One thing that many people don’t worry about, but they should, is ensuring they themselves and their family have enough financial protection and plan for their future.
I’m saying this not as a financial advisor today, but because I’ve been through several circumstances that forced my family to face an uncertain future.
When a family member falls ill
When I was younger, my beloved grandmother unfortunately had two strokes. The second stroke left her unable to perform not even a single activity of daily living (out of six).
She was bedridden for more than seven years, and it was very painful for her even with medications and doctor visits.
We hired a helper and did what we could to ensure she had access to regular checkups via non-emergency ambulances, home nursing services and treatment.
My grandmother couldn’t even eat. We had to feed her using Ensure milk via a feeding tube.
Thankfully she was covered by Eldershield then which paid out $300 a month for 5 years, which offset our monthly costs of about $1,500.
However, we couldn’t have purchased disability insurance earlier as she already had a pre-existing heart condition.
The family came together to chip in for the remaining $1,200 a month for the first 5 years, and foot the entire cost of $1,500 a month for the next 2 years.
Losing my job
When I was working in the electronics sector, I was retrenched while pregnant with my second child. It was agonising, as I worried about losing working mum benefits like childcare subsidies.
My husband was then undergoing a mid-career change and studying too. My pregnancy was difficult and I had to be hospitalised due to complications.
This made me realise that even if I covered my children with enough insurance, I failed to insure myself. In fact, I may actually be a bigger liability than my kids!
After I got another job, I made sure I quickly joined the union (United Workers of Electronics and Electrical Industries or UWEEI).
I was retrenched again a year later.
Although I lost my job again, I received a larger payout as a union member.
Why some don’t bother to protect themselves
I decided not to stay in the electronics industry and become a qualified financial advisor instead.
I wanted to learn more about protecting myself and family financially, and help other families prepare for unforeseen events such as those I’ve experienced.
Among the various people I’ve met, there are many reasons why they don’t worry about their financial protection.
– Some people think their parents would have purchased enough insurance for them, but they do not know what insurance they have exactly and how much they need to be insured. They would rather spend time on their YOLO lifestyle.
– Some think their parents have already covered themselves, and they don’t need to buy for their parents. But when their parents fall ill or something happens, the whole family has to chip in to pay the expenses.
– Some parents prefer to insure their children first, but forget about having enough coverage for themselves. If they lose their jobs or worse still, meet with a misfortune, they cannot earn a living to feed their family and pay the bills.
What happens when you don’t plan?
Good financial planning doesn’t only involve insurance.
Making a will, a Lasting Power of Attorney (LPA), CPF nomination, planning your retirement and investing wisely are also important.
For example, without making an LPA, if you fall into a coma, your family members have to pay off your bills using their money first, as they are unable to access your bank account to pay.
Without a will, it can take up to 3 years to unlock your assets for your dependents’ school fees, expenses and family bills. Who will pay for them in the meantime?
There is also much uncertainty as to who will look after your children, their living and schooling arrangements and their future, in the event a double misfortune takes away both parents.
According to an NTUC Income survey, the majority of youths worry that their parents spend too much money on today’s expenses without saving for their retirement.
60% are not financially prepared should something unforeseen happen to their parents.
Singaporeans, while being resourceful at getting the latest coupon deals or best value for money in shopping, may not be as financially savvy as they should be.
When my company had a recent financial talk with a large organisation, many attendees did not know what national insurance schemes (like Medishield, Eldershield and Dependents’ Protection Scheme) are for, who these schemes cover and how to claim.
They would prefer to deal with an issue when it happens, but by then it could be too late.
Special thanks to June Lim, Senior Financial Consultant at Financial Alliance Pte Ltd (IFA), for sharing her journey with us.
Featured photo: NTUC Income
What do you want to tell others? Find me at jules <at> workersofsingapore (dot) com