Health Insurance Planning- Starting Right
Whether you’re a baby, a child, a teenager, a young adult entering the workforce, middle age or in your retirement years, insurance protection is something we ought to equip ourselves throughout our lives, lest we become a hazard or burden to our loved ones.
Isn’t this the same reason why obtaining a car insurance is a pre-requisite to drive on our roads in Singapore? Unfortunately, our government can’t compel us to take up personal insurance. Being responsible individuals or caregivers, we should not hesitate to address our financial responsibility.
To me, it’s one of the most selfless act of love that one can do for those whom he/she loves – that of sacrificing one’s resources, so that they can have their dreams intact even when we can no longer contribute financially.
Often, it’s been said that life insurance is bought not because one may die, but so that others shall live. That’s the miracle of life insurance!
I often joke that instead of asking lavish gifts between spouses or that diamond ring when you exchange marriage vows, that one may like to ask for a gift that will prove to be more enduring – adding insurance cover on their respective lives. Wouldn’t that make a meaningful gift for one another?
What’s the urgency?
1. You are the single most important asset to your loved ones.
Suppose you have a machine at home that spits out hundred dollar bills every day without fail and ever increasing amounts year after year to provide a good living for your family, funding your child’s education and assure a comfortable retirement for you and your wife.
Will you choose to insure today or later? How much will you insure it for? Do you realize that YOU are that ‘life giving’ machine?
“The biggest asset you have is your earning capacity, and that depends entirely on your attitude.” – Ben Feldman
2. Perils of Death, Disability, Illness and accidents do not discriminate along the lines of any gender, race, religion or age. It can happen randomly at any point in time.
Just visit any hospital and ask the patients whether they expected ‘that’ to happen to them, no prizes for guessing their reply.
“Do you know anyone who has a lease on life? It isn’t a question of if; its a question of when.” – Ben Feldman
3. Our continued youth and good health is never guaranteed.
As we age, health will certainly deteriorate. Accordingly, insurance premiums will keep rising and our insurability will become increasingly uncertain.
4. Hence, secure low premiums by planning early in life so that you will have more disposable income as you climb the corporate ladder.
Compared to your peers who plan for their insurances later in life, by choosing to plan early, you will have a head start over your peers because of your ability to channel your increasing disposable income towards wealth accumulation plans so as to provide the best education your child deserves and a comfortable retirement for you and your spouse.
Building the foundation of your financial plan
Because Insurance is the foundation on which your financial plan will be built on, it will be to your benefit to ensure a strong foundation for it.
Building a strong foundation for building often requires several materials to come together e.g foundation stones, concrete, steel meshes etc. It’s very much the same when building the foundation of your financial plan.
What I mean is that there is no single insurance plan that will cover all the risks that you may encounter during your life’s journey. Hence, there is a need to combine several types of insurances so as to cover the risk gaps as fully as possible. Hence, the first priority is to seek comprehensive cover.
Types of risk cover
- Total and Permanent Disability
- Early Critical Illness
- Critical Illness
- Partial Disability
Next is to assess the size of the required insurance cover.
A skyscraper supporting an ecosystem of thousands of people will certainly need a stronger foundation compared to a single-storey home. Similarly, the size of our insurance cover will be directly correlated to the number of dependents we are supporting, yearly expenses needed to support our loved ones and the duration that we wish to provide for them.
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