When is then a whole life plan favourable over term life?
On a serious note, WL policy is just a term insurance + savings plan.
I fundamentally agree with Mike here, but I can think of a small number of reasons why a whole life insurance policy might make some financial sense (in no particular order):
1. In some jurisdictions there may be tax-related reasons favoring a whole life insurance policy. It might be a way to pay executives higher compensation in a more tax efficient way, for example. As another example, it might be useful to pay estate or inheritance tax. I don't think tax-related reasons apply much in Singapore, though.
2. Whole life insurance might be a type of asset that's better protected against creditors and court judgments in certain jurisdictions.
3. In low life expectancy countries whole life insurance might be virtually indistinguishable from term life insurance in terms of premium, and whole life insurance ends up being the more competitive market segment.
4. When there's a predictably permanent (or near permanent) dependency. For example, if you provide valuable volunteer service to a charity that would be hard or impossible to replace except with paid help, and if you want the charity to endure, then you might get whole life insurance with the charity named as the beneficiary. (However, I think the generally better way to handle this is to get enough longevity insurance then endow the charity with all the rest of your wealth as soon as you can.)
5. You either don't save without the "threat" of a premium bill, or you don't know how to invest prudently, or both. In that case, even a very high cost savings vehicle (a whole life insurance policy) might be better than nothing.
6. You've got a family member who sells insurance, the family member isn't doing well financially, you want to help that family member out, and either or both of you have some issues helping each other out straightforwardly. In that case you might buy a whole life insurance policy you wouldn't and shouldn't ordinarily buy that ends up generating a commission for your family member. It's a very inefficient way to deliver needed help (the insurance company gets a big cut), but maybe it's the best you can do.
7. You want to transfer wealth to a child, grandchild, or other younger person, but you want to do it in a way that maintains the illusion your gift recipient is less wealthy than he/she actually is. You want to do this so that your gift recipient still qualifies for need-based university scholarships, housing grants, and other benefits. A whole life insurance policy might work in this situation depending on how the financial need calculation works.
