Insurance for Young Working Adults: 3 Essential Plans to Start With

As an insurance adviser, I have met many young adults standing at the very beginning of their working lives. The story that follows is inspired by many of them, and perhaps a little from our own journeys too. This article focuses on young working adults in Singapore and the essential insurance plans they should consider starting with.

On a personal note, I would like to dedicate this article to the many strong & courageous family members, friends, and strangers-turned-friends I have crossed paths with, who have silently yet resiliently battled life’s unexpected turns.

This is also a tribute to friends I have lost far too young, but whose spirit I carry with me each day.

Perhaps, this is why this story and topic feels all the more familiar to me. Because like many of us, she once believed that life would unfold exactly as planned.

What’s it like graduating and entering the working world?

As she stands side by side with her course mates in the school auditorium, the taste of late-night studying and graded assignments finally coming to an end is sweet beyond belief.

‘Congratulations on your graduation, batch of…!’

She did it. She’s finally done and dusted with the education system as she knows it. Now she’s on her way to becoming a full-fledged adult, eager and bright-eyed, ready to explore what the future holds for her.

Surely only good things.

• Fulfilling work with a great boss and team.
• The freedom and spending power of ‘adult money’.
• Everything she once watched from afar and quietly envied in those who went before her.

Almost like clockwork, she gets down to it.

• Updating her résumé.
• Endless job applications.
• Some met with silence, others with rejection.
• And then, she got it. The job!

She thought nothing could beat the feeling at graduation, until she saw her first salary credited into her bank account.

But the high didn’t last long. Reality set in, and the questions began.

What should she save? What should she spend? How should she plan her finances?

This was the part no one looked forward to, the woes of adulting.

And then came the word that felt so much more daunting than she expected.

Insurance.

Planning for the unexpected. For the parts of life that no one sees coming or wants to think about. After all, most of us expect life to unfold the way we imagine it will.

But the wealth of information available online only makes things more confusing.

A quick look into the subreddit r/SingaporeFI is enough to send her spiralling into decision paralysis, threads filled with people unsure about the policies they bought or regretting decisions they barely understood.

So where should she even start? How does she go about buying her insurance as a newly minted working adult?

The Role of Insurance in Your Financial Plan

We all play different roles in our families, and each role comes with different responsibilities.

• Some of us may be single with no dependents.
• Some may have retired parents who rely on us for financial support in their silver years.
• Some may be engaged, waiting for our BTO flat to be ready.
• Some may be married and preparing to welcome a little one into the world.

But one thing is certain. None of us are immune to life’s uncertainties.

Insurance is simply a financial safety net against life’s unexpected events that could disrupt our financial plans.

Insurance protects against two main risks for young working adults in Singapore:

1. Loss of income during your working years

If something happens that prevents you from working, insurance ensures that your financial commitments and your family’s future are not jeopardised.

2. Large medical expenses

Serious illnesses or hospitalisation can quickly drain your savings and derail long-term financial goals.

So, is there a one-size-fits-all solution? Of course not.

But if you’re looking for a simple, fuss-free starter pack, here are three building blocks to start with.

(A) Integrated Shield Plan

First and foremost, it would be wise to do a thorough check of your existing insurance policies. More often than not, most people already have a hospitalisation policy, known as an Integrated Shield Plan, that their forward-thinking parents bought for them when they were younger.

This policy helps to cover hospitalisation bills, including inpatient stays and certain outpatient treatments such as kidney dialysis or cancer treatment. Review whether your current Shield Plan is aligned with your healthcare expectations and consider whether you would like to add a rider to reduce out-of-pocket costs.

(B) Term Policy

Next, consider a term policy with Death and Critical Illness coverage until age 65.

This ensures that you do not leave financial liabilities behind for your loved ones should something happen during your working years. It also helps protect your family’s standard of living if your household income is suddenly lost.

In essence, this coverage replaces the income your family would have relied on during your working years. This may include living expenses for a surviving spouse, children, or even elderly parents in their retirement years.

If you’re at a stage where you don’t yet have dependants or major liabilities, this can be seen as future-proofing your coverage while locking in premiums at your current age and health status.

(C) Critical Illness Coverage

These days, we’re increasingly exposed to many stories of young adults being diagnosed with a critical illness. Some of us may even know someone whose life has temporarily been put on hold while battling an illness.

Recent data shows that among those under 40, cancer diagnoses have increased by 34 per cent when comparing the 2019–2023 period with 2003–2007. This worrying uptrend is driven by a multitude of factors, including environmental exposures, birth cohort effects and improved early detection.

Critical Illness coverage provides a lump sum payout upon diagnosis, giving you financial breathing room while you focus on treatment and recovery.

This payout can help replace lost income, tide over ongoing essential expenses and provide a buffer for medical costs or lifestyle adjustments during a difficult time. It also allows you to focus on navigating treatment and the emotional challenges that may come with it, instead of worrying about financial uncertainty.

After all, battling a critical illness may only last a season of life. When that chapter ends, we get to pick up where we left off, continuing to pursue the milestones and financial responsibilities we hope for, whether it is settling down, travelling or building a home.

Since you’re still young, you may also consider getting multiple or recurring critical illness payouts. This ensures that even if another critical illness occurs later in life, you continue to have financial protection.

Closing Words for Her

Insurance can be scary to think about because it forces us to consider possibilities we would rather avoid. But it doesn’t have to be complicated or feel like we’re paying through the nose every year for it.

• Start simple
• Keep it affordable
• Build with intention

This is aligned with Havend’s philosophy when it comes to insurance:

“Buy as much as you need, but pay as little as you can.”

After all, insurance is not meant to be an investment strategy or a way to profit. It is a safety net, one we hope we never have to use, but one that we are grateful to have for ourselves and our family should life take an unexpected turn.

Quick FAQs

Q: At what age should I start insurance as a working adult in Singapore?
A: Ideally from your first job or early 20s to lock in lower premiums.

Q: Which insurance is most essential for young adults?
A: Integrated Shield Plan, Term Policy, Critical Illness and Disability Income coverage are the core building blocks.

Q: Can I adjust coverage as I age?
A: Yes! Your insurance can evolve with your financial responsibilities and life stage.

This is an original article written by Joanne Seow, Insurance Specialist at Havend.