Insurance is Part of Financial Planning


Note: I am a strong believer of insurance but not insurance linked investments/savings (or however they name it). I would like to believe that I can invest my own money better 🙂

What are your thoughts on insurance? Do you actively find out about how to best insure yourself and your loved ones? Or do your insides shrink up at the mention of “insurance”, as you avert your gaze and try to find a way to avoid this subject?

I used to belong to the latter group, until I started on my financial freedom journey several years ago. The more I educated myself, the more I saw insurance as a form of financial planning as well, and a few recent experiences served to affirm this. They are actually quite personal, but I decided to write about them because I wanted to share the importance of insurance with all of you – people who have a similar goal as me of one day achieving financial freedom.

Importance of insurance
Last July, my mum was diagnosed with late stage pancreatic cancer.

Initially, doctors (we consulted two independent doctors from different hospitals) essentially said that she had between nine months to 1.5 years left because the tumor was too large to be operated on. All she could do was undergo chemotherapy treatments until the tumor became small enough to operate on.

It involved lots of hospital stays, treatments, and the medical bills just piled up.

The good news is that she is still on the road to recover because miraculously, the tumor shrank with the treatments and she underwent an operation earlier in February this year to remove the tumor.

However, just as we breathed a sigh of relief over the good news of my mum’s recovery, my dad was diagnosed with cancer – early stage colon cancer. Fortunately, his prognosis was optimistic as the tumor was still small, and he could be operated on almost immediately without much complications.

While these were uncontrollable unfortunate events, I did the one controllable thing which was purchasing adequate hospitalization plans for the both of them many years ago. It was a huge relief I did, because I shudder to think of the medical bills we would face without insurance to cover them.

It was also fortunate that I bought the first dollar plan for both of them, which basically meant that everything from the first dollar was claimable. In fact, for many of the expenses, SGH directly dealt with Great Eastern without us having to pay upfront first most of the time.
(Note: It seems that the first dollar plan is no longer available. The norm these days seem to be a minimum co-payment of SGD3,500 or 5% of the bill, whichever is higher)

Importance of a good insurance agent
Another thing that I realized was the importance of having a good insurance agent that you can trust and rely upon. This is particularly important to me since I am working and living in Japan while my parents are in Singapore.

In fact, my insurance agent (who also happens to be my army buddy), Xavier Ang, was the first to know about my mum’s condition because he was the one who accompanied my mum to the hospital before my mum was diagnosed with cancer. Xavier was also the one who volunteered to help my dad with admission administrative work for his surgery.

Not only did Xavier take care of and process all the claims for us, he also patiently answered all kinds of questions my family had because it was so tough for us to keep track with so much going on. While some might say that this is expected of insurance agents, I am immensely grateful for Xavier’s reliable and unwavering presence that helped us through the difficult times. I cannot express enough how glad we were that we didn’t have to worry about administrative matters on top of everything else.

When things settled down, I decided to review my own insurance plans (and subsequently added on more adequate coverage), because I felt I was at high risk since both my parents contracted cancer.

Of course, what I went through is quite rare, I hope, but what I want to say is: review and understand your insurance plans, and decide if they are sufficient for the needs of you and your family if anything happens. No one wants bad things to happen, but that is what insurance is for; to protect you in case they do.

This is one of the lengthiest posts I’ve ever written, only because it is extremely close to heart and I wanted to share this important experience. If nothing else, I hope this post helps you to re-evaluate insurance and the part it has in your financial planning!


  • I went through the same this year, when my mum got diagnosed with breast cancer. Fortunately, I did a review with them back in about 2015, and found out they did not have much insurance, apart from an endownment and one whole life policy. Having signed up for the medical insurance then…. the costs my mum had to pay was quite manageable – I can’t imagine what would have happened if we weren’t covered… I would think I would have been forced to liquidate a portion of my holdings.

    So yes I agree with insurance as a form of “hedging”, but I would still steer away from the savings / investment / retirement part because the fees are high, and they keep adding on this death coverage… which to me is really a needless cost… like how much death coverage do we need to be covered through all the different products? To the point where I feel it becomes overselling so we can feed the insurance agents.

  • Hi Evan, thanks for sharing your story. There are plenty of lessons to be learned from your experience.

    I am now managing my family’s portfolio of insurances as well! For my partner, I also continue to share articles of people’s experiences so that she can learn from their planning (or lack thereof) to better protect herself.

    The last thing we want to see would be to be in a cash deficit situation or the need to liquidate our portfolio for expenses incurred in relation to H&S or illnesses. That is why I am also a firm believer in protection first and investing second.

    Am glad to hear both your parents are recovering well (or for that matter, have recovered fully). Cheers!

Evan Koh



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