Up till now, Aunty Scroogey have not really talked much on the subject on insurance, as she is no expert in this area. But what Aunty Scroogey does know is that one needs to be adequately insured and make projections into the future based on worst case scenarios.
There are so many different types of insurance – life policies, endowment plans, fire insurance, motor insurance, maid insurance, mortgage insurance, hospitalisation plans, etc – so how do you make sure that you are adequately insured? Answer: by reviewing your policies on a frequent basis.
If you think that you’ve already bought a policy when you first started working, and that you are properly insured since then, how wrong can you be! And you’re probably not alone in this way of thinking, there are hundreds, if not, thousands of folks who think the same. Our financial and insurance needs change as we go through different parts of our life cycle. Perhaps the last that you bought a policy was after the birth of your eldest daughter, now that you have 3 kids instead of 1, the amount of coverage probably calls for an increase or additional policies.
Or that you could be someone who decided to have an early retirement. Previously, your medical and hospitalisation needs were met by your company’s generous medical budget, but now that these benefits are no longer available to you, you might want to re-look at the hospitalisation plan you’ve purchased 5 years ago and see if it is comprehensive enough given your change in employment status.
Or that you have just bought your dream home together with your spouse. A mortgage insurance is certainly a must, to ensure that your spouse is able to service the remaining mortgage should something happen to you. In the event that your spouse decides to sell the property, having a mortgage insurance also ensures that he/she is able to hold the piece of real estate in a depressed market and wait till property prices recover. In short, he/she would be able to sell by choice and not by forced circumstances.
Not surprisingly, insurance is one of the most neglected issues in most people’s lives. If you are not sure whether you are adequately insured, perhaps it’s time to catch up with your financial planner soon.