Types of insurance every smart, fresh graduate must have

Types of insurance every smart, fresh graduate must have

Are you a graduate who has started earning and has been advised to buy insurance? While some fresh graduates overlook the importance of having insurance, others end up buying policies that they don’t need.

Typically, a significant amount of salary that fresh graduates earn turns into disposable income. Buying a cool DSLR and that trendy Louis Vuitton dress may seem exhilarating, but what about a secure financial future? One of the most disconcerting aspects of adulthood is realising that everything does not work as per your wishes. Since problems don’t warn you before arising, it is imperative to start planning for a secure future from a young age. And, since insurance is a protective financial tool, it must be a part of your financial plan.

Now, buying insurance can be a task, especially if you are unaware of the products on offer. To prevent paying for inappropriate coverage, it is best to understand types of insurance for fresh graduates. Here’s a brief guide on insurance covers that are the best fit for fresh graduates.

Life Insurance

Life insurance is an important coverage for those with dependents. Not all fresh graduates need life insurance as most of them don’t have anyone relying on them. But, in case you are the only breadwinner in the family, then this cover is essential. Life insurance provides a cash payout to beneficiaries in the event where anything unfortunate happens to you. There are two types of life insurance – term and whole life insurance.

Term life is a pure life cover, where all your premiums go into coverage, and there is no cash component to it. In the case of death, your dependents need not suffer a financial crisis as they are protected by the coverage. Whole life insurance is a mix of life cover and savings. A part of the premiums go toward investments. Since this plan acts as a long-term savings tool and is also affordable, it is quite appropriate for fresh graduates.

Hospitalisation and Surgery Coverage

No one likes to be hospitalise, but unfortunate events don’t knock on your door before occurring. Being hospitalise means parting with a huge share of your earn money. Even if you have the habit of saving, hospital and medical charges may still take a toll on your finances. Now, you may argue that you are already covered by the mandatory MediShield plan. But, is that enough? Despite being protected by the government, it is wise to buy a private Integrated Shield plan. An Integrated Shield plan acts as an upgrade to your compulsory hospitalisation cover. By being protected under an Integrated Shied plan, you can avail services of the best hospitals. It offers a wider choice of wards, and you can receive the best treatment without having to shell out a single dollar from your pocket.

Critical Illness Cover

As young graduates, who have just started their career, your ability to work is your biggest asset. Thus, being healthy is imperative to achieve your dreams. Unfortunately, there is no guarantee that you will never encounter any health issues. And, chronic health issues like cancer and diabetes demand ongoing medical care, as well as money. If any such health issues strike you, you not only lose the ability to work until you recover, but also have to incur hefty medical charges. Death is cheaper than encountering health conditions in Singapore. Hence, a critical illness cover is vital to prevent you and your family from going into a financial doom. It helps cover costly bills and also compensates for the lost income.

Disability Insurance

How can you afford a living if you suffer a disability? The answer is through disability income coverage. Tragic events like accidents and chronic illnesses can lead to disabilities. As a result, you are unable to work for a specific period. This not only leads to income loss but also causes a financial burden. Disability income cover can save you from financial issues at such times. Disability income provides a monthly payout to policyholders who are unable to work for a period of time. It is recommended to have other health insurance coverage along with disability income to help you pay for your medical requirements.

Renters Insurance

The importance of having a home insurance is well-understood when purchasing a property. However, when you rent, the importance of renters insurance is often overlooked. One of the reasons behind it is the lack of awareness about the availability of such insurance. In Singapore, renters insurance is usually referred to as Home Contents insurance or other names as given by the insurance company. Many graduates stay on rent as they don’t have the budget to buy a home. Imagine a natural calamity occurs that destroys your rented home and your belongings. While the house may be covered by the home insurance (which is bought by the landlord), it won’t cover your cherished possessions. Renters insurance protects what you get into the dwelling. It offers protection to assets like your furniture and electronics. Having renters insurance can prevent financial issues due to loss of property.

In an unpredictable world, it is crucial to secure yourself with defensive tools. These insurance for fresh graduates can enhance your financial plan and take on you on a path to financial independence.


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