When I first arrived in Singapore 14 years ago, I decided to practice what I preach and start planning my finances. At the time, my philosophy was simple – spend less than I earn and invest the rest. That worked very well until one day, my wife came out of the bathroom waving a positive pregnancy test at me, and the realisation set in that I was soon going to be responsible for another human!
My priority was setting up a Life Insurance policy, so I knew my wife and daughter would be taken care of financially if something happened to me. But unfortunately, having worked in this industry for a number of years, I know of people who have passed away leaving their families with nothing, and I was adamant this wasn’t going to happen to us.
It’s very common for people to insure things that are valuable to them, like their homes, cars, and jewellery; however, more often than not, their most valuable asset – their ability to earn an income – is left uninsured. If you had an ATM in your house that automatically dispensed S$15,000 at the end of every month, would you insure it in case it broke down?
As a starting point, it’s recommended that you have 10-15 times your annual income in coverage, although your own circumstances will dictate whether you need more or less than this. For example, any outstanding debts will affect the amount you need, as will the number of people dependent on your income.
The process of setting up the policy was very quick and easy. For the majority of people, no medical tests or checkups are required. Life Insurance can be very affordable; the earlier you get covered, the lower it will cost. For example, a 35-year-old female non-smoker can expect to pay less than SGD50 per month for SGD1,000,000 cover to age 60 – that’s less than a few dollars a day! Spending such a small amount to secure my family’s future was a no-brainer for me, and I didn’t think twice about this.
Setting up a Will
Once my daughter was born, the next task on my “To do” list was setting up a Will. Writing a will helps protect your loved ones from uncertainty after you die. In addition, providing guidance to your next of kin through a formal Will can reduce the stress and anxiety of the people you care for.
As an Expat living in Singapore, this was especially important for me. Living overseas away from our family and having bank accounts and other assets in multiple countries, I could see things getting complicated if we didn’t have this in place.
My four key reasons for writing a Will were:
Appointment of Guardians:
Having children really focused my mind on how I wanted to plan for our future. Setting up Life Insurance will help your children financially, but you also need to decide who is going to take care of them day-to-day if both parents were to pass away before they become adults.
Control of Your Estate:
This is often the main concern for people when writing a Will – how to ensure your money and possessions are distributed in the way you want them to be. Not only does this put you in control of your estate, but it leaves less room for disputes and arguments over who should get what.
Avoid Intestacy Rules:
If you die without making a Will, your estate will be divided according to pre-prescribed rules rather than in line with your own wishes.
Reduce the Time for Distribution of your Estate:
If you die without a Will, the process of probate can be lengthy and costly for your family. In addition, it may take a long time for your assets to find their way to your loved ones. Having a Will in place means that the process can be relatively quick and reduces costs and stress for those whom you want to protect.
The third and final piece of the puzzle was appointing friends here in Singapore to act as temporary guardians. If you are an Expat, it’s likely that the legal guardians whom you are appointing in your Will are based overseas. If that’s the case, then you will need to appoint temporary guardians until the permanent guardians arrive and can take on their responsibility. This is very simple to do and costs nothing; however, it has to be done after you’ve set up your Will.
You need to be careful to appoint a temporary guardian who will be able to fulfil the role for a meaningful period of time. It is best not to appoint your domestic helper to perform this role, as her residency status in Singapore will be tied to her employment with you.
Setting all this up was well worth the time and effort it took – I know it’s taken a huge weight off my wife’s shoulders, and she now has the peace of mind that should something happen to me, financially speaking, she has nothing to worry about. Fast forward four years, and we’re now looking at schools and thinking of how we plan for University Fees……
About the author – Originally from the Isle of Man, Rob accumulated a wealth of experience whilst working in Banking and Insurance for more than 10 years before moving to Singapore in 2008 to build a career and a business helping people manage, protect, and grow their wealth.
He believes managing and investing money is an essential life skill that, for many, is time-consuming and/or seemingly complicated. Rob is passionate about educating and helping people so that they can: Create wealth | Manage their wealth | and protect their wealth.
Rob is qualified and regulated by the Monetary Authority of Singapore as a Financial Adviser Representative (RJH100069850). Trusted by his clients, Rob prides himself on the close relationship he maintains with his clients.
Rob has been working as a Wealth Manager in Singapore since 2008, helping Expat’s to manage, protect and grow their wealth.
Thanks for taking the time to read my blog. I hope this post has given you the information you need. If you have any recommendations, tips or advice, I would love for you to share them in the comment section below!
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