Families have generally become smaller too. This leads to a declining old-age support ratio – the number of working children to provide care for every elderly.
And depending on circumstances, long-term care could cost between $1,000 to $4,000 per month, for services such as home care, day care and nursing home.
This is where long-term care insurance comes in to alleviate the financial burden.
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.
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.
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?
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.
A deductible or excess is something you have on your policy when you have either, Hospital & Surgical coverage or Motor coverage. And it’s 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 affected in this way.
