As you enter the decade between your mid-30s and mid-40s, you will likely be at your “peak earning”. At this stage of your life, retirement planning becomes an important part of financial planning.
Even as you go about building investments and income streams for your retirement, you have to be vigilant to the risks you face. For example, you may have bought an investment property to provide rental income in your retirement years. In the long-term, this property could be a valuable one providing a recurring income stream. However, in the meantime, you would have had to take on a housing loan to fund the down payment.
This housing loan, while taken on as part of a savvy retirement plan, creates a significant insurance gap. That’s because in the event something happens to you or your spouse, the surviving parent may be burdened with a strenuous mortgage to upkeep, especially if they have to ride out a weak rental market. That’s where a term life insurance policy becomes important.
Other risk areas associated with retirement planning include poor health or illness, which may force a person to take a break from working, at a time when their earnings, and financial commitments, are peaking. This could be detrimental towards an individual’s retirement planning goals and even have a more immediate impact of struggling to keep up with financial commitments.
To protect against this risk, individuals can consider policies such as the AIA Premier Disability Cover. Such coverage ensures that policyholders who find themselves being unable to work due to a disability continue to receive income to provide them with vital financial stability and peace of mind.