STARTER GUIDE TO FINANCIAL PLANNING
What Kind Of Insurance Should I Get
With My Extra $200 Every Month?
Putting aside some part of your monthly income is certainly not something new and it is actually a must in our society. One might fear for the future, another just want to have a comfortable retirement life or even just saving up for your wedding. Everyone has his or her own reasons and it all differ.
The standard of living is high in Singapore and more and more people are aware of the importance of getting insurance. As your pay increases, so do your expenses. And if you stop working, it does not mean that your expenses will stop at the same time. Unfortunately, that is the truth.
You do have your monthly expenses and responsibilities, as a result, you only have a certain amount that you are able to keep aside to fund for your insurance needs. The question is, what kind of insurance should I get first?
The search is on and you have met several insurance agents. Or maybe you have read on the best current products from the Internet. Despite all that, you might still be hesitating into making a decision.
Or maybe you perhaps bought one already but you are starting question yourself if you had made the right choice. Doubting whether you could have done better.
Not everyone is the same
One important thing that you should keep in mind is that not everyone is the same. If your friend bought a certain policy that is different from yours, that does not mean you had made a wrong decision.
Think of it when you want a drink, you might want mocha but your friend might want a latte instead. It works the same as insurance.
It all comes back to your needs.
If you need to save up money for the future, hence it will be this plan. If you need a payout if you become disabled, thus this plan will be suitable. If you need to provide an income for your family when you pass on, for this reason, it will be this plan.
Different situations, different needs. Needs will differ when you are single, when you are married, when you are a business owner or even when you are a student.
Think long-term
For the example of coffee, that might be a current or short-term need. When coming to getting an insurance policy, you have to think long-term. Hers is the reason why.
For example, you are in your second year of working and regularly you have an excess of $300 per month. You then decide to commit in buying an insurance policy with the same amount of monthly premiums which will require you to pay for the next 20 years.
A year on, you got married and monthly expenses increase. You are beginning to feel that the insurance more of a burden rather than a help in your life. Eventually, you decided to surrender the policy and you would have lost all the premiums that you have paid.
Therefore, you should think long-term prior to deciding what is right for you. Sometimes you might need to talk to a professional when making such decisions, just to have a third opinion on your situation.
So, what should I get then?
Insurance is all about protection. Therefore, it boils down to what do you want to protect. With your current budget, what should be your priority?
There are two things that people would normally want to protect. It is either to protect their money and themselves. You can protect your money if you buy a savings plan and you can protect yourself if you buy a life insurance plan. Or better yet, you can protect both at the same time.
The best situation is that you are able to afford for both but if the situation does not permit, think which is more important to you. Protecting yourself or your money? Think again, which one you can replace and which is not possible to replace?
Knowing what you need. Prioritize!
It is important to know what is your priority when it comes to insurance. It is all right not to get everything that you need straight away but at the same time, it is crucial to start somewhere. Secure your insurability factor and better yet get it when you are young as premiums are cheaper.
At this current age, there so many types of insurance hence the type of benefit or coverage is vastly up to date with the current demands. Therefore it is useful if you are able to know almost everything that is available in the market.
Researching and comparing through online platforms is one way you can try to finding the best type of insurance. But at the same time do read EVERYTHING, from the headers to the fine prints. You do not want to be disappointed when you realize you got the wrong thing.
Always keep in mind, that $200 a month might save your life one day. Therefore choose wisely or better yet seek for advice from professionals.
Hope that this article was useful. Do share it with your family and friends. Till next time.
Disclaimer:
I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.
