Why you need to plan now for your children’s future, no matter how old they are

Children bring lots of joy into your life, but making sure they are well taken care of also requires a fair bit of financial planning.

Whether your children are still in diapers or already young adults, planning for their future is essential for your family’s financial security. The age of your family members will need to be taken into consideration as this will influence the financial goals you envision in the coming years.

Let’s see how two couples at different stages of their lives and family plan ahead based on their needs.

A newlywed couple who wants to start a family

Ian and Pauline are blissful newlyweds who are ready to move into their new home.

They both dream of starting a family and plan to have a child in the near future, so saving up for their first baby and financing the education of their offspring are key financial goals. They do not have life insurance protection yet but know that they will need it in order to protect their child and each other.

Finances are going to be tight for the next few years as they grapple with repaying their home and renovation loans, as well as the cost of furnishing their new home. Still, with what little money they have left over, they hope to begin planning for their child’s future as soon as possible.

ManuInvest Duo helps newlyweds and young families achieve their goals for the future

Ian and Pauline decide to purchase Manulife’s ManuInvest Duo, an investment-linked insurance plan that is suitable for families who want to both enjoy protection and potentially grow their finances at the same time. ManuInvest Duo’s monthly premiums are as low as S$150 a month. This is ideal for Ian and Pauline, whose cashflow is tight and who cannot afford to set aside a lot every month.

The plan gives Ian and Pauline the flexibility to choose how long they wish to pay premiums. They opt for 20 years in order to build up the account value of the policy for their first child’s university education.

Ian and Pauline have opted to insure their child rather than themselves as it is cheaper to do so. When their child finally goes to university in 20 years’ time, he can choose to receive a stream of income¹ from the plan. This will free up time from part-time jobs and enable him to focus on his studies.

Alternatively, the child can also use the income stream to tide him through hunting for his first job. That way, he will have the bandwidth to pursue a dream job, rather than settle for something out of desperation.

If the child does not need the money, Ian and Pauline can use the income for their own retirement needs.

A couple with grown up kids who want to plan for their own retirement

Albert and Lina are a couple in their late forties. Their children, Nathan and Jessica, are in their twenties and recently started working. For Albert and Lina, it is a great relief to know that their kids are done with school and gainfully employed.

At this point in their lives, Albert and Lina’s priority is to prepare themselves for retirement. They hope to retire in their sixties.

However, being well aware of the pressures facing the sandwich generation in Singapore, they do not want to have to rely on their children for retirement income. They feel that it would be stressful to have to rely on their kids, especially if expensive health emergencies were to happen.

They dream of having the financial freedom to travel and enjoy a retirement filled with leisure and enriching pursuits without having to deal with the guilt of asking their children for money.

RetireReady Plus (III) offers a lifelong retirement income

After careful consideration, Albert and Lina decide to purchase Manulife’s RetireReady Plus (III), an insurance retirement plan that gives them an option to enjoy a guaranteed monthly income² for life.

They will put aside a portion of their salaries every month to pay the plan’s premiums. From the chosen retirement age onwards, the plan will offer them an income² that can help to support them when they retire.

The plan also gives them a layer of security in the event of retrenchment³ by offering a lump sum payout. As they approach their fifties, Albert and Lina are acutely aware of how vulnerable they are to being made redundant and need the reassurance that they will be supported if they lose their jobs.

In addition, the insurance protection offered by the plan gives Albert and Lina the peace of mind in knowing that they won’t have to rely on their children if they suffer a terminal illness or experience loss of independence.

These two very different couples have tailored their retirement approaches to their family’s life stages. Find out more about ManuInvest Duo and RetireReady Plus (III) to determine which best serves your family’s needs.

Footnotes

1. Subject to the distribution rate and frequency of the chosen ILP sub-fund(s)
2. The Guaranteed Monthly Income (GMI), less any policy debt, will start one month after the policy anniversary immediately after the life insured reaches the selected retirement age and to the end of his/her selected income payout period.
3. Only applies to individual owned policies and policies where life insured is aged 64 and below, during the first 5 policy years (for SP policies); during your premium payment term (for RP policies); or before the policy anniversary immediately after his or her 65th birthday whichever is earlier

Disclaimer:

These insurance products are underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 198002116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying a life insurance policy is a long-term commitment. There may be high costs involved if you terminate the policy early, and your policy's surrender value (if any) may be zero or less than the total premiums paid. Buying health insurance products that are unsuitable for you may affect your ability to finance your future healthcare needs. Your investments are subject to investment risks, and you may lose the principal amount invested. The performance of the ILP sub-fund is not guaranteed. The value of the units in the ILP sub-fund and the accumulated income (if any) may fall or rise. This article is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product(s) in the policy contract.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC web-sites (www.lia.org.sg or www.sdic.org.sg).

We recommend that you seek advice from a Manulife Financial Consultant or its Appointed Distributors before making a commitment to purchase a policy.

Information is correct as of 29 September 2020