How much insurance is enough?

I cannot stress how important insurance is.

Had a friend coming to me the other day telling me that his company sells the best Whole of Life (WOL) insurance product. For your information there are others such as Investment Linked Policies (ILP), Term Plan, Savings Plan etc.

That said, there are no “best”, so to speak, products. Products change all the time and the pay-out values you signed for will eventually be outdated. Just make sure to update your insurance plan regularly with your insurance agent.

Simple one on how much is enough

Minimum $300,000 on critical illness. A dead person does not burden his family as much.

Rationale: $100,000 to settle immediate medical bills and short-term subsistence. Remaining $200,000 into investments.

Explaining the $200,000:

At a conservative 3% annual interest on your investment, you get $500.00 monthly for lifetime. Most definitely sufficient for subsistence.

Lastly, the above is for singles like me. A breadwinner’s problems has different dimensions. Prioritize accordingly and determine what you need based on simple calculations. You do not need an insurance agent to do that.

I repeat, minimum $300,000 on critical illness.


  1. Jacky

    A more accurate method to know how much an individual needs for Critical Illnesses (Dread Illnesses) coverage is:

    $100,000 + ($Annual_Income X 5 Years) = $Minimum_Critical_ Illnesses_Coverage_Needed

    $100,000 like Keching had explained, for short term subsistence and immediate medical bills.

    Why 5 years? Its either you can get well after that based on statistic, or you will get done with. The $Annual_Income is to determine your lifestyle.

    So if you have that amount of coverage, you would be able to afford NOT to work for the next 5 years and not worry a single thing about decreasing your lifestyle financially.

    Just my 2 cent worth~

    Great Eastern

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