My parents bought insurance for me – should I keep it?

Starting your first full-time job often marks the beginning of financial independence. For many Singaporeans, it also brings a responsibility that quietly shifts from their parents to them: Insurance.

It is common for parents in Singapore to buy insurance policies for their children while they are still in school. These may include hospital plans, whole life policies, or endowment plans meant to support long-term savings goals.

Now that you are working, your parents may ask a simple question: “Can you start paying for your own policy?”

If you have never examined these policies closely before, you may not know where to start. Should you keep them? Cancel them? Or buy something different?

The good news is that this moment is actually an important financial milestone. Reviewing the policies your parents bought is the first step towards taking ownership of your financial protection.

Why many Singaporean parents buy insurance for their children

Insurance for children is particularly common in Singapore for several reasons.

• First, insurance premiums are usually lower when a person is younger and healthier. Buying early can lock in lower premiums for life.
• Second, children typically have no medical history, which means coverage can often be obtained without exclusions.
• Third, many parents see insurance as a way to begin long-term financial planning for their child.

Some policies are intended to support education, while others provide lifelong protection.

According to the Life Insurance Association Singapore (LIA), the insurance industry paid out more than S$18 billion in claims and benefits in 2023, including hospitalisation, critical illness and maturity benefits. Many of these policies were purchased years or even decades earlier.

In other words, the insurance your parents bought may already form the foundation of your financial protection today.

Step 1: Find out exactly what policies you have

Before making any decisions, start by understanding what policies are in place.

Many young adults discover they have coverage they were not fully aware of.

The most common types include:

Integrated Shield Plan (hospital insurance)

All Singaporeans and permanent residents are covered under MediShield Life, which provides basic health insurance.

However, many parents also purchase Integrated Shield Plans (IPs) to enhance hospital coverage, especially for treatment in private hospitals or higher ward classes.

This is often the most essential policy to keep.

Healthcare costs in Singapore can be significant. According to the Ministry of Health, certain private hospital procedures can easily exceed S$15,000, while complex treatments may cost far more.

Integrated Shield Plans help reduce the financial impact of these medical bills.

Whole life insurance

Whole life policies provide lifelong protection and typically include:

• death benefit coverage
• critical illness protection
• a savings component known as cash value

Because these policies were purchased when you were younger, the premiums may be lower than if the same coverage were purchased today.

Endowment plans

Endowment policies are savings-focused plans with a maturity date.

Parents sometimes purchase them to support:

• university education
• milestone expenses
• long-term financial discipline

These plans usually pay out a lump sum at maturity.

Step 2: Understand what your policy actually covers

Once you identify your policies, review their details carefully.

Look at:

• sum assured or coverage amount
• premium amount
• policy duration
• riders attached to the policy
• surrender value or cash value

Many young adults are surprised to learn their policies may include features such as early critical illness coverage or premium waivers if the policyholder becomes disabled.

If you are unsure how to interpret the policy details, speaking with a financial representative can help you understand how the coverage works and whether it still fits your current needs.

A worked example: A 25-year-old reviewing three policies

Consider a typical scenario.

Daniel, age 25, has just started his first full-time job. His parents tell him they have been paying for several insurance policies since he was a child and ask if he can take over the premiums.

When Daniel reviews the policies, he finds three plans.

Policy 1: Integrated Shield Plan

This supplements MediShield Life and allows treatment in private hospitals.

Premium: around S$300 per year after Medisave usage.

Daniel decides this is essential coverage and continues the policy.

Policy 2: Whole life policy with early critical illness rider

Coverage: S$150,000 death and critical illness protection.

Premium: S$1,800 per year.

Daniel realises the policy provides lifelong protection and has already built up some cash value. After reviewing the benefits, he decides to continue the policy.

Policy 3: Endowment plan maturing in five years

Premium: S$2,000 per year.

The policy was originally intended to support university expenses, but Daniel has already graduated.

After reviewing the projected maturity value, Daniel decides to continue paying the remaining premiums so that the policy matures as planned.

This simple review helps Daniel understand that his parents had already built a basic protection and savings structure for him.

A simple framework: Keep, adjust or replace

When reviewing insurance policies started by your parents, a useful way to think about them is through three possible decisions.

Keep

Continue the policy if:

• premiums are reasonable
• coverage remains relevant
• the policy has already accumulated value
• it provides protection that may be harder or more expensive to obtain later

This often applies to hospital plans or whole life policies purchased early.

Adjust

Sometimes a policy may still be useful but could be updated.

Examples include:

• adding critical illness coverage
• adjusting riders
• increasing coverage to reflect your income

A financial representative can help review whether the policy structure still matches your current life stage.

Replace

In some cases, replacing a policy may be reasonable.

For example:

• the coverage is no longer relevant
• premiums are significantly higher than alternatives
• the policy does not provide meaningful protection

However, replacing a policy should be considered carefully. Cancelling an existing policy may mean losing accumulated value or giving up coverage that was obtained when you were younger and healthier.

Step 3: Check whether you need additional coverage

Even if your parents bought insurance for you, your protection needs may change once you start working.

Areas to review include:

Income protection

When you begin earning an income, protecting that income becomes important.

According to the Singapore Cancer Registry, cancer remains the leading cause of death in Singapore and accounts for close to 30% of all deaths.

Critical illness coverage can provide financial support during treatment and recovery.

Employer insurance

Many employers provide group insurance coverage, but these plans often have limitations.

Typical employer coverage may include:

• hospitalisation with capped limits
• group term life insurance
• limited critical illness protection

If you change jobs, this coverage usually does not follow you.

This is why personal insurance remains important even when employer benefits exist.

Disability income protection

This type of coverage provides a monthly payout if illness or injury prevents you from working.

For young professionals who depend on their salary, this can be an important financial safeguard.

Turning a family decision into your financial plan

Taking over insurance policies from your parents is more than just a payment responsibility.

It is often the first time many young adults begin actively thinking about their financial protection.

By reviewing what you already have, understanding how the policies work, and identifying any protection gaps, you can build a stronger financial foundation for the years ahead.

If you are unsure how your existing policies fit into your overall financial plan, speaking with a financial representative can help you review your coverage and make informed decisions about your next steps.

The policies your parents started may have been the beginning of your safety net.

Now is the moment to make that safety net your own.

Frequently asked questions

Do I have to continue the insurance my parents bought?

Not necessarily. However, it is important to review the policy carefully before cancelling. Some policies may have accumulated value or locked in lower premiums.

How can I find out what insurance policies I have?

You can check with your parents, review policy documents, or contact the insurer directly. Many insurers also provide digital policy access through customer portals.

Should I buy new insurance after starting work?

Possibly. Many young adults consider additional coverage such as critical illness protection or disability income insurance once they begin earning an income.

What is the most important insurance policy to keep?

Hospital coverage is often considered the most essential because medical costs can be significant. Integrated Shield Plans help supplement MediShield Life and reduce out-of-pocket hospital expenses.

Written by: Great Eastern Lifepedia team