How much is too much?

After obtaining my certificate as a Certified Financial Planner (CFP), I felt a sense of fulfillment and purpose. Mastering financial planning skills is necessary to help people achieve their financial goals and dreams.

As I delved deeper into the world of personal finance, I realized that there was so much more to it than just obtaining a certification. It was about helping people navigate the complexities of their financial lives, and providing them with the tools and knowledge they needed to secure their financial future.

One of the most critical components of any financial plan is insurance. The question of how much insurance is enough is not an easy one to answer. It requires careful consideration of our specific situation and an understanding of the different types of insurance available.

In this blog post, I want to share my thoughts and experiences on this topic, based on an article from The Straits Times - https://www.straitstimes.com/business/invest/financial-life-lessons-how-many-insurance-policies-is-too-many Because to me, insurance is not just a number or a policy - it's a matter of emotional and financial security.

We all want to feel secure in our lives, and insurance is a critical piece of that puzzle. Whether it's life insurance to provide for our loved ones, health insurance to cover the costs of medical bills, or other types of insurance to protect us against disability or critical illness - the right insurance coverage can make all the difference.

But determining how much insurance is enough can be overwhelming. Insurance is more than just numbers and policies - it's about peace of mind. Knowing that you and your loved ones are protected against life's unexpected events can bring a sense of emotional security that is priceless. Insurance is a critical component of any financial plan. It protects us against unforeseen events, and can provide us with peace of mind knowing that we have financial support in case something unexpected happens. However, many people struggle with the question of how much insurance is enough.

So, how much insurance is enough?

The question of how much insurance is enough is a difficult one to answer. However, there are a few guidelines that can help you determine how much insurance you need.

1. Life Insurance:

If you have dependents, such as children or elderly parents, you should consider purchasing life insurance. The amount of coverage you need will depend on your income and the number of dependents you have. Basically it should serve as income replacement to take care of yourself and your love ones.

2. Health Insurance:

Health insurance is another critical type of insurance that everyone should have. It can help cover the cost of medical bills, which can be substantial in case of serious illness or injury. In Singapore, the government provides basic health insurance coverage through the Medishield Life scheme, but it may not be enough to cover all your medical expenses.

3. Other Types of Insurance:

There are many other types of insurance, such as disability insurance, critical illness insurance, and long-term care insurance. Whether you need these types of insurance depends on your specific situation, such as your age, income, and health status.

Conclusion: As a Certified Financial Planner, I am committed to helping people achieve that peace of mind through sound financial planning and advice. Insurance is critical to protecting our financial well-being and providing us with peace of mind. We should consider our specific situation and consult with a financial advisor or planner to determine what types and amount of insurance are right for you.