“How much is your life worth to you?”
This question was last posed by a philosophical robber who decided to illustrate his point that my life is priceless and I should not be doing anything funny to jeopardize it.
I surrendered my handphone and wallet immediately upon hearing such an illuminating question.
While it may not be the best experience, moments when your life is on a knife-edge (pun intended) make you wonder about the price tag of your very own life.
The obvious answer is priceless but it is such an easy way out!
Everything has a price.
As tasteless as this may sound to some, it is socially important to place a price on life.
Sometimes government bodies and the Courts have no other option to place a dollar value on human life.
Not due to any sinister intent but to ensure that a fair compensation or monetary punishment is meted out.
For example, the estate of a fatally-injured victim of a motor accident will claim against the wrong-doer and the Court must make an evaluation of the deceased’s worth.
For individuals that are still alive like you and me, it is still useful to ponder over the question.
Only by getting the value right, you may obtain the right amount of life insurance coverage.
You cannot answer the question from your very own perspective alone.
Instead, you need to view it through the lens of those people around you.
Let’s run through some of them and check on your financial and emotional net worth, shall we?
Looking through the eyes of your parents.
You have been a grateful recipient of your parents’ nourishing love.
Now that you are all grown up, it is only right to reciprocate.
Not merely just love but financial support.
They deserve to have little financial worries during their retirement.
Just like how you managed to enjoy your childhood without a care in the world.
Although they do not expect you to provide for them, you definitely would like to do so.
That may not an issue if you are around.
But what if you are not?
To find out just how much you need to set aside if anything were to happen to you, you have to take into account of how much your parents need on a monthly basis and estimate the number of years that they are most likely to live till.
You may take the national life expectancy number or you can base it on an optimistic assumption that they are going to live till 100 years-old.
Putting yourself into the shoes (and booties) of your family.
You may be the family’s sole breadwinner.
In this case, your partner and your children are financially dependent on you.
Most likely, you are everything to them
For them to continue their existing lifestyle without you around, it will take an enormous amount of money.
You can probably look at your monthly household expenditure and extrapolate it by the years before your children are going to be financially independent.
For your partner, it will be for his or her entire life.
Not only do you have to account for their monthly upkeep, you also have to save up for the kids’ tertiary education which is exorbitant.
The cost of tuition fees for a 4-years course at NUS will drain about $40,000 to $80,000 depending on the course. This is only applicable if you are a Singaporean and hence, entitled to tuition subsidies from the government.
Doing a honest self-evaluation
The last person is probably the most important one so far – yourself.
We love to be healthy and physically capable till the last day of our lives.
However, the reality is that accidents, illnesses and injuries are likely to strike at some point of our lives.
Do you have enough savings to tide you over the most difficult phase of your life?
How long will you need to get yourself back on your feet?
Are you making a smart decision to protect your savings from the ravenous hospital bill?
How many years are you apart from financial independence?
Is the inflation in the coming years going to stretch your goal further?
Take some time to think deeply about these questions and you may just find your true financial value.
Context is king when it comes to the value of life.
In Singapore, the life of a NSF is worth about 150k.
This is not a figure that we place but one that our government assumes for our full-time national serviceman.
How much one is worth is largely contextual.
It depends on the age of the person, the current earning capability and how many financial dependents he or she has.
That is why we need to step into the shoes of those who depend on us to find out how much we are worth and insure ourselves properly.
Get your calculator or excel spreadsheet ready!
Wait. There is an easier way to calculate your worth!
We understand it is a hassle to do all that on your own.
That is why we have that all computerized for you.
We have inputted all of the above questions and more into our Robo-advisory tool so that you do not have to do the complicated calculations by yourself.
Now you may skip all the calculation part and head straight for the answer.
Suss out your coverage gap and fill them up prudently.
Make your life truly worthwhile for you and everyone else around you!
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.