What the expert says
MOST people are familiar with life insurance plans that cover the risk of premature death, as well as health insurance policies that cushion against hospitalisation expenses.
But many tend to overlook personal accident coverage, said Pauline Teo, executive financial planner for financial services at Manulife Singapore.
Here is Ms Teo's advice on getting protected against accidents.
ACCIDENTS CAN HAPPEN ANYTIME
Accidents can happen to anyone, anytime and anywhere.
The chance of a mishap happening may seem remote but it could happen at a time when we least expect it.
So, how do we ensure that we and our loved ones are financially ready to handle such situations should they arise?
GET PROTECTED WITH ACCIDENT PLANS
After you have addressed your basic insurance needs, you should consider having a personal accident plan in your insurance portfolio.
If not, you may not be adequately covered in certain aspects of your financial planning.
A personal accident policy can cover the financial losses you might suffer as a result of losing mobility, suffering a disability that affects your earning ability, or even loss of work arising from an accident for a period of time.
In addition, a personal accident plan can complement your life insurance at an affordable premium.
Manulife's mBreeze, with premiums of less than $1 a day, allows you to have peace of mind if an accident occurs.
Unlike life insurance, personal accident insurance premiums vary with your occupation, rather than your age.
Broadly, there are three classes of occupational risks. Class three means your job's daily duties and responsibilities are subjected to a higher risk.
CLAIMING FOR WESTERN AND CHINESE TREATMENTS
In the event of an accident in which you sustain injuries, you can claim reimbursement under your accident plan for Western medical treatments, traditional Chinese medicine treatments or for a visit to a chiropractor.
A personal accident plan can help to pay for your medical bills up to a certain limit, depending on your plan's coverage.
It also helps to lessen the financial impact of an accident because it offers weekly indemnity benefit payouts to tide you over should you be unable to work for a period of time.
SAVING UP FOR THE FUTURE
As Mr Teo leads a very active lifestyle, he knows the importance of a personal accident plan. It is good that he already has some retirement plans but to further increase his retirement income, he needs a diversified investment portfolio.
Regular savings through insurance plans can help him prepare for his future. It is also important to make his money work harder through investment plans.
Without factoring in inflation, a yearly $3,000 holiday for two will cost $75,000 over 25 years.
As Mr Teo wants to lead a simple life and travel regularly when he is able to get someone to run his business at the age of 45, he can consider ManuWealth Secure, an endowment plan that is 100 per cent capital guaranteed upon maturity.
He can choose to pay premiums over two or five years, with a wide range of policy terms: 13, 15, 20 or 25 years.
Starting from the end of the chosen premium-payment term, he will receive a yearly guaranteed coupon equivalent to 5 per cent of the sum insured until the maturity of the policy.
The yearly cash coupons can be used for his holidays or he can put these additional funds into his business.
If he doesn't need the coupons, he can choose to deposit them with Manulife to earn an interest of 3 per cent. Whether he decides to spend or save further, the choice is his.
For more information on retirement solutions, visit www.manulife.com.sg or call 6833-8188.