Here we are, at the cross roads of our young, innocent lives.
All those years of schooling have finally come to an end, along with all the tests and exams and all other impractical measures of aptitude.
We are about to foray into workforce – for the first time in our lives. This means income, freedom, and most unexpectedly, this means responsibility.
With median fresh grad salaries hovering around the 2.5 – 3 k mark, and with most fresh grads not having much other financial commitments, this means a large amount of that translates to disposable income. Read: Handbags and cool gadgets.
While it may be quite exhilarating to finally own that Hermes or pick up that new DSLR, now would be a good time to start building your financial foundations. Here are the 3 best plans that every fresh grad can afford, and should get started with.
1. Hospitalization Plan (aka Shield Plan)
This is the holy grail of all insurance, and this really doesn’t cost much but would be one of the best purchases you can ever make in your life. Dying is cheap compared to falling sick in Singapore, so a shield plan should be the first plan you should get as a fresh grad.
There are 5 insurers that offer Integrated Shield Plan upgrades that supplement what our dear CPF board has already provided for us, and we highly recommend that you upgrade your shield plan to the best that money can buy.
You can choose the best hospitals and receive the best treatment, stay in the best wards – all without having to pay for a single dollar of those bills. Don’t even hesitate.
2. A Term Plan with Critical Illness Cover
For every 10 people other there being approached to buy insurance, 8 of them will loudly proclaim that they “have no money”. Its a fallacy that insurance is expensive, and we have proven it many times over. As a fresh grad, the second best plan you can buy is a term plan that also gives you critical illness cover.
First of all, its cheap and it gives you a sizable amount of cover right off the bat.
Secondly, it allows you to access critical illness cover – which is more essential than death cover because its unlikely that anyone is financially dependent on you right now, but having critical illness cover gives you the money for treatment and also a financial buffer to set you back on track.
Thirdly, its a great way to get your feet wet when it comes to purchasing insurance. You can get to experience first hand what are the policy documents involved, the terms and jargon, and the experience of dealing with your agent.
Just remember, we are providing this advice at no cost to you, neither do we provide from any sale or non sale of insurance products, quite unlike agents who have a vested interest in your purchase. You do the math.
3. A Whole Life Plan
The third best plan you can obtain as a fresh grad for very little cost is a Whole Life Plan. Because of your tender age, it tends to be pretty affordable (setting aside 50 -100 bucks a month is plenty). The aim of this plan is not so much for coverage (the term plan takes care of that), but more so as a flexible long term savings tool.
As you advance your career, your income will increase and you will hardly feel the pinch of this Whole Life Premium anyway. What it does for you is to start the ball rolling for a long term savings plan (say after 15 – 20 years) that you can withdraw the cash proceeds if you wish.
If there is no need for that cash after 20 years or so, just carry on with the policy as its coverage and cash value will continue to grow year on year, long after you fully paid up the premiums.
These are the 3 best insurance plans that every smart fresh grad should obtain. They are cheap, useful, and have a place in cementing your financial stability into rock solid territory.
What are you waiting for? Do your comparison, make your selection, and take action right this moment.
Do you know of any other plans to get as a fresh grad? Let us know in the comments below!
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.