I still remember quite distinctly my first paycheck after starting work as a fresh graduate.

It wasn’t exorbitant, but at the time it seemed like a lot; in fact, it was more money than I’d ever been paid before.

Having this amount of money suddenly appear in my bank account opened up a whole world of possibilities.

Now I could say goodbye to scrimping with my orders at the caipng stall and had the ability to buy some items that I had been eyeing for a bit. I could even afford to start taking the taxi after hanging out with friends at night, in lieu of a long bus ride.

It also wasn’t long before some other realities hit — now that I was earning my own keep, it was time to forge a greater sense of financial responsibility.

That’s when I had to learn to budget, spend within my means, and ultimately save. I must admit none of this came intuitively to me.

And when it came to the process of adulting, one thing came up repeatedly in the advice I was receiving from older and wiser folks: “Start looking at getting insurance”.

The logic went that as much as I could, I no longer wanted to rely on my parents to provide me with financial stability and that having some insurance could help with that both now and in the future.

But insurance doesn’t always feel that straightforward. There are loads of different policies out there, each serving a different purpose.

Complicating the matter is the fact of premiums — the amount of money that you pay each year to maintain your insurance policy — that you’ll have to deal with. There are no two ways about it, taking up an insurance policy is a financial commitment.

So how can you balance financial responsibility while still enjoying the now?

Here are some tips to help guide you:

1. Think about what you can afford

Ok, this might seem super obvious but for the benefit of those who may be similar to me, here’s some advice: actually sitting down to look at your finances and properly planning for how much you can spend and save each month is really important.

Not only does this stop you from living beyond your means, but once you’ve worked out these parameters, then you can really make responsible and logical decisions when it comes to finances.

There are no hard rules, but a fast one (and probably a good starting point) is the 50/30/20 principle.

Basically, this states that 50 per cent of your pay should go to needs, 30 per cent to wants, and 20 per cent to savings or paying off debt.

The rule is a general one, so feel free to make adjustments according to your own goals and lifestyle.

When you’ve made the calculations for how this applies to you, then you can start figuring out how much you can afford to spend on insurance premiums.

2. Think about whether you can afford NOT to have insurance

For all the planning and calculations that we talked about above, it’s important to remember that life doesn’t always go according to plan.

It’s a well-worn cliche but while you hope that you never have to make claims on certain policies, insurance can offer great comfort and peace of mind.

For example, no one ever plans to get into an accident or to contract a serious illness, but you’ll want to be prepared and able to handle the medical costs if you ever find yourself in the middle of such a situation.

Some of these plans also provide you and your family with something to live off, if you are unable to work — or in the worst-case scenario if you are no longer around.

There are a few different kinds of insurance policies that are purpose-built for situations like this, and it’s worth considering them even if you feel young and healthy today and think that you do not require insurance.

This is because today’s young adults could very well find themselves in a situation where they are responsible both for their ageing parents and a young family – known as the “sandwiched” generation.

The increase in life expectancy means that while seniors tend to live longer, working adults will want to make sure that their parents can be cared for in the unfortunate event that the former is no longer around to look after the latter.

A 2021 report by Etiqa also shows that 3 in 4 millennials tend to overestimate the cost of insurance with 1 in 2 thinking that premiums cost up to 4 times the actual cost.

While costs do vary with the applicant’s age and health conditions, the average cost of insurance is actually much more affordable than you thought.

Etiqa’s Essential term life cover, for instance, protects against death and terminal illness from as low as S$0.38 a day for S$1 million in coverage. (Premium is illustrated based on a five year renewable term plan for a male aged one year, non-smoker and a sum insured of S$1,000,000.)

That’s pretty good value for being able to have the peace of mind that your family and loved ones can carry on with their lives even if something unforeseen happens to you.

3. Think about what you actually need

As we pointed out earlier, there are all sorts of insurance policies with all sorts of premiums that you’ll have to pay.

However, when you get down to examining each one, it’ll become clear that some are a lot more relevant to you at certain life stages than others.

If you’re just starting out at work, having basic policies for protection against the costs associated with hospitalisation and accidents might make sense.

Once you’ve been working for a few years and have more disposable income, you can then start considering savings or investment plans for your wealth accumulation needs.

If you’re getting married and buying a house, then home and content insurance, or maybe even life insurance to protect yourself and your loved ones start to become more pertinent.

The point is that coverage is an ongoing concept that evolves with different needs and changes in lifestyles and life stages.

This means reviewing your policies is something that you’ll probably want to do every now and then.

A good place to start would be with Etiqa who have been protecting Singaporeans since 1961.

Committed to the idea of “humanising insurance”, Etiqa strives to take care of customers in the long term.

This means that they believe in the importance of human touch in understanding their audience's needs, emotions, and behaviour.

Visit here for more information on Etiqa and their suite of protection solutions.

This policy is underwritten by Etiqa Insurance Pte. Ltd (UEN: 201331905K).​ This content is for reference only and is not a contract of insurance. Full details of the policy terms and conditions can be found in the policy contract.​

As this product has no savings or investment feature, there is no cash value if the policy ends or if the policy is terminated prematurely. You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you. The information contained on this product advertisement is intended to be valid in Singapore only and shall not be construed as an offer to sell or solicitation to buy or provision of any insurance product outside Singapore.

​This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the Life Insurance Association (LIA) or SDIC websites (www.lia.org.sg or www.sdic.org.sg).

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Information is correct as at Apr. 7, 2022.​

Working on this Etiqa-sponsored article reminded the writer to pay his overdue insurance premiums.

Top image via Unsplash