How much coverage should you have?

Many people that I encounter does not have adequate protection. Even though they have many policies and pay high premium, most of them are still under-insured.

Why? well it might be because they choose the wrong plan or they under-estimate their future economic worth.

Just as a guidelines, I will share some tips with you about how much you should cover yourself.

Tips:

1. For death and disability coverage, look for at least 10 times your annual income. So if you earned $100,000 a year, you should have at least $1 million coverage.

2. For critical illness coverage, look for at least 3 times of your annual income. So if you earned $100,000 a year, you should have at least $300,000 coverage.

3. For hospital coverage, look for at least $500,000 yearly coverage.

4. For premium, we always advise our clients not to pay more than 10 percent of their annual income. So if you earned $100,000 a year, try not to spend more than $10,000 on insurance. As some insurance plans are a long term commitment. So you have to make sure that you can afford it in the long term.

Of course the above is just a rough guidelines, but it is a good start if you want to plan.

The numbers may look big to some of you, but trust me, when things happen, you will appreciate that you have a big coverage.

Cheers! Have a great day.