Your Concise Guide to Insurance Terms

Represented by a policy, insurance is a contract in which an individual or entity receives reimbursement or financial protection against losses. It is a cushion against the risk of financial losses that may result from the damage to the insured property or injury caused to a third party. The company pools clients’ risks to make payments more affordable for the insured.

That being said, here are some terms that you must familiarize yourself with.

1. ACCIDENT

An accident is an event which occurs by chance. It is unforeseen, unexpected, and unplanned. This results in injury and property damage, which can be covered by the insurance.

2. ADDITIONAL INTEREST

Additional interest refers to the individual, partnership, or corporation other than the actual named insured. This individual, partnership, or corporation has an insurable interest. For instance, adding an employer’s name to an employee’s policy for the company car.

3. APPRAISAL

Appraisal is an estimate of property value or the extent of the property damage. Appraisals are provided by the authorized persons and are performed to determine the value of the property at the time of loss.

4. BENEFIT

The basic principle of insurance is that an individual should not end up in a better financial or physical state because of a loss. Hence, a benefit is partial compensation for lost wages or disability.

5. CANCELLATION

Cancellation is the termination of an insurance policy before the end of the stated period. There are three ways in which cancellation can take effect. These are namely: to surrender the original policy by the insured, to write a notice to the insured by the company or agent, or to sign a “Lost of Policy Release” by the insured.

6. CLAIM

The claim is a request for indemnification or compensation. A first party claim refers to the request for indemnification due to a loss involving only the insured and his or her insurance company. While a third-party claim refers to the indemnification of a loss by someone other than the insured for the damage alleged to have been due to the insured.

7. DEDUCTIBLE

The deductible is the amount a policyholder agrees to pay before the insurance company covers a loss. The insurance company pays the balance of the loss up to the limits of the policy.

8. DEPRECIATION

Depreciation is the allowance taken for age, wear and tear, and obsolescence of any item. The depreciation factor is applied to the replacement value at the time of the loss and not to the original cost of the item.

9. ENDORSEMENT

It is a printed or otherwise written statement attached to the insurance policy to alter, delete, or add coverage, terms, or provisions. Changing circumstances usually require that alterations be made to an existing insurance contract.

10. PREMIUM

Premium is the amount of money an insurance company charges in return for providing coverage at a specified length of time. There are distinct types of premiums such as the additional premium, earned premium, gross premium, and minimum premium.

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When it comes to insurance, there are many terms, words, and phrases that you should know. Use this list of insurance definitions to better understand what each term means.

Sources: 1, 2, & 3

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How to Save Money on Healthcare in Singapore

When it comes to healthcare costs, we are wired to believe that things cost the way they do. If you have an insurance provider, chances are, you are paying a premium on a regular basis. If you are uninsured, you might be avoiding visits to the nearby clinic or hospital.

You can still save money on healthcare! To get the most value for your dollar, follow these money-saving tips.

#1: PRACTICE PREVENTIVE CARE

Do not get sick! One of the best things you can do to limit your healthcare costs is to establish a healthy routine that incorporates good nutrition, regular exercise, and stress management. Choose a wellness routine that works for you. When you nourish your body and spirit, you can have a meaningful impact on your future health and prevent healthcare costs.

#2: SELECT A SUITABLE HEALTH INSURANCE

Health insurance aids you in paying for your medical expenses when you get sick, get injured, or become disabled. Although all Singaporeans and Permanent Residents are covered by Medishield Life, you may face some restrictions to your uses and claims. Payouts correspond to the prices for the Class B2 and C wards in public hospitals. So, you must be prepared to pay a large amount of money if you want to stay in a Class B1 or A ward. You can combat this by enhancing your health insurance coverage with an Integrated Shield plan.

#3: OPT FOR GENERIC MEDICATIONS

Brand-name medications are more expensive than generic brands. From a medical standpoint, previous literature has shown that generic medications seem to perform in the same manner as brand-name medications. Instead of poking a hole in your pocket, you can opt for generics to reap its benefits.

For instance, you can pay S$11.50 for 100 tablets of Paracetamol (500 mg) instead of paying S$10.50 for 20 tablets of Panadol.

#4: DROP BY YOUR LOCAL PHARMACY

For mild conditions, you can visit your local pharmacy to ask for advice. According to Unity’s website, their pharmacists can assist you with advice on minor ailments, medication concerns, travel medication, and so on.

For instance, you can consult their pharmacists if you have questions on your medications for your constipation. If you are experiencing mild ailments such as constipation, you can skip the clinic queues and go straight to the pharmacy. However, you must see a doctor if you are certainly unwell.

#5: SCREEN FOR LESS

Screen for Life is a national screening program that encourages Singapore Citizens and Permanent Residents to go for regular health screening. Singaporean citizens only need to pay S$0 to S$5 per screening visit*. While Permanent Residents can check with their CHAS GP clinic on the screening test rates offered under the said program. The doctor consultation will be charged accordingly by the respective CHAS GP clinics.

Note: *Rates apply only at Community Health Assist Scheme (CHAS) General Practitioner (GP) clinics

#6: GO TO THE NEIGHBORHOOD POLYCLINIC FOR AFFORDABLE DENTAL CARE

If you are looking for a dental option for regular check-up and oral maintenance, search no further than the neighborhood polyclinic. Neighborhood polyclinics offer subsidized dental treatment and care. Both SingHealth and National Healthcare Group polyclinics have dental services, and it is easy to make an appointment online.

Recommended: 5 Most Affordable Dental Clinics In Singapore

Alternatively, you may utilize the company dental and health screening benefits. Check with your employee handbook or ask your Human Resources department to know which medical benefits you are eligible for.

#7: FREE VACCINATIONS AT POLYCLINICS FOR INFANTS

The National Childhood Immunization Program offers immunization against certain diseases, which are fully-subsidized. Full subsidies* for vaccinations under this program are available for Singaporean children at CHAS GP clinics and polyclinics.

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Note: *This is applicable for certain vaccine brands. Refer to go.gov.sg/vaccine-list for the list of the latest subsidized vaccine brands.

Sources: 1, 2, 3, & 4

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Consideration of Car Insurance When You Need One

Unlike practically everything else in the world (even vehicles!) where it’s quite straightforward to comparison-shop for the cheapest costs, car insurance is a hard one since pricing for premiums are provided on a case-by-case basis. On top of that, not every insurance would divulge their costs easily or offer you a price online.

When it comes time to renew or get auto insurance, it makes perfect sense to use free internet resources to compare rates.

In Singapore, How Much Does It Cost To Insure a Car?

Need to get a Singapore car insurance? A year’s worth of coverage might cost anywhere from $700 to $1,000 — or even more! — depending on your location.

Your yearly auto insurance premium is computed on an individual case-by-case basis. In general, insurers attempt to determine how probable it is that you will be involved in an accident and how expensive it will be for them to cover the costs (i.e., the risk they assume).

How Can I Get the Best Deal on Auto Insurance?

It’s impossible to alter one’s driving history, driving record, or automobile. You may, however, search around to find the greatest deal for your specific profile and vehicle. To begin, obtain insurance estimates from at least five or six different firms. With the help of MoneySmart’s Car Insurance Wizard, you can easily obtain this information.

Insuring your vehicle should not be as inexpensive as it appears. Cheap insurance is worse than having no insurance since you’re wasting your money and putting yourself at risk.

High excess (the amount you must pay ahead before the insurer begins to pay for the remainder) and/or terrible terms & conditions (i.e. you can’t claim crap since EVERYTHING is excluded) are often associated with cheap rates. Check the fine print of your policy to make certain you’ll receive the protection you desire.

Directly Through an Insurance or Through a Broker, Which Should I Choose?

Keep in mind that rival insurers may offer lower rates to attract new clients. After all, our auto insurance specialists will perform the comparison for you while you rest and enjoy your time off. In the event that your current insurance provider offers a better bargain, at least you won’t have to worry about missing out on a better deal.

You may, of course, get automobile insurance on your own if you don’t mind going over the tiny print and checking out the facts.

Various Kinds of Car Insurance to Consider

Comprehensive Car Insurance

This sort of auto insurance, as the name indicates, covers practically everything, even the expense of repairing or replacing your own vehicle. This sort of insurance is the most frequent in Singapore because of the high cost of automobiles here.

Third Party Only (Tpo) Car Insurance

This is the most basic and least expensive sort of insurance since it only covers damage to the property of others. You’ll be on the hook for repairs to your own vehicle if something goes wrong with it. Most experts advise against attempting to fix a really old automobile that has reached the end of its COE lifetime.

Third Party, Fire & Theft (Tpft) Car Insurance

An enhanced form of TPO vehicle insurance. Except that TPFT also covers your automobile for loss, theft, and fire damage. Despite the fact that it provides a little extra security, this is typically just an option for drivers of older vehicles.

  

Most insurance companies in Singapore use a $500 or $600 deductible as a baseline for their estimates. The average amount that automobile owners are prepared to spend out of their own money may be derived from this figure. When comparing auto insurance rates, it’s important to consider both the premiums and the excess. If you choose a high excess, you can save money on your premium, but are you really willing to pay $2,000 if you are involved in an accident? It’s probably not going to happen.

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6 Savvy Financial Tips for Young Adults

Managing finances can be challenging, especially when you are navigating through different conflicts such as budgeting with an entry-level salary or carrying a hefty student loan debt.

Focusing on the fundamental financial strategies will enable you to strengthen your financial position. Work towards achieving your goals and financial success with these savvy tips.

#1: ESTABLISH YOUR EMERGENCY FUND

The importance of building an emergency fund has been the subject of many financial articles. After all, it is one of the most vital financial tasks that you can accomplish as a young adult. An emergency fund is a pool of money that you can earmark for unforeseen expenses.

When unexpected life events occur, the emergency fund acts as a cushion for your finances. For instance, you can use your emergency fund to pay for expenses that come with sudden job loss or appliance breakdown. The amount that you will save depends on the stability of your job, the debts you have, and your income. Experts recommend saving about six months’ worth of living expenses. You can allot at least 2% of every paycheck to accumulate this amount.

#2: GET BASIC HEALTH AND LIFE INSURANCE

Financial literacy involves understanding how to prevent and manage financial issues as they arise. To help you deal with unexpected expenses, you may get yourself insured. Educate yourself about the different insurance products available on the market right now.

Get yourself insured while your premiums are low (i.e., mainly due to your age). If you have dependents, consider getting term insurance to protect them in the event that you become permanently disabled or you pass away.

#3: KNOW WHERE YOUR MONEY GOES

Stay on top of your budget plan by knowing where your money goes. Ensure that your expenses do not exceed your income. As you may be earning with a starting salary, keeping your recurring monthly expenses low can save you significant money over time.

Once you see how the cost of your morning coffee or take-away dinner adds up, you will realize that making small changes to your daily expenses can have a big impact on your financial situation.

#4: PAY OFF THE CREDIT CARD BALANCES

Searching for the lowest interest rates when comparing loan terms can help you save a substantial amount of money over time. You can pay off your credit card balances each month, so you do not get trapped by the interest charges. You can look for a credible expert such as a credit counselor if necessary.

#5: MAKE INFORMED FINANCIAL DECISIONS

Examine your personal needs and goals. Make informed financial decisions by studying the potential outcomes of your options. There are trade-offs between your short-term and long-term goals. For instance, purchasing a car can impact your savings for retirement.

Therefore, you must invest in items that will improve your earning abilities. You can invest in a good suit, an educational advancement, and a set of electronic devices to help you in your job hunting.

#6: LEARN SELF-CONTROL

As a young adult, learning the art of delayed gratification is easier said than done. However, personal finances are easier to manage when you have self-control.

Effortlessly purchasing an item on credit is possible, but the best step is to wait until you have saved up enough money for your purchase. Do you really want to pay interest on a pair of designer shoes?

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Please do not carry more cards than you can keep track of. This savvy tip is crucial for creating a healthy credit history.

Sources: 1 & 2

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6 Money Lessons To Avoid Being Broke

Nobody ever wakes up one morning and thinks, “I want to be broke.” A hefty loan here, a bad investment there, and a long credit card statement later – you have no idea how you landed in this state. You are living paycheck to paycheck without savings intact.

What can you do to turn the tide? Start by reading this article and applying these lessons into your life.

#1: THE POWER OF SETTING CLEAR FINANCIAL GOALS

Goals mark your direction in life. If you do not have a clear destination to work towards, it can be difficult to find the passion or motivation to save. Whether you are eyeing on purchasing a flat or figuring out how to pay off your debts, crafting a plan can get you there.

As you set your financial goals, consider making them SMART. Financial goals need to be specific, measurable, attainable, realistic, and time bound. Creating goals using the SMART method can help you ensure that you are working on an achievable goal within the timeline that you set. Stay on course!

#2: DON’T BUY WHAT YOU CAN’T AFFORD

Spending less than you make and buying what you can afford seem like simple personal finance rules. However, these are easier said than done. You can get distracted with the consumer-driven society that tempts you to live beyond your means. When this happens, a good rule of thumb is to save at least 15% of your income.

If you find it hard to save money, try paying for groceries and clothes with cash instead of a credit card. Take it one step further by using a budget per month. Withdrawing a fixed amount every month can help you to become more aware of your spending choices.

#3: EMBRACE THE FINANCIAL WORLD

The majority of personal finance lessons do not center around financial education, but on financial behavior. If you can modify your behavior with money, you can alter your financial future. Remember that you do not need to be a financial expert to prepare an emergency fund or to save for retirement. Start by building a solid financial plan and committing to it.

#4: THE IMPORTANCE OF INCREASING YOUR INCOME

Search for part-time jobs such as freelancing or dog walking to grow your income. You can take on other positions in the same company too. If you feel like you have reached the glass ceiling in your field, consider looking for new career paths to generate more income. Increasing your income can help your financial future.

#5: INVEST SMARTLY, AND NOT IMPULSIVELY

Investing is a good way to protect and grow your assets. However, the talent of wise investing does not come to us all. You may be succumbing to emotions and invest impulsively, hence you win big or lose big.

As a precaution, have an advisor who is trustworthy and credible. Research on your part is vital as well. It will give you the knowledge and confidence you need to make smart investments.

#6: BUDGET YOUR MONEY

It is understood that budgeting plays an essential role in controlling your spending, paying off debts, and staying on track with your financial goals. Creating a budget starts with adding up all your expenses for the month and subtracting that amount from your total income.

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Set monthly and daily spending limits to adjust and make up for any oversights. You can create a budget using a notebook, a spreadsheet, or a budgeting app. Use a tool with which you are most comfortable.

Sources: 1 & 2

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