After eleven years in insurance, I’m increasingly sure of one thing: a good adviser does not keep urging clients to buy more. The role is to help them understand their finances and put limited resources where they are needed.
Start with the whole family’s protection
At a recent annual policy review, a client said she wanted to increase her critical illness cover.
Her monthly income was RM8,000, and she had RM500,000 in critical illness cover—more than five years of income. Taking her household expenses and cash flow at the time into account, I felt her cover was relatively adequate. That comparison was only a reference for that particular review. It does not mean everyone needs the same cover, or that recovery or a return to work is assured after five years.
Her husband had RM100,000 in critical illness cover. Whether his protection would meet the family’s needs deserved attention first. I suggested considering his cover before increasing hers, so the family’s arrangements could be more balanced.
The pressure of a critical illness is not limited to medical expenses. Income may stop, recovery may take time, and family responsibilities remain. Mortgage and car payments, children’s education and everyday expenses continue. That is why I look at whether protection is balanced across the family.
A budget is a reference, not a standard answer
When discussing budgets, I often use 10%–15% of income as a starting reference. It is not a standard answer.
Income, family responsibilities, risk tolerance and cash flow differ from person to person. I would not want anyone to put all their resources into insurance in pursuit of “complete protection”, at the cost of their quality of life or room for future savings and investments.
Protect first, then build; preserve what you have accumulated and plan how to pass it on
This review brought me back to four areas I have always valued: protecting today, building for tomorrow, preserving what we have accumulated, and planning for an effective legacy. These are not separate slogans. They are ways of considering today’s life alongside the responsibilities ahead.
1. Protecting today: can the family cope with the risks it faces now?
Protection needs to answer a practical question: if someone in the family is temporarily unable to work because of illness, what happens to the expenses their income used to cover? Treatment costs money, recovery takes time, and family life goes on. When reviewing protection, I consider these responsibilities together, not just the figures on a policy.
In this review, I did not focus only on the client’s cover simply because she wanted to increase it. Looking at her protection alongside her husband’s made it clearer where the family needed attention first. Protecting today does not mean buying the same amount of cover for everyone. It means understanding who carries which responsibilities, what gaps an interruption to income might leave, and what arrangements the family can afford.
2. Building for tomorrow: make room for future goals in today’s budget
There is more to life than protection. Children’s education, our own retirement and the choices we hope to have in the future all call for time and ongoing preparation. I would not want a client to increase cover by using money set aside for those goals.
When we discuss insurance, I also remind clients to leave room for savings, emergency funds and future plans. It is more practical to understand essential monthly expenses, premiums and what remains available, then build gradually according to their goals and means, than to commit too much at once and struggle to maintain it. Building for tomorrow does not mean putting all our money into insurance; a single policy cannot fulfil every financial goal.
3. Preserving what we have accumulated: understand the risks to resources already built
Saving takes effort, and the money we put aside often has a specific purpose. I consider whether illness or a change in household income could force a family to use resources intended for children’s education or retirement. A protection review can help identify where pressure might fall, rather than leaving a family to discover later that several goals depend on the same pool of money.
Family needs change. When income, loans or caring responsibilities change, existing arrangements deserve another look. Is the cover still appropriate? Are premiums affecting cash flow? Are enough resources readily available? By preservation, I mean reviewing risks and needs regularly in an effort to reduce the chance of plans being disrupted. This is not a promise that assets cannot lose value, or that any arrangement guarantees capital protection or a profit.
4. Effective legacy planning: make wishes clear and understand the arrangements
Legacy planning is not only about how much money we leave. It also means helping the people we care about understand whom these preparations are for and which responsibilities we hope to provide for. Rather than keeping those wishes to ourselves, we can organise policies and related records, review beneficiary or nomination arrangements, and let trusted family members know where the information is kept.
After marriage, the birth of a child or a change in family relationships, it is worth checking whether existing arrangements still reflect our wishes. Wills, estate distribution and other legal arrangements require appropriate professional assistance and must be handled in accordance with applicable law and policy terms. Insurance can form part of an overall plan, but buying a policy or making a nomination does not automatically resolve every legacy issue.
These four areas come back to one question: how can limited resources better meet our needs and those of our family? Not every stage of life calls for another policy, and one review cannot put everything in place. I hope to help clients understand their situation before deciding what comes next.
Faith’s observation
I hope clients remember not how many policies I sold, but that when they needed me, I was willing to see things from their perspective and help them make decisions that suited them better.
Sometimes, reviewing what you have is a valuable first step
If you already have insurance but are unsure whether your cover is enough, overlaps, or is balanced among family members, you are welcome to contact me for a free policy review.
A review does not mean you have to buy a new policy. Sometimes, simply understanding the cover you already have is valuable in itself.
Insurance is not about buying more. It is about helping you and your family live with greater peace of mind.
Faith Hew
Disclaimer
This article is for educational purposes only and does not constitute financial or insurance advice. Coverage terms are subject to the policy contract. Contact Faith for personalised advice.