3 Reasons to Review your Insurance Policies & Investment Portfolio Annually
Do you feel that you have been spending too much recently?
Do you feel that your savings is not growing at all?
A lot of times, we let time past without realising we have neglected our finances. Some may feel that reviewing their finances every year is not necessary, but it is very important to know where you stand and how fast you want to reach to your destination in terms of your financial goals.
We need to have the awareness before we will take any actions. And these 3 reasons may convince you why you have to do so!
1) Changes in your life
A lot of things can happen in a year, and i mean a lot. Who knew we will have the option to work from home now? And we have to wear a mask everywhere we go?
Many changes can happen in just a year, especially in terms of our career, like graduating and starting a new job, working for a few years and deciding to have a change of environment, or some of you who want to venture to become entrepreneurs. These changes in our career can have huge effects on our income and expenses.
Not only that, there may be some life stage changes for some of you. Like getting married, moving into a new house, having kids and taking care of your retired parents. These means more responsibilities and more money needed.
While working hard for your money, you would want to make sure your wealth is protected as well. Thus, such annual changes can trigger substantial changes in your insurance coverage needs and your annual premiums.
A yearly review of your insurance policies gives you the opportunity to explore how these changes affect your coverage needs and allow you to consider changes or shortfalls you might want to accommodate to.
2) Stay up to date with the insurance market
Every year, there will be changes in the insurance markets. For example, insurers releasing new products, offering new coverages such as covid coverage, and insurers merging like Aviva and Singlife. There was also the critical illness definition change from Life Insurance Association (LIA ) Singapore in August 2020 and a new national long-term care insurance scheme called CareShield Life launched on 1st October 2020 for Singaporeans and PRs age 30 years old and above.
These changes in the market can better allow us to know what we are missing out on and how we can position our insurance portfolio better.
3) Inflation rate + Interest rate
Lastly, the two Is that will keep appearing in our life. Not iphone but inflation rate and interest rate. Are you aware what is the annual inflation rate in Singapore?
Instead of working hard for the money, we will also want our money to work hard for us. If we are not growing our money wisely, our wealth will devalue over time due to inflation.
We are also living in a low interest rate environment right now, with many banks cutting their interest rates in multiple bank accounts. So what other avenues are there to grow our money?
With education inflation rate increasing by double digits every year, how do you plan to save up for your child’s education? Do they want to study local or overseas?
And since it’s low interest rate now, have your considered refinancing your house loan? CPF loan is 2.6% and banks are currently offering loans lower than 1.5%. Are you leveraging on the low interest environment as well? By refinancing, do you know how much you can save in total?
Thus, by identifying these questions, you will know why having the annual review of your savings and investment portfolio can help you to identify gaps that you are lacking and allow you to fill it up easily with some advice given.
So why not start reviewing your insurance policies and investment portfolio now?
