Two recent surveys have highlighted the fact that Singaporeans are not financially prepared for the future, in part because there is a general lack of understanding on how to go about the task.
An HSBC Bank poll found that Singaporeans are most concerned about their health (67 per cent) and long-term financial security (56 per cent). It also found that nearly 80 per cent are worried about the costs of healthcare treatment, medication and rehabilitation - far higher than the global average of 57 per cent.
Long-term care and quality of life as we age is another key issue, with 65 per cent citing it as a major concern. Mr Ian Martin, HSBC Insurance Singapore's chief executive, told The Sunday Times: "More than most other nationalities, Singaporeans are worried that poor health in later life is going to stop them from being able to properly look after themselves or their family."
The global average for health concern is a lower 65 per cent, according to the poll. The problem is being compounded by the fact that many people are not putting the right financial measures in place to protect themselves and their families.
The HSBC survey noted that of those who are concerned about their financial security, 40 per cent said they could not manage well or have nothing specific in place if something unforeseen happens.
The remaining 60 per cent have coverage but are unsure of the payout or feel that it won't be enough.
About 57 per cent of those considering taking out insurance have not done so, citing cost as a reason. This is higher than the global average of 53 per cent. And nearly 40 per cent do not know what to expect in terms of payout.
Meanwhile, a survey by insurer Prudential indicates that Singaporeans are facing a protection gap.
It found that 85 per cent of those polled were potentially underinsured by industry standards, with only five times their annual earnings set aside for unexpected personal and financial events.
The Life Insurance Association Singapore recommends that people aim to have about 10 times their annual earnings as basic life cover.
Over the past five years, 70 per cent of Singaporeans have not increased their life insurance cover to keep pace with rising income levels.
This group of respondents cited budget constraints as the key barrier to getting more cover (48 per cent), followed by competing financial needs, with 35 per cent indicating they have other priorities.
Prudential said the lack of awareness on the right level of protection needed during times of crisis could be one reason why Singaporeans are not sufficiently insured.
Its poll found that 61 per cent of Singaporeans believe they have enough savings and life insurance cover to protect themselves and their families against life's crises.
However, in reality, only 15 per cent have 10 times or more of their annual income set aside.
Ms Angela Hunter, Prudential Singapore's executive vice-president and chief marketing officer, said there is obviously "a disconnect" between what Singaporeans think they need to ensure a secure financial future for themselves and their families and what is actually required. "In deciding on life insurance cover, one should consider factors such as income, expenses, outstanding debts, as well as existing savings and investments," said Ms Hunter.
Mr Martin said it is a misconception that insurance products can be complex, time-consuming and costly. He suggested four ways people can prepare for the future: identify your biggest concerns; know your future aspirations; have an action plan; and review it regularly.
Both Ms Hunter and Mr Martin encourage customers to seek professional advice on the options available so that they can make an informed decision.
The HSBC survey polled about 11,500 people aged at least 25 from 12 countries, including 1,000 here. The research was conducted in October and November last year via face-to-face interviews and online.
The Prudential poll was conducted online from June 24 to 30 and surveyed 353 working adults aged between 25 and 49 .