5 worst mistakes you can make when it comes to protecting your pay cheque.
The Pay Cheque makes everything in your life possible.
Pays the bill. Feeds the family.
And buys an inordinate amount of looks-great-but-useless products during the 11.11, Black Friday and 12.12 sales.
On a specific date in every single month, your pay cheque comes in like clockwork.
You are so used to it that you no longer bother to check it anymore.
Not once, you have stopped and asked yourself this question.
What if it stops one day?
You may think that it is no big deal. Find another job or drive an Uber.
Not so quick, my friend.
We are talking about a situation that you can no longer work due to unforeseen accidents or illnesses.
Are you still prepared?
Or have you been making some of these common mistakes?
Your company will not continue paying you.
You are almost indispensable to the company.
The CEO, the finance controller or simply the old hand who has been around since the start of the firm.
There is no way that the company can get rid of you.
This is precisely why they will have to replace you somehow.
Your role is too important to be left vacant.
The business has to go on.
On the other hand, your job will definitely be gone if you provide little value to the company operations.
It is harsh but they have been waiting for the chance to fire you.
This represents the golden opportunity.
The harsh reality is that companies are businesses.
And businesses always look out for its own interest first.
A cog that is not producing will definitely be replaced, regardless of its importance.
You may enjoy a few weeks or months of medical and hospitalization leaves.
However, those pay cheques will cease at the very end.
Your savings are not adequate to tide you over.
Life is like a box of chocolates eh?
Except this box is full of other brown stuff that stinks.
Accidental injuries, chronic illnesses and dread diseases may be some reasons why you lose your pay cheque.
It is never easy to make a holistic recovery from injury or illness.
We are not just talking about the return of the bodily function or remission of cancer cells, but a complete return to fitness and full mental recuperation.
That will take more than just a few months.
In addition, living expenses may actually increase during your downtime.
You need to spend more on medication, nutritious food and special transports.
These are not part of your planning eh?
We can see that you are having some doubts whether you can handle the long absence of pay cheques.
Stay tuned to the end of the page for the solution.
Eldershield is insufficient.
Let’s say you are more than 40 years.
A Singaporean who has not opted out of Eldershield.
You can claim from Eldershield and be perfectly covered right?
The answers are no and NOOOooooo!!!
The condition for making a successful claim on your Eldershield Policy is extremely stringent.
$400 per month for a period of 72 years is inadequate, no matter how you look at it.
Plans are afoot to change how Eldershield operates
Mainly on whether it should be made compulsory and who should administer it.
Frankly, that is missing the whole point.
The company has not insured you.
“Hey, my company has comprehensive insurance package for the employee.
I am sure there is something there to help me.”
Yes and no.
The most common employee benefit is usually group term life and group health & surgical plan.
Perhaps your kind HR head throws in a group Personal Accident plan that can provide some relief.
That is it.
Most companies do not buy Disability Income Insurance for their employees.
It is not that they are horrible bosses but that is simply the norm.
Check things out with your HR to confirm whether your pay cheque is protected.
And start fretting about how fragile your rice bowl can be.
The government will not provide for you.
Sorry for laughing.
It is an involuntary reaction that we cannot control.
We are sure there is some sort of welfare funding for the disabled in Singapore if we look hard enough.
It is just not easy to find in the first place.
We have looked through the government website SG Enable and find nothing that offers any monetary aids.
SG Enable has various schemes for you to apply for handicapped lots, adult disability homes, workshops for employment, etc.
A really helpful bunch of services.
However, you have to make your own living.
While we support the notion that you must help yourself before the government steps in to assist, one will need quicker help than that.
When you are battling to stay alive, working is the last thing on your mind.
And you may not be able to have the capability or energy to do so.
Even if there is welfare for the disabled, we are sure that the means-testing and bureaucracy will delay the process.
We are pretty sure that you still need to eat in the meanwhile.
Protecting your rice bowl.
What can you do about it, having learnt that most of your assumption is misguided?
First off, you must have sufficient savings.
Experts have recommended that you must have minimally 3 months of your monthly pay cheque but a good 6-9 months will be ideal for an emergency fund if you ask us.
We shall come to the reason shortly.
Getting a Disability Income Insurance is your next critical step.
Disability Income covers a percentage of your income when you are unable to work.
By replacing part of your pay cheque instead of losing it completely, you can stretch out your savings a little more.
More importantly, DII has a more lenient definition of disability when compared to Eldershield.
If you lose your job, it will pay.
If you can work in a lesser capacity, it will make up the difference.
We do have to warn you that DII has a usual waiting period of 60, 90 or 180 days before it starts to pay out.
That is why we recommend for an emergency fund of 6-9 months.
What is the point of having a policy that doesn’t pay out immediately?
At the very least, you can clearly know what your target saving should be as opposed to making a wild guess.
Losing your pay cheque due to unforeseen mishaps usually signals a traumatic period for you and your family.
Why not make it easier on you by having a backup rice bowl?
It allows you to continue getting some income while recuperating.
With less stress and worrying about finances, chances of a complete recovery are definitely going to be much better.
Drop us a line and we will make sure that your spare rice bowl is ready to go!
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.