Insurance Planning: The 5 questions you should be answering

Do you have enough coverage today/future?

With respect to what constitutes “sufficient” coverage for day-to-day expenses, it depends largely on the cost of sustaining your current lifestyle and the number of years you would like to replace in an event of unemployment due to death/disability/critical illness.

A good rule of thumb for death and disability coverage, you should have at least 10-15 years of your income or expenses. For critical illness coverage, you should have at least 5-8 years of your income or expenses.

As for liabilities, it depends on your current outstanding mortgage liabilities as well as future liabilities such as your children’s university education tuition fee.

Are you paying too much for your insurances?

Depending on your circumstances, are you paying too much on insurance alone to a point whereby you are scrutinizing other parts of your financial plan? The key here is to be able to strike a balance between risk management (insurance) and wealth accumulation (savings/investment).

Is there a better, more cost-effective way?

From experience, people who either buy and forget or do not regularly review their insurance portfolio have the highest risk of overpaying for the benefits that they are receiving.

For a specific case study of what I meant for this point, you can refer to the article on how I helped my client save thousands of insurance premiums a year over the next 3 years here.

When should you review your portfolio?

Long story short, the answer is yearly. By doing so, you will be on the constant lookout for better, more cost-effective policies (especially for term plan holders) and also be able to adapt your insurance portfolio to reflect the changes that are occurring in your life.

Having trouble?

Reach out to me via telegram or WhatsApp and get all the answers to your question within 1-2 hours instead of spending weeks on your own trying to make sense of things on your own.

By working with an Independent Financial Advisor representative, you will be able to receive a one-stop solution from information gathering, explaining the concepts and product comparison to implementation and post-sales servicing such as claims.

You can also join my telegram channel to receive first-hand updates:

Daniel is a Licensed Independent Financial Consultant with MAS and a certified Associate Wealth Planner that provides advice in the following areas:

• for investment and portfolio management advice - find out more here

• for insurance planning and portfolio optimization advice – find out more here

• for retirement planning advice– find out more here

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Disclaimer:

This article is meant to be the opinion of the author and is for information purposes only.

This article should not be seen as financial advice

This advertisement has not been reviewed by the Monetary Authority of Singapore