Medical insurance is often not enough
when living abroad
By Trevor Kiedan
WHEN it comes to investing, you should broaden your horizons - and this is especially true when choosing how and where to invest your money.
There are many who think that they should invest in specific countries and markets, especially for those living in emerging markets such as Cambodia.
It can often be tempting to think - while living in a place such as Cambodia - that there is once-in-a-lifetime access to unique opportunities that will inevitably reap huge rewards.
And although this might well be the case, it is not a subject that is dealt with in this particular column.
There are those in (and outside) Cambodia who are better placed to offer advice on this type of investment.
In this column we offer advice to those people living in Cambodia who want help planning their financial future to meet their own personal objectives.
Such objectives can range from retiring comfortably to saving for children's education.
Although most investors have their own individual personal finance needs, many people in Cambodia will find they need medical insurance, as well as a pension plan. This is especially true for expats.
Medical insurance is there to protect you and your family and is often overlooked. People often think they can do without it and only realise that they need it when it is too late.
Today in Cambodia there are a number of good hospitals and clinics.
In addition, the cost of medical treatment is relatively low compared with other countries.
With this in mind, it is easy to forget the consequences of becoming ill or hospitalised.
People often forget that hospitalisation - or a prolonged illness - can mean loss of employment and income.
In addition to medical insurance, there are a number of other types of insurance that should be considered.
For example, there is life insurance whereby the insurer pays the nominated beneficiaries a sum upon the death of the insured.
Another type of insurance is critical illness cover.
This can either be an addition to an existing insurance policy or can be a stand-alone product.
This type of insurance pays out to the insured in the event of a critical illness. The insurer often limits this type of insurance to certain clearly defined illnesses.
And, even though Cambodia is a fast-growing emerging economy, there are many medical insurers that will not offer insurance cover to those living here.
Even though this is improving, those seeking cover still face the challenge of finding suitable cover from suitable insurers.
This is where the services of a personal financial expert or even an insurance broker can come in useful.
Another facet of personal finance that is often required by people living in Cambodia is a personal pension.
A personal pension plan is often taken for granted by those living in Western countries.
In the United Kingdom, for example, there are state as well as individual pensions.
The state will provide a certain level of pension for those over the age of 65 for men and 60 for women. This is intended to alleviate the risk of poverty in old age.
In the United States, it is often the employer who provides a pension plan, encouraged by generous tax incentives from the US government.
Many of us living overseas (and I'm sure this applies to many living in Cambodia) do not have the luxury of having a state or employersponsored pension plan. We have to "fend" for ourselves.
Fending for ourselves often means investing in funds in order to achieve an amount of money that will see us through our retirement - which could be 30 or more years away.
It also often means paying in to a regular savings plan - and this is where we have to broaden our horizons.
Instead of concentrating on specific countries and markets, we should consider investing - on a regular basis - in diversified investment funds.
It is often safer and hassle-free (especially when it comes to managed funds). Hopefully this will give you the peace of mind you might need as you save for retirement.
After all, your money matters!
Trevor Keidan is managing director of Infinity Financial Solutions. Contact him at [email protected].