FINANCIAL PLANNING
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Financial planners recommend that you take responsibility for your own protection and let your company supplement your efforts. 

IT'S EASY TO FORGET ABOUT insurance when you're drawing up a financial plan. Many people don't even think of it as an investment vehicle since insurance provides no returns--except, of course, in the worst-case scenario. But insurance should be the first thing you invest in before even setting up a savings or investment strategy. "The problem with insurance is that when you need it most, you can't have it," says Chris Beale of Towry Law, which advises clients on wealth-management issues. "That's why it pays to start early and invest in it for the future."

Many people simply rely on their employers to handle all of their insurance issues for them. But no matter how good the benefits package is, it comes with the job. What if you lose your job? What happens when you move on? With so many switching jobs almost once a year in places like Hong Kong, financial planners suggest that people take responsibility for their own insurance foundation. Instead of taking out your own policies to supplement the ones provided by your employer, you should think of it as the reverse. Your own personal policies should be the mainstay of your coverage, with the company's offerings as a bonus.

Life insurance is the first policy most people should invest in but here are some others that you should consider.

MORTGAGE PROTECTION
If you have a mortgage, you should get some kind of coverage that will repay the outstanding mortgage in the event of your or your spouse's death. The typical cost of mortgage cover is $310 per month for every $1 million assured.

INCOME PROTECTION
Most companies don't provide insurance for income loss and those that do fall far short of what is needed. In our example, John Wong's case ( see page 48), he was protected for $1 million by his employer. Unfortunately, that would only provide $50,000 per year of replacement income were Wong unable to work. Andrew Barber, CEO of wealth-manager Barber Asia, says you should have a policy that could guarantee two-thirds of your current salary. For Wong, that would be $100,000, so the level of cover should be $2 million. The key issue here is that although incapacity is far more likely than death, most people take out life assurance and neglect income protection. This type of cover should be set up for both John and his wife Fiona. The typical cost per $300,000 of cover is $35 per month.

CRITICAL ILLNESS COVER
Like most insurance products, this one is generally overlooked. However statistics show that 1 in 4 men and 1 in 5 women will suffer from cancer, a heart attack or other critical illnesses before reaching 65. Barber recommends that both John and Fiona Wong be insured for critical illness. The typical cost of a $300,000 policy is $110 a month.

EDUCATION FEES PROTECTION
You might also want to set up a policy that protects your children's education fees upon your death. But some policies can also provide you with significant savings by making early provisions against the long-term total cost of education. For example, the average cost of school fees in Britain is between £6,000 ($9,000) and £9,000 a year, increasing 7%-10% per annum.

University fees are often less than that but an MBA course could cost up to $30,000 per year. For the Wongs, the cost of sending two kids through school and university in Britain over the next 15 years could be as much as £250,000. Investing £150,000 in a policy now could provide for all these fees, assuming a 5%-7% return and a 10% escalation in fees each year.