannot work

Learn how disability income insurance works, which policy definitions decide whether it pays, and what CareShield Life and its supplements cover for long-term care. Then map your own income protection.

• 6.1 Disability income insurance replaces a monthly pay cheque
• 6.2 Own occupation, deferment and benefit period
• 6.3 Long-term care: CareShield Life and what supplements add
• 6.4 Map your income protection and its gaps

Module 7: Buy, switch and review without getting burned

You will learn how advisers are paid and what they must tell you, why replacing a policy usually costs you, what to do if you were mis-sold, and when to review your cover. Then you write your household insurance plan.

• 7.1 How advisers are paid and what they must tell you
• 7.2 Why replacing a policy usually costs you
• 7.3 Free-look, complaints and what to do if you were mis-sold
• 7.4 When to review your cover as life changes
• 7.5 Write your household insurance plan and adviser brief

Frequently asked questions

How long does the course take?

About seven hours of lessons and exercises. Most exercises use your own policies, so gather your policy documents before you start.

How is this different from Read the fine print and The Singapore personal finance system?

This course explains how each product is priced and how to size and choose your cover. Read the fine print: payslips, statements, policies and contracts teaches you to read the documents you already have, and The Singapore personal finance system, end to end covers the basics and gives you a gap list.

Will the course tell me which policy or insurer to buy?

No. It shows you how to work out what you need and how to compare what you are offered. It does not recommend any insurer or product.

Is this financial advice?

No. The course is education and does not replace financial advice. Premiums, limits and scheme rules change, so check current details with MOH, CPF, MAS and your insurer, and speak to a licensed financial adviser about your own situation.

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