Daphne Lye, Financial Planning Lead at MoneyOwl, said that when evaluating existing insurance plans, one should consider whether adjustments are necessary based on the new environment and life goals.
The important thing is to ensure that one and one’s family do not pay excessive premiums but receive adequate protection. She provides the following basic insurance guidelines:
(i) The compensation for death and total and permanent disability shall be nine times the annual income.
(ii) The payout for critical illness insurance is four times the annual income.
(iii) Premium expenses shall not exceed 15% of monthly net income.
If you don’t organize your insurance policies, some coverage areas may overlap significantly, while others may be insufficient. Insurance is an expense, and you should purchase adequate coverage with the lowest possible premium.
Daphne Lye believes that the most common problem encountered in reviewing and managing finances is the inability to persevere. Some people have high expenses or unstable income, making it difficult to maintain consistency, while others lack financial literacy.
