What If Guide
Risk Type
Income Loss
Impact
High
Your income funds everything - your mortgage, your children's education, your retirement savings, and your daily life. This guide explains what happens when income stops and how to plan for it without fear or complexity.
Every financial plan you have - retirement savings, children's education fund, investment portfolio, mortgage payments - depends on one thing: your ability to earn income. When that income stops unexpectedly, the entire structure is at risk.
Reality Check: Illness or injury can happen to anyone. In Singapore, 1 in 4 people will face a critical illness before age 65. Disability can strike regardless of age, fitness, or lifestyle.
YOUR INCOME
Mortgage
Education
Retirement
Daily Living
The Reality
When income stops, these areas are immediately affected
The problem isn't just surviving one month without income - it's surviving 6, 12, or 24 months while also paying for treatment, rehabilitation, and potentially permanent lifestyle changes.
Different insurance products cover different scenarios. Understanding what each covers helps you identify gaps.
| Coverage Type | What It Covers | Payout Type | Income Replacement? |
|---|---|---|---|
|
|
Medical bills during hospitalisation | Reimburses bills | No |
|
|
Death or disability from accidents only | Lump sum | Partial |
|
|
Diagnosis of major illnesses (cancer, heart attack, stroke) | Lump sum | One-time |
|
|
Inability to work due to illness or injury | Monthly income | Yes ✓ |
|
|
Death or total permanent disability | Lump sum | For family |
This is the only coverage designed specifically to replace lost income with monthly payouts. It fills the gap that hospital insurance and critical illness don't address - paying your bills while you recover.
Surgery recovery, broken bones, minor illness
Primary defence: Emergency fund + paid leave
Critical illness, severe injury, permanent disability
Primary defence: Disability income insurance + Critical illness coverage
No employer to provide paid leave, no group insurance, income stops immediately when work stops.
100% of household income depends on one person. No backup if that person can't work.
Business may not survive without you. Personal and business finances often intertwined.
Sales, real estate, insurance agents - income directly tied to activity. No work = no pay.
Medium-High exposureNo job security, often no medical leave benefits, contracts may not be renewed if unable to perform.
Medium-High exposure"I'm young and healthy - disability won't happen to me"
1 in 4 Singaporeans will face a critical illness before 65. Road accidents don't check age. Mental health issues affect all demographics. Young people are often under-insured because they share this belief.
"My hospital insurance covers everything"
Hospital insurance pays medical bills. It doesn't replace your income while you recover at home for 6 months. Your mortgage, children's school fees, and daily expenses still need to be paid.
"My employer will take care of me"
Most employers provide 14-60 days of sick leave. Long-term disability is rarely covered. When you leave or are let go, company benefits disappear. Your personal coverage is the only constant.
"I can just use my savings or CPF"
CPF has strict withdrawal rules. Savings can be depleted quickly - 12 months of expenses costs a lot. Using retirement savings now means having less at 65. You're borrowing from your future self.
Income protection connects to every aspect of your financial security
A common guideline is 60-75% of your monthly income. You don't need 100% because some expenses (commuting, work clothes, eating out) may decrease when you're not working. However, ensure the amount covers your fixed commitments: mortgage, insurance premiums, children's education, and basic living expenses.
Critical illness pays a lump sum upon diagnosis of specific conditions (cancer, heart attack, stroke). Disability income pays monthly when you can't work due to ANY illness or injury - not just listed conditions. They complement each other: CI handles immediate treatment costs, DI replaces ongoing income during recovery.
Coverage varies by policy. Some policies cover mental health conditions like severe depression or anxiety that prevents work; others exclude or limit them. Pre-existing mental health conditions are often excluded. It's important to check the specific policy terms and be upfront during the application process.
Ideally, as soon as you start working and have income to protect. Premiums are lower when you're younger and healthier. Pre-existing conditions acquired later may be excluded. Many people wait until they have a family or mortgage - by then, premiums are higher and health issues may have developed.
Some policies offer partial disability benefits - you receive a reduced payout that supplements your reduced income. This helps during recovery phases when you can work but not at full capacity. Not all policies include this feature, so it's worth checking when comparing options.
Your income is the foundation of everything you're building financially. Protecting it isn't about fear - it's about ensuring that an illness or injury doesn't derail your family's future. The right combination of emergency savings, disability income insurance, and critical illness coverage creates a safety net that lets you focus on recovery instead of financial survival.
Everyone's situation is different. Let's review what coverage you have, what gaps exist, and what makes sense for your specific circumstances.
No sales pressure. All planning is based on your individual needs.