Insurance - life or term plan?

[WoShiPro]

Looking to get either life or term plan. Quite confuse as to which is more impt..

From what I know.

Term plan insured amount is higher but only cover till a certain age. life plan cover all the way till death with a lower coverage amount..

What should be the recommended coverage amount?

My annual income is $37k. Was quote $300/month for a life plan. 120k ECI 360k death/CI/TD till aged of 70 which will then revert back to 90k. Is this plan gd enough?

 

[Maeda_Toshiie]

Looking to get either life or term plan. Quite confuse as to which is more impt..

From what I know.

Term plan insured amount is higher but only cover till a certain age. life plan cover all the way till death with a lower coverage amount..

What should be the recommended coverage amount?

My annual income is $37k. Was quote $300/month for a life plan. 120k ECI 360k death/CI/TD till aged of 70 which will then revert back to 90k. Is this plan gd enough?

Before signing anything, ask yourself:
What is the goal of your protection?
Who are your beneficiaries?

 

[tangent314]

Think about it, what are the protection that you really need?

When you are young, you don't really care too much about dying until you have children. That's when you want to up your coverage so that if anything happens to you, your child will be taken care of.

Disability Insurance is also important, because not only are your working options more limited, but you require more care, and at a younger age you don't have the savings to see you through the rest of your life.

At an older age, however, your children will have started working, and won't depend on your money anymore. At the same time, you should start having enough savings already to tide you through the rest of your life even if you are no longer able to work, these savings will also be passed on to your children if you pass earlier than expected.

So now the obvious question is, why do you need need whole life insurance? At the age of 65, you likely won't need insurance anymore. That's why in this forum, BTIR is always highly recommended.

 

[BBCWatcher]

I agree with tangent314. Simple term life insurance is generally the best choice, and only if and when you have dependents.

"Dependents" include anybody you significantly care about who would genuinely need financial support in the event of your premature demise. Dependents are not those who would be only sad (but not genuinely financially needful) if you were to die too early.

Dependents' financial needs should be calculated after you take into account your assets and "free" life insurance. To pick an extreme example, Bill Gates does not need life insurance. He has no trouble protecting his dependents using his own personal wealth, and most (or all) of his dependents are already wealthy and self-sufficient.

"Free" life insurance includes, as examples, life insurance that your employer might provide and the little bit of life insurance you get if you become a NTUC member.

 

[WoShiPro]

Annual income $37,000
Take home $29,600
Annual premium for Life insurance $3,600

You're paying 12% of your take home pay for Life insurance.

That 12% is excluding the most important insurance - Hospital plan

Thanks all for the reply.

I already have private prushield premium health insurance.



My primary concern is to provide a source of income in the event I kana something and unable to work.. hospitalization fees are cover by my health insurance so that not a problem but i will not have income if i'm unable to work and my savings will empty one day..

 

[Lewis.T]

Thanks all for the reply.

I already have private prushield premium health insurance.



My primary concern is to provide a source of income in the event I kana something and unable to work.. hospitalization fees are cover by my health insurance so that not a problem but i will not have income if i'm unable to work and my savings will empty one day..

Disability insurance that covers you when you are unable to work would be more appropriate in this case. Not all insurers carry this product though, and make sure the terms and conditions are favourable when purchasing such insurance.

Example
Unable to work in current occupation versus unable to work in any occupation.

 

[BBCWatcher]

This article does a pretty good job explaining disability income insurance and the available products from insurance carriers in Singapore.

Yes, the T&Cs are very important. Read the policy carefully, and without an agent hovering over you. (Take it home first, then read it, probably a couple times.) Here are a couple more important considerations:

* Whether the policy continues to provide coverage if you work outside Singapore;

* The elimination period, i.e. the waiting period before receiving benefits if you're disabled and quality. (Hint: You'll almost always want to pick the longest elimination period, within reason. You're trying to insure, not to win the lottery. Your emergency reserve funds should be used for self-insurance during the waiting period.)

 

[bella89]

Looking to get either life or term plan. Quite confuse as to which is more impt..

From what I know.

Term plan insured amount is higher but only cover till a certain age. life plan cover all the way till death with a lower coverage amount..

What should be the recommended coverage amount?

My annual income is $37k. Was quote $300/month for a life plan. 120k ECI 360k death/CI/TD till aged of 70 which will then revert back to 90k. Is this plan gd enough?

How much coverage you should get would usually be 20x of your annual salary, which in your case, would be $750K death+TPD, i would say 150-250K ECI.

You'll have to ask yourself the main objective for the coverage.
Term is usually for targeted coverage. For example, if you buy 2nd property for investment, you'll want to get a term to cover the loan amount, say 1m. 5 years later when you sell the property, you can terminate the term plan too.

It's also for those who really have no means to afford a whole life policy premium at the moment.

Otherwise, I would suggest a whole life plan because it's definitely cheaper than term in the long run simply because it has cash value. Say you are 30 years old now and surrender the whole life policy at 62, you would have only paid a balance of around $1600 upon the surrender of the policy (Total premiums paid - Surrender value). Meaning, every year, you've only paid $50/year for that coverage. You even start making money (not the main point) from your whole life policy if you leave it be. Meanwhile, you're still covered.

 

[BBCWatcher]

I disagree with Bella89 -- this is bad advice. Moreover, it appears to be somebody trying to sell something:

....then you should look specifically into CI plans and/or investments that gives you monthly passive income (pm-ed you).

Not cool.

 

[Wishdom]

How much coverage you should get would usually be 20x of your annual salary, which in your case, would be $750K death+TPD, i would say 150-250K ECI.

You'll have to ask yourself the main objective for the coverage.
Term is usually for targeted coverage. For example, if you buy 2nd property for investment, you'll want to get a term to cover the loan amount, say 1m. 5 years later when you sell the property, you can terminate the term plan too.

It's also for those who really have no means to afford a whole life policy premium at the moment.

Otherwise, I would suggest a whole life plan because it's definitely cheaper than term in the long run simply because it has cash value. Say you are 30 years old now and surrender the whole life policy at 62, you would have only paid a balance of around $1600 upon the surrender of the policy (Total premiums paid - Surrender value). Meaning, every year, you've only paid $50/year for that coverage. You even start making money (not the main point) from your whole life policy if you leave it be. Meanwhile, you're still covered.

ECIs are generally expensive and not essential.

There are term plans that cover you until 99 years old. It is not as narrow as '' only for targeted coverage ''

Cash value does not make whole life *cheaper* than term. Rather, the cash value is a form of investment you are buying from the insurer. This cash outlay will definitely be higher than a term one.

Bella is an obvious insurance agent sprouting her cliche insurance lines.

Sent from Ilovennp using GAGT

 

[Biogentic]

Anyone can recommend me any term or life insurance product?

 

[BBCWatcher]

Rather, the cash value is a form of investment you are buying from the insurer.

Yes, and it'll reliably be a bad (poor value) investment for you.

Anyone can recommend me any term or life insurance product?

Yes.

1. You most probably should NOT purchase a whole life insurance product.

2. For simple term life insurance, generally a term to age 65 is a good fit. You can purchase term life insurance as "Direct Purchase Insurance" (DPI) in Singapore. Details are available at MoneySense here. Just comparison shop among the "DIRECT" simple term life insurance products from the several companies that offer it, all from the comfort of your armchair.

Please note that the CPF Dependents' Protection Scheme (DPS) is simple term life insurance, to age 60. Also, if you are a NTUC member, you have some term life insurance. You should take these coverages, and your assets, into account when determining how much term life insurance to buy. You should also check whether it makes sense to keep DPS coverage (if you have it) or whether you should just consolidate everything into one simple term life insurance policy (and cancel DPS). That'll depend on how much of a value-for-money the DPS coverage is for you.

 

[Biogentic]

If I have Aviva group term life, personal accident, living care and living care plus still need to buy this term life insurance?

 

[wealth_farmer]

I’d emphasise again when you’re thinking about this, please try not to think about how to “make money from your insurance policy”.

Insurance is for protection against low-probability, high-impact events. This mean that you really really hope that you don’t EVER have to claim from your insurance. Therefore only spend the absolute minimum necessary to get realistic coverage amounts. Life doesn’t always play out to be super scary, so don’t let insurance agents scare you into all their dystopian “what-if” scenarios. It’s like your manufactured nightmares are their wet dreams, really it’s quite perverse when some of the unethical agents try and prey on your insecurities.

The moment you try to be greedy, and think about how you can be “smart” to huat from insurance policies, people like bella89 will crawl out from the woodwork and start to prey on your greed to hit their comms target.

Insurance policy is meant to protect you, not to make you rich.

 

[mSnooze]

Looking to get either life or term plan. Quite confuse as to which is more impt..

From what I know.

Term plan insured amount is higher but only cover till a certain age. life plan cover all the way till death with a lower coverage amount..

What should be the recommended coverage amount?

My annual income is $37k. Was quote $300/month for a life plan. 120k ECI 360k death/CI/TD till aged of 70 which will then revert back to 90k. Is this plan gd enough?

Personally if you want to get whole life, imo you should get it when you young, e.g. newborns or till early 20s, which are still somewhat consider cheap.

If not Term will be the optimal option in term of cost, outlay/year and time value of money.
When you add ECI to WL, it becomes really costly.
If you want to something to cover for whole life, and at the same time get CI coverage, what you can do is perhaps get a term with death/tpd/waiver to 99, and a separate standalone CI.
Then again, do you really need a term till 99 for legacy? You can get a Term till liability/dependents are done and save/invest the excess not spend on insurance to give to your dependent for legacy, in the form of assets/cash, etc.
If your concern is continuity of income in unfortunate events, you can consider DI like others said, and have some form of CI, if adversity is due to CI. To have Early CI or not, that depends, need to know more about you to recommend.

I do not agree with Bella89, one shirt fits all concept in planning for coverage.

Anyone can recommend me any term or life insurance product?

If I am not wrong, GTL cannot be use as replacement for HPS. You have GTL which is good to have, but do aware that policy terms and conditions are subjected to changes by the company discretion. I will recommend to get a private term for stability, and use the GTL as a supplement coverage instead.

 

[xtwis7]

Critical Illness, Hospitalisation, Disability Income and Personal Accident Coverage for a more comprehensive protection.

Ask yourself why you buy the term for CI then ask yourself what is most important during that time when you have no income.

Hospital plan would cover the common methods of treatment unless you’re going for non-standard drugs which cost a bomb.

 

[Maeda_Toshiie]

Anyone can recommend me any term or life insurance product?

If I have Aviva group term life, personal accident, living care and living care plus still need to buy this term life insurance?

Before you sign on whatever plans agents throw in your direction, you should be asking what you need to cover. Insurance isn't playing Pokemon where you gotta to get them all. You should be looking at your current coverage and buy what you need to cover any shortfall.


And stop letting agents emotional blackmail you into buying what you don't need.

 

[BBCWatcher]

Critical Illness, Hospitalisation, Disability Income and Personal Accident Coverage for a more comprehensive protection.

That's pretty ridiculous.

There's a "big three" for essential insurance needs, and then there are insurance luxuries. Here are the essential insurance needs:

1A. Medical insurance. If you're OK staying in public hospital B2 or C wards, then (in the government's view anyway) MediShield Life plus a "reasonable" Medisave balance are sufficient. I happen to disagree with the government on this one and view an "as charged" public hospital B1 ward (or possibly B2+ ward) Integrated Shield base plan to be essential. You might stretch that argument to public hospital A ward, especially for working people who are trying to heal quickly and get back to work and also possibly for Permanent Residents and foreigners who don't enjoy the medical subsidies that citizens do. Anything above that is an insurance luxury. There's nothing necessarily wrong with luxuries per se, but make sure you're covering insurance essentials first. "Zero dollar" Integrated Shield riders are ridiculous in Medisave-equipped Singapore -- so ridiculous the government saw fit to stop them -- so I certainly wouldn't deem Integrated Shield riders as essential with the exception of the Assist Rider available for NTUC's Enhanced IncomeShield C plan, the only Integrated Shield plan designed for public hospital B2+ ward and below. If you're considering an Integrated Shield rider otherwise, and if an "Assist" or "Saver" rider is offered, that's the one you should consider (but not necessarily buy).

1B. Travel medical insurance. If you travel outside Singapore, emergency medical insurance coverage with medical repatriation coverage is quite important, especially in high medical cost countries such as the United States. I quite like Bupa's basic annual plan, sold online. The best price is in British pounds and with a coupon code that you can find easily online. It's quite affordable for those who make a couple trips (or more) per year outside Singapore, and there are no limits for covered services.

2. Disability income insurance. The most valuable asset most young (and older) adults have is their earning potential. Insure that, please. Great Eastern, AIA, and Aviva offer DII in Singapore, and there are a couple possible options from outside Singapore that occasionally work better. ElderShield (upgraded to 2 out of 6 ADLs), or maybe the future CareShield Life (also upgraded to 2 out of 6 ADLs or better) are possible alternatives, although genuine DII is best. This article explains DII fairly well.

3. If and only if you have dependents who would suffer significant financial hardship (not only be sad) if you were to die prematurely, simple term life insurance.

....And that's the "big three." Past that, you're most probably dealing with insurance luxuries.

As always, read the fine print very carefully.

 

[Biogentic]

Personally if you want to get whole life, imo you should get it when you young, e.g. newborns or till early 20s, which are still somewhat consider cheap.

If not Term will be the optimal option in term of cost, outlay/year and time value of money.
When you add ECI to WL, it becomes really costly.
If you want to something to cover for whole life, and at the same time get CI coverage, what you can do is perhaps get a term with death/tpd/waiver to 99, and a separate standalone CI.
Then again, do you really need a term till 99 for legacy? You can get a Term till liability/dependents are done and save/invest the excess not spend on insurance to give to your dependent for legacy, in the form of assets/cash, etc.
If your concern is continuity of income in unfortunate events, you can consider DI like others said, and have some form of CI, if adversity is due to CI. To have Early CI or not, that depends, need to know more about you to recommend.

I do not agree with Bella89, one shirt fits all concept in planning for coverage.


If I am not wrong, GTL cannot be use as replacement for HPS. You have GTL which is good to have, but do aware that policy terms and conditions are subjected to changes by the company discretion. I will recommend to get a private term for stability, and use the GTL as a supplement coverage instead.

Thanks for the information. BTW What is HPS?

I figured out I would need to get another term till age 65 directly from the website you recommend earlier on since there is no agent involved and is cheaper. (Any recommended one out of so many insurance companies?)
Look like I am also lacking in term of ECI as the AVIVA living care/ living care plus can’t absolutely cover me fully. Any ECI plan that you recommend me to look into it?
Similarly I would also want to get the Disability income insurance too.
Btw just off topic is AIA insurance generally more expensive?

 

[Biogentic]

wonder should i go for AVIVA ideal income or AIA premier disability cover? if comparing on the same basis (coverage till 65yrs old, pre benefit 2 months), are the premium and term of disability approximately the same for both providers?