We all have different dreams and goals at different stages of life.

There are young people who are just beginning their careers, or who want to start their own business and become a rising star of the business world. There are couples who have dated for several years and hope to get married as soon as possible, buy property and establish a happy family. There are parents who want to give their children the best possible resources so that they can have a quality education, laying the foundation for a bright future.

In addition to determination and hard work, you also need abundant capital to realise your dreams, and many people's capital come from the most basic method of financial management — savings. The Hong Kong Deposit Protection Board¹ interviewed 1,000 adults and found out that 65% of them had adopted a saving habit and the median average monthly savings amount was HK$5,000.

Starting a business, getting married, and paying for a down payment or children's education fees will cost hundreds of thousands, or even more than HK$1 million, which is very costly. If you want to save HK$5,000 per month for a down payment of HK$1 million at a compound annual interest rate of 1%, it will take more than 15 years to do so. In fact, some bank deposit interest rates are at even less than 1% these days, so it will take an even longer time to reach your savings target, but the risk is relatively lower.

There are also other channels to accumulate wealth on the market so that people can choose the right financial management tools for themselves. These include savings life insurance with different payment periods and expected break-even years. They provide life protection while at the same time allow the policyholders to earn a steady return after a certain expected policy period, taking the policyholders one step closer to their goals.

Savings insurance is a life insurance with a saving component; it is also a premium contribution plan with a fixed payment term and fixed amount. Upon policy matured, the policyholder can get the paid premium and dividends (non-guaranteed), and the total return of most savings insurance depends on two parts: guaranteed value and non-guaranteed value (i.e. dividends). There are long-term savings insurance (e.g. taking more than 20 years of premium payment term), and relatively short-term savings insurance (such as 1 to 3 years premium payment term, with policy year about 3 to 6 years), which are suitable for the insurance needs and savings purposes of different age groups.

For young couples who plan to buy a property after a few years and have life insurance needs, they can consider applying for short-term savings insurance. It offers life insurance coverage and at the same time also allows the capital to accumulate regularly, so that interest is earned and the capital appreciates. It speeds up the achievement of savings goals. If you have long-term financial goals and need life insurance coverage; for example, as a parent, you want to prepare an education fund in advance for your child to attend school in the future, then you can consider a longer-term savings insurance plan to provide enough cash for your child's education expenses when he or she is of university age.

Of course, the insured should also be aware that the dividend is sometimes not guaranteed and in most cases cannot be withdrawn until the policy maturity. The longer the premium payment term is, generally speaking, the higher the liquidity risk of personal funds is. Also make sure you can afford to make your contributions on time and have enough working capital in reserve for unexpected needs. If the policyholder needs capital turnover or has other reasons for early withdrawal, there is a chance that they will not be able to get back the entire paid premium, thereby incurring a loss. The insured must also pay the premium on time and continuously throughout the payment period. Therefore, there is a sense of "forced" saving. Before applying for insurance, applicants must clearly understand the contents of the plan and the relevant risks (e.g. credit risk and return risk), and must also be sure that they have the perseverance, patience, affordability, financial situation and sufficient working capital.