The following is my answer to a Quora question: “What are the top three life insurance policies you can recommend?”
I am speaking strictly from a Singapore perspective, although I believe the general principle may be applied elsewhere. There are three types of insurance plans that form the foundation of our liability mitigation.
Firstly, it is important to have a good hospitalisation plan. If you can afford it, get the highest tier of coverage, and get it as early as you can. Hospitalisation plans are multiple claim, and are for life. Having a pre-existing condition because you did not get a plan early enough means getting saddled with large hospital bills later.
Secondly, it is important to have a good accident plan. Like hospitalisation plans, they are multiple claim. There is also an option that pays you something for the duration of your incapacitation, or a period thereof.
Finally, the third plan to get is a whole life plan with disability and critical illness coverage. These plans can get expensive, but it is good to start with one, even a cheaper plan, and then add to the coverage as your earning capacity improves.
Terence Kenneth John Nunis
[Shared with permission from: https://terencenunisconsulting.blogspot.com/2020/05/quora-answer-what-are-top-three-life.html?m=1 ]
Though I agree with Terence in principle, I must add that client’s circumstance is still the main factor of consideration.
That is often when I would recommend a Term insurance plan instead of a whole life plan.
I would recommend a Personal Accident plan that is customisable to tailor to specific needs and concerns.
It should also be noted that this post merely addresses financial protection needs, without factoring in wealth accumulation needs such as retirement planning and child education planning.
With which budget could be a concern; the overall financial planning has to be adjusted accordingly.