Having established wealth creation accumulation plans, it is crucial to protect it, otherwise the effects could be destroyed by risk events. No one likes to talk about risk, but everyone knows that risk cannot be ignored. For example, Peter is a manager earning $5,000 per month. He can save $500 per month. It will take him 20 months to save $10,000. But it will take just one strike of serious illness to wipe out his $10,000 savings. This example shows that however unpleasant risk is, one cannot ignore it
The “Why” of Wealth Protection
Why do we protect our wealth? We protect our wealth for the following reasons
The following diagram summaries the all the above illustrations.
It is important to document the risk management and insurance plans so that one can keep track on one’s wealth protection plan. The presentation is as follows:
Table 1: Insurance Summary
Insurance Policy | Sum Assured | Premium | Owner & Beneficiary | Effective & Expiry Date | ||
Death | Disability | Critical Illness | ||||
Policy 1a. Ins Co | ||||||
Policy 2 | ||||||
Policy 3 | ||||||
Total |
It is wise to work with a licensed and well-trained adviser to work through these processes. When you know that you have a credible risk management plan in place, it gives you security and confidence to take on life’s challenges