C.A.P.S CHAPTER FIVE

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 “What” of Wealth Protection

The “How” of Wealth Protection

Financial Planning Tools – Wealth Protection Products & Insurance Summary

Let’s examine the types of wealth protection or insurance products.

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