Managing your personal risk

What are the key financial risks faced by a young person?

1. Chance of death during the next 30 years: 2%
2. Chance of critical illness during the next 30 years (not resulting in death): 3%
3. Chance of surviving for 30 years without critical illness: 95%

Many people spent too much money insuring against death and critical illness, which has a 5% chance of occurring. They overlook to insure against the 95% chance of suriving for 30 years and NOT HAVING ADEQUATE SAVINGS for retirement.

It is important to allocate savings to earn an adequate rate of return in a diversified, low cost fund. The savings should NOT be invested in a high cost financial product that takes away more thn 50% of the yield.

For the protection against premature death or critical illness, you can buy a decreasing Term insurance policy with a rider to provide a modest amount cover for critical illness.