Why young working adults in Singapore should get insurance early

You’ve earned your degree. You’ve landed your first job. You’re finally taking home a paycheck—and with it, the freedom to plan your own financial life. Most young professionals focus on budgeting, saving, and repaying study loans. But one essential financial move often slips under the radar: getting insured.

It may feel too soon. After all, you’re healthy, single, and just starting out. But in Singapore, the cost of waiting can be much higher than the cost of getting covered now. Let’s break down why early insurance matters, how CPF fits in (and doesn’t), and what types of protection actually make sense for young working adults.

Singapore’s Central Provident Fund (CPF) is designed to help citizens build up retirement, housing, and healthcare savings. But it’s not a full financial shield. MediShield Life, the national health insurance plan, provides basic coverage for large hospital bills and select outpatient treatments. It’s funded through your MediSave account and is meant to protect against catastrophic medical costs.

Here’s what it doesn’t do:

• Replace income if you’re unable to work due to illness or injury
• Provide cash payouts upon diagnosis of early-stage or critical illnesses
• Cover non-subsidised treatments or alternative care options
• Offer long-term support to dependents if something happens to you

That’s where personal insurance steps in—particularly for those just starting their careers and building financial resilience from scratch.

In your 20s, you may feel invincible. But this is exactly when insurance is cheapest and most accessible. Here’s what most young adults don’t realize until it’s too late:

1. Your premiums are age-based
   A term plan or critical illness policy bought at 25 can lock in significantly lower rates than one bought at 35.
2. Health events change your eligibility
   Once you’re diagnosed with a chronic condition, even something minor like asthma or eczema, insurers may exclude it or charge you more.
3. Life moves fast
   Within a few years, you may be financially responsible for a partner, parents, or children. Starting early ensures those protections are already in place.
4. You don’t have deep reserves yet
   A week in a hospital or several months off work due to illness can wipe out your savings if you’re unprepared.

When you’re just entering the workforce, insurance isn’t just a safeguard—it’s a foundation. It buys you time to recover without wiping out your progress.

DIYInsurance, Singapore’s first online insurance comparison platform, offers one solution specifically designed for this phase of life: the Young Working Adult Package. Instead of choosing from dozens of complex policies, the package combines coverage from top insurers (like Aviva, NTUC Income, AXA, and Tokio Marine) into one streamlined plan.

Here’s what it offers:

• S$1,000,000 death and total permanent disability protection
• S$150,000 critical illness protection
• S$50,000 early-stage critical illness protection
• 75% of income replacement for occupational disability

This is designed to protect your most valuable asset at this stage of life: your ability to earn. The estimated cost? Around S$220/month for a healthy, non-smoking 25-year-old in a desk job. It also rebates roughly S$350 in commissions, which helps lower your effective cost in the first year—a rare feature for bundled plans.

So, where does that monthly premium go? Let’s decode the key elements:

1. Death and Total Permanent Disability (TPD) Coverage

If the worst happens, this component pays out a lump sum (S$1 million in this plan) to your named beneficiaries. That could help cover funeral expenses, pay off debts, or support family members. Even if you don’t have dependents now, buying coverage early locks in your health rating. You can upgrade later as your financial responsibilities grow.

2. Critical Illness Coverage

This pays out if you're diagnosed with one of the 37 standard critical illnesses (like cancer, heart attack, or stroke) in their moderate to late stages. The payout helps fund treatment, replace income during recovery, or cover lifestyle adjustments.

3. Early Critical Illness Coverage

A key upgrade in newer insurance packages, this pays out if you’re diagnosed at earlier stages—when treatment is most effective, but also costly. With cancer rates rising among young adults in Singapore, this coverage can make a meaningful difference.

4. Occupational Disability Coverage

This lesser-known benefit ensures you receive a monthly payout (up to 75% of your income) if you’re medically unfit to perform your current job. It’s especially important if your career progression depends on physical ability—like hospitality, teaching, or creative work—and you can’t easily switch roles.

Think of CPF as your mandatory base. It helps with hospital bills and builds retirement savings. But its structure has limitations:

• You can’t use CPF to pay for most private outpatient treatments.
• MediShield Life has claim limits and co-payment requirements.
• CPF doesn’t provide income replacement if you’re unable to work.

Adding personal insurance fills these exact gaps. And it ensures you don’t have to deplete your MediSave or rely on family support when emergencies hit.

It’s not uncommon for young workers to skip insurance entirely—or delay it until “later.” But these assumptions often backfire:

“My employer covers me.”

Yes—but only as long as you’re employed there. Most group insurance plans end once you resign or are retrenched. They may not be portable or sufficient.

“I’ll buy insurance when I earn more.”

Unfortunately, this mindset doesn’t factor in the risk of sudden illness or injury. You might find yourself uninsurable by the time you feel “ready.”

“I don’t need to think about death yet.”

True—but insurance is less about dying and more about staying financially stable while you live through unexpected health events.

Can’t afford the full S$220/month yet? Start small—and focus on what protects your income first. Here’s one way to structure a starting plan:

• Begin with disability income protection (most urgent for cash flow)
• Add critical illness coverage (a common young adult gap)
• Delay death coverage until you have dependents or mortgage obligations

DIYInsurance allows you to customize the plan components and coverage levels. That flexibility matters when you’re managing a fresh paycheck, rent, and maybe study loan repayments.

Another decision many young adults face is whether to buy term or whole life insurance.

Term Insurance

• Cheaper
• Covers a fixed number of years (e.g., until age 65)
• Pure protection—no savings element
• Ideal for income replacement and debt protection

Whole Life Insurance

• More expensive
• Covers your entire life
• Has a cash value component (you can surrender the policy later)
• Often bundled with savings or investment products

For young professionals prioritizing affordability and flexibility, term plans usually make more sense. You can always add a savings or investment element separately once your income grows.

Imagine this scenario:

You’re a 26-year-old in your first job. You faint at work, are rushed to the hospital, and are diagnosed with a neurological condition that requires six months of outpatient care. Your MediShield Life might cover a portion of the hospitalization—but not follow-up scans, private consultations, or income loss. If you don’t have early critical illness or income replacement coverage, you’ll need to dip into savings—or rely on family.

But if you had the DIYInsurance package?

You’d likely receive:

• A lump sum payout (if your condition falls under critical illness)
• Monthly income replacement (if deemed unfit for work)
• Coverage for early-stage illness costs

This isn’t an extreme case. It’s one many Singaporeans face every year. Having that coverage in place could mean the difference between financial stability—and starting your career deep in debt.

Rather than treating insurance as a “nice to have,” make it a line item in your budget from day one. A simple monthly budget might look like this:

• 50% needs (food, transport, rent)
• 30% wants (lifestyle, travel)
• 15% savings
• 5% insurance

If you earn S$3,000/month, that gives you S$150 for protection—enough to start with a term plan or scaled-down version of the DIYInsurance bundle. Over time, as your salary increases, so can your coverage.

Insurance isn’t about pessimism. It’s about planning. If you're just starting your career, it can feel like overkill to think about death, disease, or disability. But Singapore’s healthcare costs—and the financial ripple effects of getting sick—are real.

Early protection isn’t just cheaper. It’s smarter. You don’t need to buy the most expensive policy on the market. But you do need a plan that keeps you from derailing financially before you’ve even had time to grow. Whether you opt for DIYInsurance or another provider, the message is clear: protect your ability to earn while it’s at its strongest. Because in the end, insurance isn’t a product. It’s a financial decision with lifelong impact.