You will write a household insurance plan and a one-page brief to take to any adviser.
By now Jun Hao had six files: a premium breakdown, a sum assured sheet, a three-structure model, a shield plan comparison, a critical illness sizing sheet and an income protection map. Each answered one question well, but none of them told Mei, in one place, what the household had, what it lacked, what they would spend to fix it, and in what order. And none of them was something he could hand to an adviser before a meeting.
This project turns your files into two documents: a household insurance plan you keep, and a one-page brief you give to any adviser. Allow about 45 minutes.
Start a new document with one short section per risk, in this order: life, critical illness, income and disability, long-term care, hospital. Under each, copy the figures from your earlier work: what you hold, what you need, and the gap.
Take them from the files you already built. Your premium breakdown from lesson 1.4 gives your current premiums. Your sum assured sheet from lesson 2.4 gives the life cover gap and term, and your model from lesson 3.6 gives the structure you chose. The shield plan comparison from lesson 4.5 gives your hospital decision, the critical illness sheet from lesson 5.4 gives that gap, and the map from lesson 6.4 gives your income and care gaps.
Rank the gaps by how much damage each would do to the household if it happened, as you did in lesson 6.4: the size of the shortfall and how long it could last. Likelihood matters, but a rare event that would wreck the household outranks a likely one you could absorb.
Then set a premium budget, meaning the total cash you're willing to spend each year on existing and new insurance together. No figure is correct for everyone, so base it on your take-home pay, your other goals and what you found in lesson 1.4. Write the number down before you see any quotes, so the quotes don't set it for you.
If the cost of closing every gap exceeds the budget, work down the ranking. Close the top gap first, then the next. Where money runs short, adjust terms before dropping a gap altogether: a longer deferment period, severe-stage rather than early-stage cover, or a shorter benefit period as a last resort.
The brief is one page. It should let an adviser understand your situation in five minutes and come to the meeting with relevant options. Include:
your household: ages, dependants, income, home loan and the year it ends your gaps in ranked order, with amounts and terms your budget for new premiums, in cash and from MediSave your preferences, such as term rather than whole life for life cover, and no replacement of existing policies without a written comparison the questions from lesson 7.1, How advisers are paid and what they must tell you
Attach your premium breakdown so the adviser can see what you hold. Ask them to respond in writing, with the product summary and benefit illustration for each recommendation.
Pick a date for your yearly review, such as the month your hospital plan renews, and put it in your calendar. Then list the events from lesson 7.4, When to review your cover as life changes, that would bring the review forward.
All figures are examples.
His ranked gaps:
First, income if he can't work: S$3,500 a month after eight months of leave and emergency fund, potentially for 30 years. He wants a disability income policy for about S$3,000 a month, own-occupation if affordable, with the deferment option nearest eight months and a benefit period to 65.
Second, life cover: S$950,000, less his DPS payout. That's the S$900,000 gap from lesson 2.4 plus S$50,000 to allow for his accelerated critical illness rider. Split as S$760,000 to age 54 and S$190,000 to 58, term cover.
Third, critical illness: S$100,000, early-stage, standalone or additional.
Fourth, long-term care: S$3,000 a month minus his CareShield Life payout. He'll get one supplement quote and decide at his next review.
For hospital cover he has no gap, so he keeps his A class plan and rider and will review the rider when he turns 60.
His budget: total cash premiums of no more than S$5,500 a year, about 8% of his take-home pay. With S$2,850 already committed, that leaves about S$2,650 for new cover. If quotes exceed it, he'll close the income and life gaps first and look at severe-stage critical illness cover to save money.
His review date is March each year, when his shield plan renews. Triggers: a second child, a move to a bank-financed home, Mei returning to full-time work, or a job change.
He sent the brief to Ryan and to one other adviser, so he'd have two sets of recommendations to compare against the same page.
A finished plan has a section for each of the five risks with what you hold, what you need and the gap; the gaps ranked by damage; a written premium budget; a one-page adviser brief with your household, ranked gaps, budget, preferences and questions; and a review date with its triggers. This course is education rather than financial advice, so take the brief to a licensed adviser before you buy, and decide on the recommendations with the plan in front of you.
Write your household insurance plan and adviser brief, and book a date to review them.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).