Personal Financial Planning: Protecting Yourself with Insurance Portfolio

Personal Financial Planning with Insurance

What are the components of good financial planning? It would include a debt management plan, wealth creation plan, and wealth preservation and protection plan. Yes, your future should not only be about gaining more wealth but also about protecting your wealth. The way to do it is by having reliable insurance policies at hand, which can do much more than ensure have access to private healthcare providers when you need it. 

Let’s explore how insurance coverage can help you secure a better future for your family. 

Hospital and Treatment Bills Coverage

It’s a known fact that the government subsidizes the Malaysian public healthcare system. It’s affordable compared to private hospitals and healthcare faciltieis. However, the low price of Malaysia’s public healthcare also means that you will have to wait in a very long queue. If you need immediate treatment, you may need to pay a hefty price at your nearest private hospital.

So how can you avoid risking your financial planning without neglecting your health? Medical insurance is the way to go. Many insurance companies offer policies with sufficient medical coverage, from minor surgeries and dental care to critical illness treatments. You may be given a medical card which you can use to pay the hospital bills, or you may get reimbursement should you pay them first. Depending on your chosen insurance product, the insurance policy may grant daily allowances to cover your loss of income due to hospitalization. 

Debts and the Future of Your Financial Planning

Financial planning doesn’t stray away from debts. For some, they may leave university with student loans. Some time after that, the first major purchase would be a mode of transport – whether a motorcycle or car – purchased through a hire-purchase facility. Your ability to service them in a timely manner is crucial. But life can be unpredictable; having some protection would allow you some peace of mind. 

Whether it’s a mortgage or credit card debt, insurance plans like the Mortgage Reducing Term Assurance (MRTA) policy and credit card insurance plans can give you peace of mind. In the event of the policyholder passing, the surviving family won’t be burdened by the debt as the insurance company will pay the creditors. Your wealth will still be safe and can be a legacy to your family.

Unexpected Turn of Events That Leave You Permanently Disabled

When life gives you a lemon, learn to juggle. No one can foresee the future, and that’s the importance of implementing a long-term financial planning strategy. If you or someone you love have a profession or hobby that can inflict physical harm, it might be worthwhile to invest in good insurance. Sure, all activities can be dangerous, and accidents are not something you can predict, but it’s more reason why you should have insurance as a backup plan.

A disability may cause financial loss since the person must take some time adjusting to a new life. They may not be able to perform their job due to their disability. The cost of treatments and therapies that the person needs may also set back their finance. Having insurance can cover those payments and basic expenses. Most health and life insurance policies cover accidents and disability, so talk to your insurance provider to be sure.

Investment-Linked Insurance

Would you invest in or buy insurance? The best answer is to do both. Investment and insurance are two separate things with distinct functions, but if you want some practicality, you may choose an investment-linked insurance plan. This type of insurance combines basic coverage with an investment into a pre-approved fund managed by the insurance company’s partner. Most products are considered low-risk, offering payouts or returns upon maturity. Some insurance companies even allow their policyholders to move their money between equity and debt funds. 

Although it may seem bizarre to entrust your investment to an insurance company, you can be at ease knowing that your investment will be managed by professional and licensed fund managers attached to the fundhouses. 

Stop regarding insurance as something nice to have. Instead, treat it as something that you should include in your financial planning to manage or mitigate risks as well as preserving your wealth. Remember to review your insurance policy periodically with a licensed financial planner. You may add more riders or coverage to suit your ever-changing lifestyle. Start now, and your future self will thank you. 

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Disclaimer: The information provided to you in this blog post is intended only for general information purposes only and does not constitute legal or other professional advice on any subject matter. The materials and the information provided are not intended to be and do not constitute an advertisement or solicitation.  In no event will Funding Societies be liable to any party for any direct, indirect, incidental, special, consequential or punitive damages for use of such information by you or any unauthorized third party.