Before you BUY your first/next insurance policy…

There’s a saying in the medical profession –

Prescription before diagnosis is Professional Malpractice

Does anyone go around buying prescriptions (or stalking up prescription) like Metformin, Lovastatin, Paracetomal?. I hope you DON’T. The obvious answer is NO!. IF you are NOT diagnosed of Diabetes, High Cholesterol or Headache. The proper procedure is to seek consultation from a qualified and licensed medical practitioner.

Similarly, does anyone go around buying Insurance policies (whole life, term or endowment). Again, I hope you DON’T. The obvious answer is NO. The proper procedure is to engage a financial planner who will assist you with a proper financial 'health' screening to identify your financial health. This is called Fact finding. After the fact find, he would compile and analyze the data before generating a (financial) health screening report.

The BASIC foundation of Financial Planning is (NOT Insurance but rather) Budgeting, Cash Flow Analysis and Balance Sheet. This would help the Planner to determine your current financial situation. Without this, I see it would be entirely impossible to determine your financial needs – cash at hand, emergency funds, retirement funding and/or other financial needs of the future; Or for that matter, recommend a solution because complications WILL arise.

Without going through the above exercise, it’s like you being victimised by a ‘financial’ doctor who sells/dispenses prescription(s) without a proper diagnosis of your (current) medical history and family medical history. You could be very wrong to seek a similar medical practitioner!

After the ‘financial’ doctor (Planner) had identified your risk(s), YOU, as the Client would

·         acknowledge the risk and

·         prioritize your goals to manage the financial risks!

The Planner would then recommend appropriate financial solutions from various financial institution based on your

·         Stage/life cycle – just started work, getting married, having children, pre or post retirement

·        ( If you have) Dependant(s)

·         Your specific criteria,

·         Budget, Cash Flow & Balance Sheet.

·         Time horizon

·         Risk profile

·         Income tax

It would be wise TO seek a Planner who is able to provide financial solutions from various financial institutions because there is/are NO ‘best’ or champion product in the market. This is because various providers will differ on price, potential returns, features which would have been the Planner being able to provide you with INFORMED SOLUTIONS FOR YOU TO MAKE THE RIGHT DECISION!

Buying Insurance policies may seem very simple BUT the actual guidelines or procedure is NOT as simple as it seems. The Planner needs to match your need to a specific risk.

If you had purchased financial solutions without following a proper procedure, I strongly suggest you re-visit the financial planning proper with a qualified and experienced financial practitioner.

Financial Risk Managements -

·         Hospital and Surgical expenses

·         Potential individual/personal loss of income in the event of premature loss of life, disability or major illnesses

·         Mortgage on your biggest investment – your property

·         Savings and Investment Risk

·         Long Term Care Income

·         Child education funding

·         Child protection

·         Retirement funding

·         Legacy Planning

·         Personal Accident/Public Liability

·         Income Tax and Estate Planning

·         (Not an exhaust list, hence, you are advised to prioritize your needs!)

Most people do not PLAN to FAIL, they just FAIL to have a proper financial PLAN!

Having a proper financial plan, and executing the financial plan, there will be a financial peace of MIND!

In similar articles, Category/Insurance on this site, With the above, I hope the readers will NOT be Conned by Salesman who are selling/pushing products at various sites/sales booth. (NOW being equipped with knowledge of Financial Risk Management and NOT buying Insurance.) Similarly, financial providers who could assist the Public to identify a solution to a specific risk management rather selling a product.

Prescription before diagnosis is Professional Malpractice

(The above is my SUBJECTIVE opinion. Various Planners may have different financial planning procedures which may differ. There is NO right or wrong solution. It would be advisable to seek a 2^nd opinion or other financial planners who may think out of the box!)