Term vs Whole Life

[w1rbelw1nd]

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.

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.

Perhaps you can enlighten us what does the "many other considerations" entail?

 

[soneat]

Perhaps you can enlighten us what does the "many other considerations" entail?

Like I mentioned before, for people who thinks life insurance is unnecessary for children, so be it. Any form of insurances are also redundant until the point a person really needs them.

Example of additional expenses incurred: mum stopped worked (for a year), subsequently switched to a part-time job+get helper, tonic and supplements (such as yun zhi etc etc...), subsequent follow-ups (not covered by shield coverage).

 

[Darkzi0n]

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 means insurance on life. Any insurance that insure a person wellbeing is called life insurance. The confusion is probably bcos many ppl call whole-life insurance as life insurance and associate it with death coverage.

 

[w1rbelw1nd]

Like I mentioned before, for people who thinks life insurance is unnecessary for children, so be it. Any form of insurances are also redundant until the point a person really needs them.

Example of additional expenses incurred: mum stopped worked (for a year), subsequently switched to a part-time job+get helper, tonic and supplements (such as yun zhi etc etc...), subsequent follow-ups (not covered by shield coverage).

IMO, insurance is not redundant even if we dont use it.

Having insurance in place can allow us to be more adventurous, and thus seeking higher returns in our investment portfolio if we are confident that a big chunk of out of pocket expenses will be paid by insurance during unexpected events

I personally think that adequate H&S coverage is good enough if you have a big enough investment portfolio to pay for the "fringe benefits" (tonics supplements or whatever) since those medication and hospitalisation is the main cost and remedy to the illness. Other things are just good to have IMO.

 

[soneat]

A quick check at compare first suggest vivolife 350 for basic sum assured 100k (that means guaranteed 350k coverage till 70yo) 5 year premium payment term is 4188pa. Quite a compelling option for parents who feel that their children needs to be insured.

Yup H&S is necessary.

Btw there are people I know with Medishield Life and DPS only. They are willing to undertake the risks themselves and nope they have no big portfolio or warchest.

 

[w1rbelw1nd]

Btw there are people I know with Medishield Life and DPS only. They are willing to undertake the risks themselves and nope they have no big portfolio or warchest.

These are the people that are a biggest risk to themselves and the people around them... Hope they get enlightened about proper financial planning someday soon.

 

[01asdf]

Life insurance means insurance on life. Any insurance that insure a person wellbeing is called life insurance. The confusion is probably bcos many ppl call whole-life insurance as life insurance and associate it with death coverage.

The thread is on term vs whole life.

I don't think many people would define H&S and CI as "life insurance" either but YMMV.

 

[soneat]

H&S is not classified under life insurance.

Life insurance can be Term (predefined for a number of years) or Whole (whole lifetime). Currently, the life events that can be covered under life insurances are death, terminal illness, tpd, CI and Early CI.

 

[wts2013]

People here dun seem to understand the basics of insurance,so how to compare and make the right decision as to what/which insurance is good for them?

There are different types of insurance, each has its own purpose/benefits, pros and cons, to meet different needs/wants. If people are confused over what is Term, Wholelife, Endowment, ILP, etc or cannot even differentiate these 4 basic types and their purpose/benefits/features, how can they make the right decision?

The title of the thread, Term vs Whole Life, is another repeat thread of a thread which I created here

http://forums.hardwarezone.com.sg/money-mind-210/wholelife-vs-btir-5179681.html

Read that thread for real life case studies comparing wholelife vs BTIR and many more discussions on wholelife policies

 

[knightdreamer]

Thanks for all the input.

For Term do you all include Critical insurance?

 

[soneat]

Thanks for all the input.

For Term do you all include Critical insurance?

I have some CI cover. But mostly is for covering death and tpd.

 

[knightdreamer]

I have some CI cover. But mostly is for covering death and tpd.

i check the comparefirst. the different for Term + CI or without CI is alot like double.

as i have SAF group term it is make sense to get another term +CI or WL?

how much should we covered ourselves.

 

[soneat]

i check the comparefirst. the different for Term + CI or without CI is alot like double.

as i have SAF group term it is make sense to get another term +CI or WL?

how much should we covered ourselves.

Well you need to ascertain what events (death, tpd, ci or early ci) need to be covered for and how much. Sometimes it is better to have one big sum policy than many small ones due to large sum discount.

 

[soneat]

Well you need to ascertain what events (death, tpd, ci or early ci) need to be covered for and how much. Sometimes it is better to have one big sum policy than many small ones due to large sum discount.

For example, if you look at Compare First quotations, you will realise the premium per dollar sum assured for a 50k cover vs a 400k cover is very different.

 

[01asdf]

i check the comparefirst. the different for Term + CI or without CI is alot like double.

as i have SAF group term it is make sense to get another term +CI or WL?

how much should we covered ourselves.

It's not on comparefirst, but insurers do have CI only policies. As always, it's best to do your own research, or just request a quote in a separate thread, to see if term+rider or separate policies are better.

Personally, my CI is only 1 year's income since I figure major medical expenses are covered under H&S so it's mostly for incidentals/income replacement while I'm undergoing treatment.

Some may prefer higher coverage if they believe in aggressive alternative treatments or simply think they will incur more non-covered expenses.

 

[knightdreamer]

Well you need to ascertain what events (death, tpd, ci or early ci) need to be covered for and how much. Sometimes it is better to have one big sum policy than many small ones due to large sum discount.

i was think that also so many overlap. if Term and WL both cover CI

can we claim both plan if they are the same company??

 

[knightdreamer]

It's not on comparefirst, but insurers do have CI only policies. As always, it's best to do your own research, or just request a quote in a separate thread, to see if term+rider or separate policies are better.

Personally, my CI is only 1 year's income since I figure major medical expenses are covered under H&S so it's mostly for incidentals/income replacement while I'm undergoing treatment.

Some may prefer higher coverage if they believe in aggressive alternative treatments or simply think they will incur more non-covered expenses.

thanks didnt know there are standalone CI will look into it

 

[soneat]

That's why got to think carefully what events you wish to be covered and for how long. Yes as long as you are within the limits, you can claim from multiple plans issued from the same company.

 

[oceanicmanta]

I am comparing Term vs Whole Life plans to cover Death, TPD & Critical Illness.

From various illustrations & quotes received, I compiled the following :

A) Term (TPD, Death, CI) - Sum assured $150k for next 22 years. Nothing thereafter

annual premium = $1940 (GE term)
payment terms = 22 years
total premium = $42680

PV of Cost of Term Insurance = $38,500 (@1.5% discount rate) or $36,200 (@2%)

B) Whole Life (TPD, Death, CI) - $175k for next 22 years. Thereafter, 50k + non-guaranteed bonus

annual premium = $10615 (NTUC Vivo350)
payment terms = 5 years
total premium = $53,075

PV of Premium = $51,500 (@1.5% discount rate) or $51,000 (@2%)

Guaranteed Surrender Value at 22 years = $37,250
PV of Guaranteed Surrender Value at 22 years = $26,800 (@1.5%) or $24,100k (@2%)

PV of Cost of WL = $24,700 or $26,900 (ie PV of Premium less PV of Guaranteed Surrender Value)

From above, it seems the WL is clearly the better plan, in terms of both coverage & cost.

Or am I missing something ? Appreciate any comments.

 

[JuniorLion]

I am comparing Term vs Whole Life plans to cover Death, TPD & Critical Illness.

From various illustrations & quotes received, I compiled the following :

A) Term (TPD, Death, CI) - Sum assured $150k for next 22 years. Nothing thereafter

annual premium = $1940 (GE term)
payment terms = 22 years
total premium = $42680

PV of Cost of Term Insurance = $38,500 (@1.5% discount rate) or $36,200 (@2%)

B) Whole Life (TPD, Death, CI) - $175k for next 22 years. Thereafter, 50k + non-guaranteed bonus

annual premium = $10615 (NTUC Vivo350)
payment terms = 5 years
total premium = $53,075

PV of Premium = $51,500 (@1.5% discount rate) or $51,000 (@2%)

Guaranteed Surrender Value at 22 years = $37,250
PV of Guaranteed Surrender Value at 22 years = $26,800 (@1.5%) or $24,100k (@2%)

PV of Cost of WL = $24,700 or $26,900 (ie PV of Premium less PV of Guaranteed Surrender Value)

From above, it seems the WL is clearly the better plan, in terms of both coverage & cost.

Or am I missing something ? Appreciate any comments.

It's the cashflow thing. If you do Term right now, you could have some $ which you could invest for potentially higher returns.

That said, I believe Term and Whole Life both has its place in one's "insurance portfolio". I have both term and whole life plans.