insurance – Retire Comfy

How to Teach Your Kids about Money

What are money values are you teaching your kids?

One good way to engage your kids in such unusual times now, is to educate them about personal finance. If you need to do so with your kids, this is the article for you, with tips grouped according to different ages.

4-6 years old: Introduce them to the concept of money and how money is utilised

Visual illustration – show them the various forms of money such as notes and coins.

Explain to them how they must pay to get the things they need/want.

7-10 years old: Educate them about earning and saving money in primary school

Teach them how earning money works.

Paying them when they complete a housework – they will learn that they have to work for money.

Or prepare a chart with the chores and the corresponding amounts they earn from doing the various chores.

This is the phase where they can understand the value of money and cultivate the skills to plan forward.

How to teach savings – encourage them to set aside some money until they have enough to get what they want, instead of spending it all at once.

11-14 years old: Open their bank account

Since they have acquired sufficient funds and knowledge on savings, it is time to set up an account for them.

Open an account with no penalties for low balances.

After opening the account:

Teach them how to check balances with the use of banking apps.
How to use these apps for payments and fund transfers.
Warn them on the risks of overspending which will lead to overdraft fees.
How their money will multiply with interest.

15-18 years old: Budgeting and loaning in high school

Prepare them for the real world.

Teach them how to do budgeting by:

Predicting and computing how much they will earn.
Find out what their usual monthly expenses comprise, such as food, entertainment etc. (this can be done by analysing their bank statements).
Saving part of what they earn.

Teach them about borrowing money:

How interest will be charged when they borrow money.
Credit scores & how credit scores can affect their credibility and hence the amount of interest they are subjected to.
Warn them on the risks of carrying balance on a credit card – a possible way is to let them be the authorised user of your card so that they have a sense of its function.

Child in tertiary education

Ensure that they have already drafted out their budget and they have the capacity to pay off expenditures, whereby at most 50% of their budget will be set aside for expenses.

Ensure that they have an emergency fund – 3 to 6 months of expenses may not be saved yet, but they should have kept $500 to $1000 minimally for unforeseeable circumstances that require the extra money.

Child graduated and fresh in the workforce

Advise them of the following:

Get a credit card of their own to strengthen their credibility.

Save for their retirement early – starting early can speed up the growth of their retirement funds.

Get insurance coverage to protect their income as well as pay for unforeseen medical bills.

12 Questions to Ask when Reviewing Your Life Insurance Coverage

Policy review

I recently came across an article about an expectant mum who found out she had stage 4 cancer at age 33. Feeling the unpredictability of life, I’m compelled to write this piece.

Reviewing your life insurance coverage is a crucial part of financial planning and there are some key questions to ask to ensure you still have the right policy in place at the right cost.

Getting started: what you need

A copy of your original life insurance policy illustration
Summary of the policy features and benefits

Your current policy and circumstances

Is my life insurance policy still in force?
What type of policy is it? For example, term insurance or whole life insurance
Have my needs changed?
Is this still the right type of policy for my needs?
Do I need more or less life insurance cover than I currently have?
Can I still afford the premiums?
If I need to increase my cover, has my health deteriorated or am I leading a healthier lifestyle that could mean better pricing for increased cover I may want?

Beneficiaries of your life insurance policy

Who are your named primary beneficiaries?
Are your name primary beneficiaries still those you would like to benefit from the proceeds of your policy?

Policy features and benefits

Does my policy have any guarantees? If so, what are they? Are they still beneficial to me?
Are there any ‘policy review’ points that I can benefit from? E.g. ability to increase the cover without further medical underwriting.
Can I borrow against the cash value of my policy from the insurance company? If so, do you want to take advantage of this feature?

Should I get Disability Income Insurance?

and y disability

How would you get by if u lose your ability to work and earn a paycheck every month?

Financially speaking, working disability is worse than death. Our earning ability is our greatest asset and you are the golden goose that lay the golden eggs. Most insurance policies only pay when the golden goose drops dead or is critically ill, but this is not enough. What we need to do is to insure the golden goose’s “ability” to lay golden eggs.

But you may ask: I am already covered, right?

Some people may believe they are already covered for the risk of disability. Let’s look at the common misconceptions:

I have a policy that covers me for Total & Permanent Disablement (TPD)
This only covers very severe disability, such as losing a pair of limbs before your insurer pays you. What if a teacher loses her voice and has to quit teaching? This does not meet the definition of TPD, but is sufficient to trigger your disability income payouts till your desired retirement age.

I have a Critical Illness policy
Currently, critical illness insurance providers do not cover diabetes as one of the 37 critical illnesses. What if a pilot is grounded because his diabetic condition affects his vision? Critical illness policies work well to provide a lump sum to cover medical expenses. But it falls short of the real paycheck protection need.

I have personal accident coverage

The weekly income payable from personal accident plans is payable only if the cause of disability is accidental, defined as involuntary and violent. Working disability from illnesses is not covered.

My employer will pay me
Most employers define how long you will receive your salary if you are unable to work. In Singapore, this is often between 1 to 3 months, which will not be sufficient in the case of long-term working disability.

Therefore, it is crucial for all working adults to consider a Disability Income policy that provides for replacement of income in all scenarios of working disability. If a sickness or injury (of any severity) prevents you from working for at least 60 days, it can replace 75% of your earned income, by offering a tax-free cash benefit every month.

What Is A “Deductible” or “Excess”?

A deductible or excess is something you have on your policy when you have either, Hospital & Surgical coverage or Motor coverage. And its a dollar amount – it could be $500, $1000 or $3,000.

Quite simply put, the deductible is what you are responsible for, before the insurance company pays out anything on your behalf to fix your vehicle or seek medical treatment.

The lower your deductible, the higher your premium is going to be. Conversely, the higher the deductible you have, the lower your premium is going to be.

Reason is this – you, the driver or the patient, are taking on more risk with a higher deductible. When you have a lower deductible, you are putting more risk on the insurance company. As a result, your premiums are effected in this way.

Importance of Overseas Medical Coverage

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There is an essential aspect of Medical Insurance which some of you may not know – having overseas coverage. To illustrate the importance of it, below is the story of my colleagues’ client.

She is a 9 years old girl, who was diagnosed with Brain Cancer in 2014. After 2 weeks of treatment, her doctors gave up as the healthcare industry in Singapore does not have the necessary type of cancer treatment – Proton Chemotherapy.

Her parents sought advice from her doctors as to where their daughter could go internationally, in order to undergo Proton Chemotherapy. Doctors told them the nearest country with this treatment is South Korea, which is also the cheapest. Although she was unable to walk and had to move around in a wheelchair, the girl’s parents decided to bring her to South Korea.

After the treatment was done, she responded well and returned to Singapore, able to walk again. After follow-up Chemotherapy in Singapore, her cancer is now in remission.

Her parents and financial planner filed a claim for the medical bills incurred in South Korea, amounting to $110,000. Thankfully, their insurer paid for it, as the girl’s Hospital & Surgical plan covers overseas hospitalisation and treatment costs.

Many of us may feel that since Singapore is a very developed country, we should have all forms of healthcare. But this little girl’s story shows us that the opposite is true.

There are definitely more cases of patients being advised to seek treatment outside Singapore. So do check if your Hospital & Surgical Plan covers you for overseas treatment.