Investors need to understand how insurance policies can protect their wealth
Covid-19 has bred many new investors to seize the market downturn opportunity back in March 2020. Many of those investors have since made a healthy profit. Unfortunately, as smooth sailing as our investments may seem now, accidents and mishaps can fall upon our family which could leave us with only 1 option – to withdraw our investments for financial support.
Whether you are a swing trader, a long term investor or someone who uses robo-advisory applications, we all have the same goal – to make money work for us. Having that goal in your bucket list already shows your acknowledgement of the importance of financial literacy, which is great! However, have you taken a step further to plan for any mishaps that could drastically increase your financial burdens by many folds? If you haven’t, we would like to share with you how smart financial planning can protect your investments. Trust me, this will be worth your while.
Unfortunate events such as traffic accidents or being diagnosed with a critical illness can happen to any of us at any stage in life. In fact, it has been reported that 36 people in Singapore are diagnosed with cancer every day. Now that is a really large number especially for a little red dot. To spare you some research, the following table shows the average cost of different Cancer Treatments.
With that, we now know that cancer treatments are not cheap, especially if one would like to seek a more sophisticated procedure.
Besides critical illnesses, other unforeseen events like accidents could cause one to have permanent disability, resulting in a loss of income. Such a situation would most likely result in the said individual to rely on his or her savings or investments for daily expenses. Savvy investors like us know that these costs are predictably to be from our investments, whether or not you are liquidating them at a profit or loss.
Hedge strategy to prevent selling your securities
For example, imagine if all odds were against John, a savvy investor like us, where the economy is plunging rapidly while being diagnosed with Lung Cancer. Although the chances for such a series of unfortunate events is slim, it is still possible. John, who is waiting for his investments to shine out of the recent economic downturn, would have to liquidate them immediately at a huge loss due to his high cancer treatment cost. However, in an alternate dimension where he is covered with critical illness insurance, he would not need to care about the treatment cost and only focus on his recovery, while waiting for his investments to be profitable again.
Therefore, protection against critical illnesses or mishaps such as disability is needed to provide the best treatment at the expense of the insurer, not you. You, on the other hand, can still continue to make your money work for you while concentrating on getting recovered.
Get covered before mid August 2020
Changes in Critical Illness policies will take effect from 26 August 2020. A brief summary on the changes can be found here. To keep it short, critical illness policies bought after 26 August 2020 will have lesser “grey areas” in the contract’s Terms and Conditions. Hence, it is still possible now to be covered against a wider variety of illnesses before the changes are in effect. You can start to find and compare the best Critical Illness Policies in Singapore. You can also get a free tele-consultation with us to widen your choices without any pressure.
If you have forgotten everything you just read, just remember this. Insurance is never an expense, but a safety net to protect our investments and assets.
Besides having insurance, making smart investments is also a major factor to being financially free. We have all heard the term “Buy low, Sell High” to make profits from the market. However, I believe we can all agree that investment is never as easy as it sounds. Knowing the stocks that are considered undervalued requires an enormous amount of research. Luckily for us, there are certain websites out there that simplify investment research and understanding. At PolicyPal, we like The InvestQuest platform.
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