Behind the numbers
Exactly how the calculator gets from your inputs to a coverage estimate — formulas, reasoning, and a worked example.
The big picture
The calculator uses income-replacement rules of thumb — the same kind of back-of-envelope logic a financial planner would start with. Your income goes in, gets multiplied based on your situation, and out comes a ballpark figure for each type of coverage.
Your inputs
- Income
- Life stage
- Dependants
- Housing loan
- Risk approach
Multipliers
- Stage × income
- + dependant boosts
- + loan amount
- × risk scaling
Your starting point
- Life coverage
- Critical illness
- Disability income
- TPD coverage
- Hospital tier
Your inputs
- Income
- Life stage
- Dependants
- Housing loan
- Risk approach
Multipliers
- Stage × income
- + dependant boosts
- + loan amount
- × risk scaling
Your starting point
- Life coverage
- Critical illness
- Disability income
- TPD coverage
- Hospital tier
The idea behind income replacement: if something happens to you, how many years of income would your family need to stay afloat? That number, plus any big liabilities like a housing loan, gives you a starting point.
The formulas
Each bar below shows where the number comes from — using a single working adult earning SGD 5k–8k who supports parents, no housing loan, balanced risk.
Life (death coverage)
If you pass away, your dependants lose your income. The payout covers their living expenses plus outstanding liabilities. The MAS Basic Financial Planning Guide recommends 9× annual income — our tool breaks this down further by life stage and dependant type to give a more tailored estimate.
▶See multiplier details
| Life stage | Multiplier | Reasoning |
|---|---|---|
| Student / NSF | 0.5× | Minimal obligations — mainly funeral costs |
| Single working | 1.0× | Buffer for debts and transition costs |
| Married / kids | 6.0× | Years of income replacement for family |
| Dependant | Boost | Why |
|---|---|---|
| Parents | +1.0× annual income | Covers their living expenses |
| Spouse | +2.0× annual income | Replaces shared household income |
| Children | +3.0× annual income | Education + living until independent |
Housing loan is added as a lump sum on top — e.g., SGD 350k for a 200k–500k loan range.
Critical illness
A serious diagnosis means treatment costs (SGD 100k–300k+ in SG) plus time off work. The MAS guide recommends ~4× annual income (LIA estimates 3.9×, based on a 5-year recovery period). Our estimate varies by life stage — lower for singles with fewer obligations, higher for those with dependants.
▶See multiplier details
| Life stage | Multiplier |
|---|---|
| Student / NSF | 0.5× |
| Single working | 1.0× |
| Married / kids | 2.0× |
Dependant boosts for CI are smaller (+0.2× for parents, +0.3× for spouse/children) since CI payouts primarily cover your own treatment.
Disability income
If you can't work for months but aren't permanently disabled, you still need income. According to MoneySense.gov.sg, DI pays up to 80% of your average monthly salary — our tool uses 75% as a conservative baseline.
▶See multiplier details
| Life stage | Percentage |
|---|---|
| Student / NSF | 50% |
| Single working | 75% |
| Married / kids | 75% |
Total permanent disability (TPD)
If you permanently can't work, your income stops but expenses continue. Similar logic to life coverage, but slightly lower (0.8× vs 1.0× for singles) because life coverage assumes your dependants need to replace your income entirely, while TPD assumes you're still around — so shared expenses like housing and daily costs are partially offset.
▶See multiplier details
| Life stage | Multiplier |
|---|---|
| Student / NSF | 0.5× |
| Single working | 0.8× |
| Married / kids | 3.0× |
Risk approach
All estimates above are scaled by your chosen risk approach:
| Mode | Multiplier | What it means |
|---|---|---|
| Conservative | 0.7× | Lower coverage, lower premiums |
| Balanced | 1.0× | Middle ground (default) |
| Aggressive | 1.3× | Higher coverage, higher premiums |
Worked example
Worked example
Single working adult, earning SGD 5,000–8,000/month, supports parents, no housing loan, balanced risk.
Life coverage
Income midpoint: SGD 6,500/mo → SGD 78,000/yr
Base: 78,000 × 1.0 (single) = SGD 78,000
Parents boost: 78,000 × 1.0 = SGD 78,000
Raw: (78,000 + 78,000) × 1.0 (balanced) = SGD 156,000
Rounded to nearest 50k → SGD 150,000
Critical illness
Base: 78,000 × 1.0 (single) = SGD 78,000
Parents boost: 78,000 × 0.2 = SGD 15,600
Raw: (78,000 + 15,600) × 1.0 = SGD 93,600
Rounded to nearest 25k → SGD 100,000
Disability income
Raw: 6,500 × 75% × 1.0 = SGD 4,875
Rounded to nearest 250 → SGD 5,000/mo
TPD
Base: 78,000 × 0.8 (single) = SGD 62,400
Parents boost: 78,000 × 0.5 = SGD 39,000
Raw: (62,400 + 39,000) × 1.0 = SGD 101,400
Rounded to nearest 50k → SGD 100,000
Hospitalisation plans explained
In Singapore, everyone is covered by MediShield Life — the national health insurance. It covers basic hospitalisation in public hospitals (B2/C class wards). If you want better coverage, you buy an Integrated Shield Plan (ISP) from a private insurer, which sits on top of MediShield Life.
What the tiers mean
| Our tier | Roughly maps to | Ward class | What you get |
|---|---|---|---|
| Basic | MediShield Life only | B2 / C | Subsidised ward in public hospital |
| Standard | Entry-level ISP | B1 | Air-con ward, smaller room, public hospital |
| Plus | Mid-tier ISP | A | Single/twin room in restructured hospital |
| Premium | Higher-tier ISP | A (private) | Private hospital coverage |
| Private | Top-tier ISP + rider | Private | Full private hospital, minimal out-of-pocket |
What's a rider?
Even with an ISP, you pay a deductible (first SGD 3,500 per policy year) and co-insurance (typically 5–10% of the rest). A rider is an add-on that covers part or all of these out-of-pocket costs. The trade-off: riders make premiums significantly more expensive, but you pay less at point of claim.
How we pick the default tier
Students/NSFs default to Standard (B1 ward). Working adults default to Plus (A ward in public hospital). Aggressive risk pushes one tier higher, conservative one tier lower. These are starting suggestions — your actual choice depends on budget and preference.
Ask your agent: Which ISP does this plan use? What's the deductible? Is a rider included? What are the co-pay terms?
Critical illness — what to look out for
Not all CI plans are equal. Here's what actually matters when comparing:
The big 3
Cancer, heart attack, and stroke account for roughly 90% of all CI claims in Singapore. Make sure your plan covers these three well before worrying about the total number of conditions listed.
Early-stage vs late-stage
Some plans only pay out for late-stage (severe) illness. Better plans include early-stage CI, which pays a partial amount on early diagnosis — useful because catching illness early means you can start treatment sooner, but you might not qualify for a full payout yet.
Definitions matter
Two plans can both say they cover “heart attack” but define it differently. Stricter definitions = harder to claim. Ask your agent for the exact definitions, not just the list of conditions.
Multi-claim vs single-claim
Some plans pay out once and that's it. Others allow multiple claims across different conditions (e.g., you claim for cancer, recover, then later have a stroke). Multi-claim plans cost more but provide ongoing protection.
Ask your agent: How many conditions are covered? Does it include early-stage CI? Is it multi-claim? What are the exact definitions for cancer, heart attack, and stroke?
Term vs whole life — a quick primer
Our calculator estimates how much coverage you need, not which product type to buy. But this is one of the first decisions you'll face, so here's the basics:
| Term insurance | Whole life insurance | |
|---|---|---|
| Duration | Fixed period (e.g., 20 or 30 years) | Covers you for life |
| Premiums | Much cheaper | More expensive |
| Cash value | None — pure protection | Builds cash value over time |
| Best for | Covering a specific need (e.g., housing loan period, while kids are young) | Lifelong coverage, forced savings component |
| Risk | Coverage ends when term expires | May be over-insured later in life |
Many planners suggest a combination: a base of whole life for lifelong needs, topped up with term insurance for the years when your obligations are highest (young children, mortgage).
Ask your agent: Why are you recommending term / whole life for this? How do premiums change as I age? What happens if I stop paying?
Sources & references
The calculator uses income-replacement needs analysis — the standard approach used in financial planning. Rather than applying a single blanket multiplier, we break coverage down by life stage, dependant type, and risk approach. The official benchmarks below are the reference frame our multipliers are calibrated around.
| Coverage type | Official benchmark | Source |
|---|---|---|
| Life / TPD | 9× annual income | MAS Basic Financial Planning Guide (2023) |
| Critical illness | ~4× annual income | MAS Basic Financial Planning Guide; LIA recommends 3.9× based on a 5-year recovery period |
| Disability income | Up to 80% of monthly salary | MoneySense.gov.sg |
How we adapt these
The MAS guide gives a single number meant for broad guidance. Our tool is more granular — a single adult supporting parents gets a different multiplier than a married person with children and a housing loan. The specific multipliers for each combination are our own calibration within these reference ranges, and every one of them is shown transparently in the formulas above.
What this doesn't account for
- Existing policies, CPF Dependants' Protection Scheme, or savings you already have
- Specific product types, insurers, or plan features
- Age-based adjustments (a 25-year-old and 45-year-old with the same inputs currently get the same result — this is a known limitation we're working on)
- Inflation, investment returns, or projected income growth
Think of this as napkin math — the kind of quick estimate you'd do before sitting down with a licensed adviser, so you walk in with a ballpark instead of starting from zero.