31 Oct 2020
What do you guys think of setting aside 25% of salary to pay for premiums for a total of 11 policies for protection (health-related insurance), retirement planning and savings (endowment)?
Oh wow, 11 policies do sound like quite a bit. Given that you've included retirement planning and savings, I still hope you're doing a review to see whether you're overinsured!
I've heard that a general rule of thumb is to spend about 6-15% for insurance coverage.
I personally think 25% does seem like a stretch as we might also have to take into consideration situations where we might touch wood lose our jobs, etc. Please do check in with a trusted advisor to see whether this arrangement would be sustainable for you. :-)
You do have alot of things going on with regards to your own portfolio.
The general guidelines are,
30% Savings (Split into Liquidity, Long-Term and Investments)
These are just guidelines, 20% for insurance (protection policies), is usually avoidable through early insurance planning. The excess then overflows to the savings component.
You should categorise your portfolio into;
Protection Policies / Annual Income
Long Term Savings / Annual Income (Retirement and Endowment)
This way the percentages become more accurate for yourself.
If 25% of your income, is paid to insurance premiums which covers the difference aspects of your portfolio, based on the guidelines which i mentioned above, its actually within the healthy boundary.
Hope i was able to shed some insight!
Generally you shouldn't be spending >10% of salary to pay for insurance protection (shield,...
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