Throughout our journey in life, we go through different stages. We take our first step, go to school for the first time, graduate from school and find our first job. These are just the first few milestones of our lives. As we move on to the various periods of our lives, the coverage that we have previously may not necessarily be sufficient or apt anymore.
Yet, many of us failed to understand that as we transit from one phase to another, we would need to constantly update our protection needs otherwise we run the risk of being underinsured. More often than not, we only come to realise it when a life crisis hits and our loved ones and we would have to face the dire consequences.
Let’s take a look at the three common life stages that will have the most influence on our protection needs.
1. Our first job
Getting ourselves insured once we get our first paycheque is the first thing we should do! This is because we should mitigate the risk of an unexpected accident or illness, which will impede our ability to provide for our loved ones and ourselves. Typically, young working adults that have not started a family should consider getting coverage for integrated shield plan, critical illness, disability, and personal accident.
2. Just got married
The next stage in life is usually to settle down and start our own family. At this point, it would be good to review the coverage that we currently have and identify lapses. As we make plans to settle down, we need to safeguard our spouse and future kids; making sure that they do not have to worry financially should anything happen to us. Therefore, ensuring that we have adequate life insurance coverage is important at this stage.
3. At our prime
As we move on to the prime period of our lives, we start looking at retirement planning and many of us would expand our financial portfolio to create diverse avenues for our retirement income. For instance, some of us choose to invest in a second property with our spare cash. While the rental helps to provide a secondary source of income, we have to consider the housing loan that we took to fund for the property. In an unfortunate event when something bad happens to either our spouse or us, the other party would have to bear the responsibility of the mortgage. This is where term life insurance plays an important role.
On top of that, we should look at mitigating the risk of poor health or illness too. If we happen to be strike by illness, we might be forced to take a break from work and our savings would be depleted while seeking treatment. As such, one should consider updating the critical illness and disability insurance policies they own. With those two policies in place, the insured will be able to protect their income and focus on recovery.
While the future is unknown, it is exciting yet daunting to take on new challenges in life. However, one should not overlook the importance of mitigating the risk of new phases in life creates. Constant reviewing of your financial portfolio with your financial advisor would help to identify potential risk areas. With their expertise, your financial advisor would be able to help you get covered and better protect your loved ones.
Pick up your phone and take the first step to contact your financial advisor to review your current portfolio today!