You will map your current cover against personal and business risks and rank the gaps.
You now have three lists from this module: what you lost when you left your job, how long your buffer lasts if your income stops, and the business risks in your work. This exercise puts them on one page as a cover map, so you can see every risk, what covers it today and where the real gaps are. It takes about thirty minutes. Lesson 4.4 of The Singapore personal finance system, Find the gaps in your cover, uses a similar map for personal risks, and this one adds the business side.
Write four personal risks down the left of a page: hospital bills, losing your income, death and long-term care.
Hospital bills means a large bill after an admission or a serious treatment. Losing your income means illness or injury that stops you working, as in lesson 6.2. Death means what happens to people who depend on you, such as a partner, children or parents you support. If nobody depends on your income, write that, because it changes how much this row matters. Long-term care means needing help with daily activities for years.
Below them, add four business risks: client claims, injury to others or damage to their property, equipment and unpaid invoices. These come from lesson 6.3.
If your work has a risk that is not on the list, add it. A driver might add vehicle damage. A tutor who works in students' homes might add injury to others.
For each risk, write what covers it today. Cover comes from four places: national schemes, your own policies, contract terms and your buffer. A risk can have more than one source, and it can have none. Be specific, and check before you write. "MediShield Life" is a real answer. "I think I have something" is not, so find the policy.
Here is Mei's map, with her situation made up for the example:
Hospital bills: MediShield Life only, with no shield plan of her own yet. Losing income: her buffer of 23 weeks from lesson 6.2, and nothing after that. Death: no cover, but nobody depends on her income today. Long-term care: CareShield Life, which she has checked she is covered by, and nothing more. Client claims: contract terms on image sourcing and approvals, and no insurance. Injury to others: nothing, but she works at home and in cafes, so the chance is small. Equipment: nothing, and one broken laptop would stop her work. Unpaid invoices: a deposit on every project, from her contract terms.
Now mark every risk where the cover is thin or missing. Then rank those gaps by the damage each could do, not by how likely each feels or how much you have heard about it.
To judge damage, ask two questions. How much money could this cost me, in bills and lost income together? And how long would it set me back? A risk that could wipe out your buffer and leave you borrowing ranks high. A risk that would cost a few hundred dollars ranks low, even if it is more likely.
Mei ranks hers like this. First, losing income beyond 23 weeks, because a long illness would leave her with no income and no buffer. Second, hospital bills beyond what MediShield Life pays, because a long private stay or a ward class above what MediShield Life is designed for could cost her much more than her buffer. Third, her laptop, because a sudden S$2,400 replacement cost plus days of lost work would hit her buffer hard, though it would not sink it.
Death sits low for her today because nobody depends on her income. If she later has children or starts supporting her parents, that row moves up, and she has noted it.
The map tells you what to look for. It does not tell you which policy to buy, and this course will not. Take your ranked list to a licensed financial adviser, or work through Insurance Decoded before you buy. Start the conversation with your gaps, in order. Ask how each suggestion closes a specific gap, and what it costs against your budget.
One page with eight risks, the current cover against each, gaps marked, and your top three gaps written at the bottom in order of damage, each with a sentence on why. Mei's top three, in order: income beyond 23 weeks, hospital costs above MediShield Life, and her laptop.
Gather your policy documents, your buffer figure from lesson 6.2 and your risk list from lesson 6.3 before you start the map in the activity.
Complete the freelancer cover map and write your top three gaps in order of the damage each could do.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).