Term vs Whole Life

[agenda]

Recently I was quoted that for my profile, a term life coverage of 35k for death and 30k for CI with a x3 multiplier would cost me $109 a month for 25 years with some kind of payout after maturity.

I did some research and found that I can get slightly more coverage with Term insurance for only $30+ a month.

Apart from the fact that WL will cover me until I die while Term covers me until I'm 65? What are the other benefits of buying WL? I am also doing investments on my own so I got that one down.

 

[01asdf]

What you were quoted is not term life but an ilp with 'bonus protection'. I'd look for another agent or just go compare first.SG rather than deal with someone who would misrepresent their products like this.

Imo, WL is basically to leave a legacy to your descendants while term life is more about making sure they get a breather if you die during your working years costing them their income source.

 

[havetheveryfun]

WL can also be treated as a partial savings plan because when you surrender after 20-30 years, you can get back majority of the money you have put in. While term the money is gone forever every month you pay

 

[blurpandasg2014]

WL can also be treated as a partial savings plan because when you surrender after 20-30 years, you can get back majority of the money you have put in. While term the money is gone forever Besides very month you pay

If u factor in inflation,the returns are not huge. Best is mixture of both if u can afford. Otherwise jus use term to cover the important yrs of life

 

[Shion]

I never hear before term insurance will have payout

 

[havetheveryfun]

I never hear before term insurance will have payout

he said term life, so its probably a whole life policy ?

 

[Darkzi0n]

more likely to be endowment.

 

[knightdreamer]

http://www.prudential.com.sg/corp/prudential_en_sg/solutions/protect/PRUlife_multiplier.html

https://www.greateasternlife.com/sg...ily/life-protection/flexilife-multiplier.html

i think TS is talking about this

btw with or without multiplier is whole life better than Term?? since you just pay for the first 20 or 25 years the rest of the life are cover? and you get some pay back??

 

[knightdreamer]

anyone can share?? i understand that here is encourage Term but for whole life isnt is better that you pay for 20 years the rest of the years are covered?? some more you get some returns

whole life or Term?

 

[soneat]

First of all, you need to decide the term of coverage. Is it going to cover to 65 years old (the popular choice in this forum) or whole life/100 years old.

Now to achieve either coverage, you can buy term or whole life insurance. In limited premium whole life insurance, you are actually paying a lot more $ than necessary. As an example, in limited premium insurance, you pay $4000 over 10 years for Sum Assured of $100k which could rise up to 200k in 40 year's time. Should death occurs in 40 year's time, 200k is the payout. Now if you buy term (to 99) and invest the rest (eg reit with 8% yield), the same 40k can earn 3200 of dividend which can fund the premium of a 200k 99year term insurance (probably 1200 a year).

 

[soneat]

Limited premium whole life policy with multiplier is rather popular/useful for young children

 

[w1rbelw1nd]

Limited premium whole life policy with multiplier is rather popular/useful for young children

Popular yes, useful, I would say no. Why would you want to insure a child when the child has no dependent? Just in case he has some illness and can't be insurable in the future?

I would want to insure all my descendants 10 generations down then....

Sent from OnePlus A0001 using GAGT

 

[soneat]

Popular yes, useful, I would say no. Why would you want to insure a child when the child has no dependent? Just in case he has some illness and can't be insurable in the future?

I would want to insure all my descendants 10 generations down then....

Sent from OnePlus A0001 using GAGT

Different people have different idea of how insurance can be useful to them. While it is possible to insure a juvenile for up to around 500k,it is not possible to insure '10 generations down the road'.

Life is uncertain and while some may argue children have no economic value and hence no insurable interest, should the unfortunate event occurs, it will provide financial relief for the parents.

 

[soneat]

The other way is to look at the total premium payable from say 25 yo to 65yo term vs a whole life (vivolife 350) and see the total premium payable. One can factor in time value of money etc if desired.

For people 40 and above, generally it is not a very good idea to get whole life as the potential accumulation period is lesser and most BI will show it takes about 40 years to double the sum assured.

 

[w1rbelw1nd]

Different people have different idea of how insurance can be useful to them. While it is possible to insure a juvenile for up to around 500k,it is not possible to insure '10 generations down the road'.

Life is uncertain and while some may argue children have no economic value and hence no insurable interest, should the unfortunate event occurs, it will provide financial relief for the parents.

The whole premise of insurance is to insure the individual/family from any financial risk in the case that something adverse happening (be it loss of ability to work, death/tpd, hospitalisation). A juvenile dying has no huge financial implication, as you have pointed out. So what financial relief are you talking about? From another angle it would seem like the parent will be making a morbid bet for his/her child to die...

 

[soneat]

The whole premise of insurance is to insure the individual/family from any financial risk in the case that something adverse happening (be it loss of ability to work, death/tpd, hospitalisation). A juvenile dying has no huge financial implication, as you have pointed out. So what financial relief are you talking about? From another angle it would seem like the parent will be making a morbid bet for his/her child to die...

Insurance claims can be for CI, not just for death. So in the event a child is sick/severely sick, it is ok to let the child get weaker by the day and let him/her die? If not, if the parents want to do something, wouldn't it affect their financials?

 

[01asdf]

Insurance claims can be for CI, not just for death. So in the event a child is sick/severely sick, it is ok to let the child get weaker by the day and let him/her die? If not, if the parents want to do something, wouldn't it affect their financials?

What does CI have to do with life insurance? If the parents are really worried about their children getting sick they should be buying H&S instead of, what, trying to recoup the cost when the child dies?

 

[soneat]

What does CI have to do with life insurance? If the parents are really worried about their children getting sick they should be buying H&S instead of, what, trying to recoup the cost when the child dies?

Life insurance does not simply mean death coverage. Life insurance can be insured for events such as death, tpd, CI, early CI etc.

H&S is a must.

As an example, if a child gets cancer, yes the surgery, chemotherapy (typically S$2K per dose every 3 week), some post hospitalisation treatment etc are covered by H&S. However, there are many other considerations not covered by H&S.

For people who thinks life insurance is unnecessary for children, so be it.

There are many people (adult) who also think life insurance is unnecessary as well.

 

[soneat]

Life insurance does not simply mean death coverage. Life insurance can be insured for events such as death, tpd, CI, early CI etc.

H&S is a must.

As an example, if a child gets cancer, yes the surgery, chemotherapy (typically S$2K per dose every 3 week), some post hospitalisation treatment etc are covered by H&S. However, there are many other considerations not covered by H&S.

For people who thinks life insurance is unnecessary for children, so be it.

There are many people (adult) who also think life insurance is unnecessary as well.

I have a friend who was unfortunate to end up in a such a scenario. However, as she only had H&S (Basic medishield only!) for the child, the family incurred substantial expenses.

 

[soneat]

Anyone checked out aviva's myprotector-moneyback?

Term-life policy and can get back the premiums.. sounds too good to be true.

Wanna know what's the catch behind it


http://www.aviva.com.sg/life-and-health/for-individuals/term-life.html#myprotector

Saw the BI before, basically the premium payable is much much higher than what you would have to pay for an equivalent term plan. Personally, this plan is not enticing to me and I do feel that it would really be better to BITR than to buy this.