Before year-end, if we had to pick just one critical financial planning action most people overlook, it would be this:

Review and update your insurance coverage, especially critical illness protection.

Why this tops the list

While debt reduction and legacy planning are vital, the financial shock of a major illness can derail both your savings and long-term plans instantly. Many professionals think their company group insurance or hospital plan is “enough,” yet:

• Critical Illness (CI) payouts are for income replacement and recovery, not hospital bills.
  They give you liquidity to stop work, pay for alternative treatments, or fund caregiving.
  
  
• Analysis of major CI claims in Singapore suggests that the highest volume of claims occurs in the early 50s (with many happening from the early-40s to mid-60s). (Sources: SmartWealth, WellNex)

Considering the 40s to 50s are peak earning years – when mortgage and family responsibilities are highest – having adequate CI protection ought to be a priority for many of us. 

While procrastination lingers, waiting until 60+ to review your CI coverage may mean you are already in the highest-claim age band.

• With rising longevity, the probability of facing one or more major health events before age 65 is far higher than most realise. Don’t wait till a health crisis and by then, it will be too late.

What happens if you don’t review it now

• A gap discovered after diagnosis cannot be fixed. No insurer will offer coverage once symptoms or investigations start.
  
  
• Out-of-pocket recovery costs (lost income, home modifications, long-term care) can wipe out years of investment gains.
  
  
• Your legacy and retirement plans are jeopardised – funds meant for children’s education or future income are diverted to cover today’s crisis.

Year-end action steps

1. Check your existing CI coverage (personal + group). Aim for at least 3 – 5 years of income as lump-sum protection.
   
   
2. Review your policy expiry and sum assured. Older CI plans may cover only late-stage conditions. Consider upgrading to multi-stage or early CI plans.
   
   
3. Update beneficiaries and ensure nominations are filed (especially for insurance and CPF).
   
   
4. Reassess your protection after any major life change like a new job, new home, additional dependents, or business.

In essence:

Before you chase higher returns or plan your estate, protect your ability to earn and recover. Financial planning is not just about wealth creation – it’s about wealth continuation.