Don’t buy endowment plans
Firstly, they aren’t cheap. Mine is $70 a month.
I bought one years back only to realise that you only break even after 20 years. But being naive back then I thought it was a good way to save. It isn’t. I’d much rather put it in the bank or to invest it where I can liquidate in a short time.
Get what you understand
Sometimes we get confused by complicated products from the agents and after buying it for a few years, we might not even remember what we bought. So how do we claim if we can’t remember exactly what it is ?
Do not spend more than 1% of your income on insurance
I stick to this advice even now since I have better use of my money than to spend it on something which I may not even need every month.
What is the minimum we should get
If you are not earning an income, DO NOT get any insurance at all. You might not be able to pay the monthly premiums ( unless someone pays it for you ) when times are tight.
If you are working, get DEATH & DISABILITY ( we all die eventually ), CRITICAL ILLNESS cover, MEDISHIELD ( pay with CPF ) and ACCIDENTAL cover ( bonus if you are killed in an accident ).
As for coverage, get something which you feel comfortable to afford and not the 10 years of income as suggested by insurance agents as I feel that is overrated. Do not go for ILP unless you are not planning to invest on your own because insurance companies would need to take a cut of your investment money to pay the managers as well. If you feel it will keep you disciplined or you wish to do dollar cost averaging you can still go for ILP but bear in mind ILP premiums tend to be higher than the usual insurance coverage ( at least $100 per month ).