Hierarchy Of Insurance Needs!
People often mistaken that saving and investments are the most important things in their life and they spend a lot of time and effort in looking at these areas. However what they never realised was that no matter how much they can accumulate their wealth but once something bad happened to them, all their money are gone! Therefore protecting the health and wealth are the most important things that should be putting more attention to it.
The above Pyramid shows the increasing level of insurance that everyone needs. Basically i applied according to what basic human needs (Maslow’s hierarchy of needs ) in the insurance context. The most important insurance is to cover ourselves adequately on health, the basic one being the national hospitalization plan, the integrated Medishield plan offers by insurer that covers the hospital bill completely. Rather than worrying about financial burden, it is crucial to concentrate on getting ourselves well covered and carry on with our normal life.
Next on the pyramid is protection against death, total permanent disability and critical illness. This is rarer than hospitalization, but if it happens, it will cause a lot of financial and emotional strain on the family. We would like our family members to continue their life as normally as possible. Hence, a comprehensive coverage with sufficient payout will help our family members to tide over the difficult period. In normal time, an average of 10 times your annual income will be a good gauge for your overall coverage. Remember, insurance is not for yourselves. It is for people that you loved most!
After we have adequately covered ourselves, we will then seek for opportunity to save and invest to ensure a continuity of good life for our family members. Depending on CPF alone will not be enough for retirement hence you need to invest your money for greater return. Family with children should consider education policy to ensure and lock down a fixed sum of money for the children’s tertiary education for a proper head-start in life. As parent, i believe you want the best for them and as such, an education policy is the best gift that you can give them.
And when we reach age 55, we should buy an annuity insurance policy (CPF Life) that will pay us income, with increasing amount every year, as long as we live. We should be enjoying our retirement years, without worrying of lacking of income to sustain our everyday expenses.
Related posts:
Loading ...
Leave a Reply