A Safety Net For The Future

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Which parent does not want to provide the best for his/her child? To keep the children safe within a glass prism that aids in education and emergencies.

Which parent does not want to provide the best for his/her child? To keep the children safe within a glass prism that aids in education and emergencies.

need and importance of insurance

A Safety net for the future

This glass prism, also known as an insurance plan, is no longer a ‘should have’ but has become a ‘must have’. However, confusing insurance plans, persistent insurance agents and the looming question of just how much to put aside, are enough to drive any parent into a state of frenzy.

Need and importance of insurance: But we’ve got CPF and independent savings!

That’s where most people fall into the trap of not planning earlier. The misconception that independent saving will benefit you in the future has many older people now wondering if perhaps they should have gotten a financial planner when they first started earning. Rather than just putting a little bit of your salary away in your bank for a rainy day, watch it grow through investment that branch out into plans that cover medical insurance, education (for the children) and retirement.

Also, when you take into account the law of averages, the fact is that at some point you or your child may well get ill, or get burgled or your flight will lose your luggage or your car will crash. You don’t want to be caught off guard when that happens. At worse, insurance ends up just becoming an additional savings account, at best, it ends up saving your life!

Okay, I am sold. But where do I start?

According to Mrs Phyllise Er, a financial planner, there are two things to consider before signing up for a financial plan. Firstly, understanding exactly what the plan you are interested in offers, i.e., the benefits that you will receive in the long run.

Secondly, the relationship you have with your adviser. “It is important to have a planner who not just offers you a detailed explanation on the investment plans available but also regards your happiness as utmost importance. A good planner should constantly review her client’s plans and come up with better options for improving the current plans,” she says.

Got it. But Insurance seems like so much work. Is there a plan that binds all?

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Yes. Such a financial plan is what Mrs Hwa Hiang Cheng and her husband, parents of two primary school boys have signed for. A plan that puts them at peace when issues such as the boys’ education in the future, illness, sudden hospitalisation and even for luxury items from time to time.

“Sometimes we get caught up in the numbers game. But at the end of the day, It is not the number of plans that you have that matters but rather what all those plans cover,” says Hwa.

Echoing her sentiments, Er adds, “While it is great to have an extensive plan, if you can’t afford it, do ensure that you have basic coverage. You can always tie your old plans to new ones later. My advice to all parents is not to wait until a certain amount of time is over. Regardless of how small your salary is, putting aside for a rainy day should be your number one priority.”