When you have a newborn at home, i’m sure you are very happy and getting busy the whole day trying to make sure your baby don’t cry. So when everythings are settled down, suddenly you realised and become worried about the upcoming bills that may fall upon you because of this lovely child.

Are you totally prepared for it? Have you as a parent, gotten enough coverage for yourself first? Are you concerned about saving up for your kid’s education plan? Do you have enough saving to endure you through the initial period?

Many parents that i have met experiened one thing or another as mentioned above and most of the time, i need to sit down to spend quality time with them to do some re-adjustment of their portfolio. One of the few mistakes that i realised adults made was that they committed too much into saving for their retirement during their age when they have not enough gotten themselves insured enough.

In Singapore we were taught that we should SAVE. Therefore many insurance sales-person out there will try to make sure of this point to sell to many fresh graduates the idea of saving when young. Yes, it is true that we should be saving BUT not with any insurance company per se. They need to save up for their emergency fund first then get themselves insured and when everything are settled then they look into saving for retirement.

Think about this: one young man went to buy a 25yr saving plan when he just started working as fresh grad and he committed $200 because he is able to save $1000 per month. His salary was $1800 during then. A few years have passed and he realised that he needed protection so he approached his consultant to buy a life insurance. He was asked to buy a life insurance that costs $150. So at this point of time, he would be committing $350 out of his $1800 salary and this works out to 19% of his income! Slowly he got married and have two lovely kids. Then suddenly he passed away due to a car accident! His wife called up his agent and asked how much he was covered. Guess what! The agent said ‘Auntie, i’m sorry he did not have accident plan with us and his total coverage only $130,000″

Imagine you are the wife, how would you feel? $130,000 only! Goodness, how long can you survive for only this small amount of money with your two kids?

In the above example, if he was sold a term plan of $150k for $30/mth and a participating life plan of $150 covering $100k for death and accident, his wife will be receiving $400k in total and he was only paying $180/mth using only 10% of his salary!

Let me tell you the honest truth: This is what is happening out there to many people who commits a saving plan first and realised they may not have enough money to buy life insurance when they really need it. Their agent may not also sell them term policies or accident plan because it is firstly hard for consumer to buy the idea of life insurance and secondly commission are low for them plus the overall production the consultant brings in will be considered low.

 Therefore the next time people approach you for saving plan, tell them stop being a sales consultant, be a financial planner and i will buy from you.

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