Step 1: Financial Planning (Insurance)
Responsible planning for the future makes life easier for us and our loved ones. Yet, I’ve been procrastinating because the above plans require a certain amount of time and effort. And having to make many decisions in the process, I always stop short due to decision paralysis.
However, one never knows what tomorrow brings. Hence, I decided to take action soon and break down the giant plan into bite-sized steps. I invite you to join me and take one small step at a time together.
Jump to the relevant section:
Jump to the related posts:
- Step 1: Financial Planning (Insurance)
- Step 2: Financial Planning (Investment)
- Step 3: Advance Care Planning, Advance Medical Directive and Lasting Power of Attorney
- Step 4: Legacy and Estate Planning (such as writing a will and funeral wishes)
- All Finance Posts: home.joogostyle.com/tag/finances
Buy Insurance, Unless…
I would say financial planning affects us the most, because it plans for when we are alive and kicking. First and foremost, start thinking about insurance even if you have a slight resistance to it.
You might think you are paying for nothing in the foreseeable future or that the insurance companies consolidate the premiums to pay you back when the time comes. But the payout will usually be more than what you have paid. In any case, you are paying premiums when you can still afford them. Without insurance, you have to fork out the money when you are too sick to work and have no salary. So, buy insurance, unless you can save and invest to cover future medical expenses, including big hospitalisation bills. In this case, it might be unnecessary to get insurance.
Buy insurance, unless you are willing to wait longer to receive government medical care. A patient in Singapore can still receive medical care even without insurance. During my atypical tuberculosis episode, I was more assured to be attended by the team of doctors at Tan Tock Seng Hospital because of the expertise from the National Tuberculosis Care Centre than a single private specialist.
However, having gone through a few medical episodes thereafter, I appreciate having the option to afford a private doctor. It’s faster to get an appointment in private healthcare than in public healthcare institutions. For example, after referral from the polyclinic, it usually takes another 1 to 3 months before a specialist’s consultation, scans and diagnosis. On the other hand, you can generally obtain an appointment with private healthcare within a week or two, allowing medical conditions to be diagnosed and treated before they worsen. The possibly better medical care at private medical might also come at a lower cost due to insurance.
Buy insurance, unless you can recuperate in any hospital room type. The uninsured person might have to sacrifice hospital comfort even with a high medical bill. Comfort might sound superficial, but having stayed in a public hospital for my birth (single ward) and tuberculosis (4-bedder ward), and envied my husband’s hotel-like private hospital room, I see the stark variation in comfort level for different wards.
A tired and sick patient would want a good night’s rest. Other than being frequently woken up by nurses for checks of vital signs, the groans and ruckus from other patients in my 4-bedder ward throughout the night added to my agony. That said, I did have insurance for a 1-bedder in a public hospital, but I was assigned a 4-bedder ward because of the lack of rooms. But at least I had the choice of a 1-bedder in the first place. I could change to a private hospital too, but based on my condition, I decided to stay put in the public hospital. Thus, insurance doesn’t guarantee a room type for you, but provides you with options.
Buy insurance, unless you have no dependents and want to live YOLO. Previously, Quinn from Finexis shared some Financial Planning Tips for Parents with Young Children at baby.joogostyle.com.
On a more spiritual note, as a Christian, I did wonder whether buying insurance means a lack of faith in God’s providence. After thoughts and prayers, I think it’s only wise and good stewardship to get insurance for my family. I believe He will provide if there are gaps in insurance, but I decided not to test God. It’s like seeing a doctor doesn’t mean we don’t trust God to heal. God can heal through doctors, and He can provide through insurers. So buy insurance, unless God has spoken not to.
Before I end this section, I would like to share an excerpt from an interview with Joanna Dong (董姿彦), a Singaporean singer, actress and host. She was strongly encouraging freelancers to get insurance, but it is also good food for thought for the uninsured.
Insurance Audit
What is an Insurance Audit?
An insurance audit is when a financial consultant reviews and assesses your insurance policies. During the audit, the financial advisor may advise on whether to hold or switch policies, decrease unnecessary coverage or buy policies for uninsured areas of exposure. This is to ensure you are not overpaying for your coverage or under-insured for your risk exposure. You can also read this Forbes article about “Why An Audit of your Life Insurance Policies is Important“.
Like a health check-up, it’s recommended to have regular or annual insurance audit because our life situations change and there may be newer policies that are more suitable for your needs. You don’t want to find out at the critical moment, when you need the insurance, that you are covered less than what you had expected. Then comes the heartache of having overpaid the premiums all this time.
Review Insurance Policies (By Yourself First)
It’s good to keep an Excel spreadsheet to record the pertinent details of your insurance policies. For example, the policy name, policy number, premium and coverage amount. I have a template you can start off with. Join JoogoStyle Telegram and click on the pinned post to download it under ‘Free Resources‘. Filling this spreadsheet will provide you with a bird’s-eye view of what you own. It can be useful during emergencies because it saves you the need to dig out all your policies to see what you have and avoid missing out on one or two in the process.
With this spreadsheet, it will also be easier for you to review your portfolio of insurance policies. Review on your own first and do your due diligence before meeting with a financial consultant. In this way, you know what questions to ask and discern the advice given with more wisdom.
Now you are covered and your wealth protected, let’s move on to grow your wealth — “Step 2: Financial Planning (Investment)” (coming soon).
Do note that the views and opinions expressed in this article are solely my personal opinions. Nothing in this article is meant to be taken as financial advice. All data is accurate at time of publishing. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Do you have any other questions? Or good tips you heard/read about insurance? Share in the comments section below. 🙂 Read the disclaimer and disclosure at the end of the post before you go. 😉
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