(Posted Saturday, 7pm)
Financial risk management is the study of financial impacts affecting an income earner in the unfortunate event of temporary or permanent loss of incomeof self, a loved one, siblings or dependants. One method of risk management is risk transfer. Without the client realizing a financial impact, the planner cannot proceed.

For e.g. the loss of potential income for a breadwinner, age 35, He has a wife and a child age 1. The family saves 35% (CPF and 15% cash savings). Supposing his annual income is S$40,000 a year. In the unfortunate event of premature death, he does not want his wife, sibling or loved ones to shoulder his burden. His potential loss of income for the next 25 years (cost of seeing his child through education and he also plans to retire at age 60) is 40k times 25 years. That’s a whopping S$ 1 …