Build on the Rock
A client of mine made an interesting observation on the role of insurance: “One needs to protect against downside risks before contemplating upside gains”.
This reminds me of a piece of advice uttered some 2,000 years ago: “Furthermore, everyone hearing these sayings of mine and not doing them will be like a foolish man who built his house on the sand. And the rain poured down and the floods came and the winds blew and struck against that house, and it caved in, and its collapse was great”.
In some lands, certain kinds of insurance are compulsory. In others, most kinds are practically unknown. In addition, the cost of insurance and the type of coverage provided vary widely from country to country. But the fundamental principle of insurance—pooling of risks—remains the same.
Yet, is it wise to spend money on insurance even though a claim may never be made? Well, is keeping a spare tire in the car a wasted investment, even if the tire is never needed? The sense of security to the car driver may make the expense of the extra tire worthwhile.
Naturally, the more property a person owns, the more he has to lose. Similarly, the more family responsibility a person has, the greater the impact if he or she dies or becomes physically disabled. Having insurance can alleviate one’s concern about the possibility of suffering a loss of property or a disabling accident.
One responsible for a family might also provide health, disability and other forms of insurance for its members. Many single individuals carry insurance to facilitate obtaining needed services as well as to protect themselves from going into debt in case of accident or illness.
Insurance does not prevent storms in our lives. However, it can soften their financial impact significantly when such random events lash at us or our loved ones.
What kind of foundation is your household built on?
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek unbiased financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
Published By:
Norman Ngai
I spent 16 years of my career in multinational life and general insurers in both underwriting and claim management roles. This contributed to my deep and diverse industry experience, which will benefit my individual and corporate clients.
I am a proud representative consultant of Financial Alliance now, one of the largest financial advisory firms in Singapore.
Financial Alliance partners over 50 life/general insurers, 5 investment platforms, 71 asset management companies and 5 estate planning partners.
Be assured that you are in good hands, if you wish to embark on your risk management and financial planning journey with me.
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