Buy term till what age??

[Jwlng]

Can I ask a simple question? Everyone here is advocating BTIR. But what age do they intend to stop buying term? Or is it that falling sick/dying past the age of 65/70 doesn't bother them?

My dad recently went for an angiogram, smelly smelly also $2k plus after all the subsidies. He's gonna go for a bypass and he is from the generation who did not believe in buying insurance as it was too expensive. Guess who's going to be footing the bill for him?

In our current generation, almost everyone is expected to have one of these critical illnesses. Unless you intend to buy term for life, someone will have to foot the bills for you. Either that or be prepared to see all your investment gains from your lifetime of BTIR go down the drain.

I make the choice of insuring my life, not only because i value my life, but I also do not want to be a burden to my children. And what's the point of saving and investing but in the end see it whittled down to nothing just because of a sickness that could strike any time?

 

[Shion]

I believe the BTIR idea is that, you buy term early and start your investments early, you should have a big sum of money by the time you are old. That is provided you are doing it correctly and your investments are healthy and earning.

So when you are old and need money, it will come from the investment earnings.

 

[Lewis.T]

There's the middle ground I prefer to take compared to term till 65 vs whole life, which is term coverage till age 100.

Personally I feel that if the investments don't go well, I have a solid term with high coverage to fall back on if I were to be sick. Eventually when I do die of old age, my beneficiaries get a modest payout from the policy. If you love them enough you'll stop having the thoughts of 'lets buy term till 65 and leave nothing behind if I'm gone after that. They should be financially independent from you from then on anyway.'

The premiums aren't too much different, especially when you start out young, and one policy is all you may ever need for your wealth protection.

 

[Bran.Cya]

I agree with what mrclubbie said. BTIR is for you to spend the minimum in covering yourself while you accumulate cash. When you are cash rich you don't need insurance anymore. A possible age to cover till would be retirement age, which is why people look at 65 or 70.

Can I ask a simple question? Everyone here is advocating BTIR. But what age do they intend to stop buying term? Or is it that falling sick/dying past the age of 65/70 doesn't bother them?

My dad recently went for an angiogram, smelly smelly also $2k plus after all the subsidies. He's gonna go for a bypass and he is from the generation who did not believe in buying insurance as it was too expensive. Guess who's going to be footing the bill for him?

In our current generation, almost everyone is expected to have one of these critical illnesses. Unless you intend to buy term for life, someone will have to foot the bills for you. Either that or be prepared to see all your investment gains from your lifetime of BTIR go down the drain.

I make the choice of insuring my life, not only because i value my life, but I also do not want to be a burden to my children. And what's the point of saving and investing but in the end see it whittled down to nothing just because of a sickness that could strike any time?

 

[Jwlng]

I agree with what mrclubbie said. BTIR is for you to spend the minimum in covering yourself while you accumulate cash. When you are cash rich you don't need insurance anymore. A possible age to cover till would be retirement age, which is why people look at 65 or 70.

What is the purpose of working your ass off and investing furiously when you're young and then when you retire, you know that this cash pile that you've accumulated will just be used for your own medical bills for the next 20 odd years? Sickness and death is a forgone conclusion, just that we do not know when it will strike. Great if it strikes us when we are still covered by term insurance. But why do we invest so much in instruments that will bring us wealth when the real investment we should be making is on ourselves?

 

[highsulphur]

It should be buy term AND medical insurance and invest the rest. You forgot about the medical part.

 

[Shion]

The cash pile can be seen as emergency funds or whatever, not necessary is for any possible CI or early CI events.

Why people compare BTIR and Whole Life is because of one factor -- returns. They projected that you will get more returns from BTIR.

I suppose your qn is why are people going for BTIR ?

 

[doody_]

Term can cover you until retirement. This way there is no loss of future income if something happens to you, as your dependents can collect the insurance payout. Once you stop working, no issues as you have earned all of your so called "lifetime earnings".

Medical insurance should carry on until death, to cover situations like what TS mentioned.

Nobody is stopping you from buying whole life or term until 99 if you want to leave a pot of gold behind for your dependents.

 

[Soul77]

That is why we have Medical Insurance (aka Shield Plans) and Medisave.

Older generations may not have enough Medisave, so yeah, the kids may have to bear it for them.

 

[Jwlng]

BTIR definitely provides for a better set of returns than whole life. But what puzzles me is that almost everyone has the conclusion that the cash pile at the end of the day is going to take care of the eventualities of sickness and death, but yet if factor the cost of treatment for CIs into the picture, you will definitely need to adjust your total investment returns. Medical insurance takes care of the hospital bills for sure, but there are limits and above a certain age, it becomes not viable to continue anymore, just like term insurance. It's just scary how the closest people around me are getting diagnosed with CIs and when it comes to the crunch, I will have to bear the brunt of the bills, whether i am able to or not.

I am in my late 30s, due to budget constraints, I also buy term insurance to provide the high coverage for my family in the event I fall sick or die. However I am very conscious that I will need to eventually mix in some whole life insurance so that I will not be a burden to my family when I cannot afford the cost of term insurance later in life.

 

[Perisher]

BTIR definitely provides for a better set of returns than whole life. But what puzzles me is that almost everyone has the conclusion that the cash pile at the end of the day is going to take care of the eventualities of sickness and death, but yet if factor the cost of treatment for CIs into the picture, you will definitely need to adjust your total investment returns. Medical insurance takes care of the hospital bills for sure, but there are limits and above a certain age, it becomes not viable to continue anymore, just like term insurance. It's just scary how the closest people around me are getting diagnosed with CIs and when it comes to the crunch, I will have to bear the brunt of the bills, whether i am able to or not.

I am in my late 30s, due to budget constraints, I also buy term insurance to provide the high coverage for my family in the event I fall sick or die. However I am very conscious that I will need to eventually mix in some whole life insurance so that I will not be a burden to my family when I cannot afford the cost of term insurance later in life.

The wholelife policy should be bought while young if you die die want to.
The sum assured would at most be comparable to BTIR's return.

 

[K|muRa^84]

Medical insurance and death/tpd/ci policies cover very different things

 

[Shion]

The idea is to ensure sufficient coverage in your 20s-50s when you are working and family dependent on you.

 

[Dividends Moderator]

Hi JwIng,

Based in your needs, it seems that accidental plan, H&S & Term are obligatory.

Your dad is so fortunate to have good dependents like you so Term may be offset by your goodwill.

In any case, maybe Term plans covering CI & TPD till 70 or (Pru) 99 yrs. hope it helps

Disclaimer: DYDD as I aren't a financial adviser or certified agent. Tia

Cheers,
D.M

 

[Shiny Things]

Can I ask a simple question? Everyone here is advocating BTIR. But what age do they intend to stop buying term? Or is it that falling sick/dying past the age of 65/70 doesn't bother them?

Basically, yeah. The point of life insurance is to cover your dependents' costs if you fall off the perch - and by the time you get to 65, you'd hope your kids are out of the house and no longer dependent on you. Life insurance beyond age 65 is sort of silly, because by that point you should have a nice big retirement pot, and you shouldn't have to smash a piggy bank to get at it.

You need to keep a Medisave or a shield plan around after age 65 to cover your hospital expenses, but you don't need life insurance specifically.

And besides, if you're buying-term-investing-the-rest, you're going to have a lot more cash in the bank to cover you if anything happens, because your cash isn't tied up in some wacky-ass crazy-expensive whole-life policy.

 

[af7680]

I am also holding quite no of life insurance polices including ILPs.
currently reviewing which one to trim off. surely ILPs will go first. and will buy term life instead to replace those.
Just curious, is there a general recommendation that how many percentage of income should be used for insurance at the max , just like TDSR when purchasing house and borrowing loan from bank.
TIA

 

[doody_]

I am also holding quite no of life insurance polices including ILPs.
currently reviewing which one to trim off. surely ILPs will go first. and will buy term life instead to replace those.
Just curious, is there a general recommendation that how many percentage of income should be used for insurance at the max , just like TDSR when purchasing house and borrowing loan from bank.
TIA

No rule on how much to spend on insurance. You buy what you think you need. I think nowadays 100k coverage is too low, minimum also 250k and up.

 

[Shion]

Some say not more than 20% of yr annual salary

 

[w1rbelw1nd]

Some say not more than 20% of yr annual salary

20% on insurance?? Woah agents really earn a lot hahaha.

 

[Shion]

20% on insurance?? Woah agents really earn a lot hahaha.

No idea ? Some say max 10% some say max 20% ?