Fund Allocation for Life / Critical Illness / Medical Insurance

In my previous posts on insurance planning, I have been emphasizing the importance of insurance as a protection tool to cover our financial aspects in any unforeseeable circumstances.  Due to different in nature on different kind of insurance policy, I also advocate to spend less on insurance premium while getting the highest possible protect and invest the rest for maximum return.


Based on the above, we should treat insurance premium as an expenses and do not expect to get it back in the future.  You may refer to my post on Purpose of Insurance for the logic. 

Now, the question is, how much should we "spend" on insurance.  Well, we have many lifetime commitments to fulfill while every commitment plays important role in your life.  You will be unable to fulfill any of your commitment in case of incident that may affect your ability to do so.  Therefore, as a general rule, allocate a maximum of 10% of your monthly take home pay for your insurance premium.  Most importantly, work closely with your insurance agent on your insurance needs and how to meet these needs within your allocation. 

The bottom line is, you need a good and responsible agent to get through all these.

Good luck.