Decision making on buying term insurance til 65 or 75? Amt for TPD/Death up to 600k or 1mil? And whether to terminate ILP bought 10 years ago?

Hi Ming Shu,

In regards to whether to buy 600k or 1mil, I think it would be better if you could see the comparison in cost as due to 'banding' of coverage, sometimes 1mil coverage might be of better value as compared to 600k.

I think why 65 is chosen as a 'magic number' is because due to retirement age, as most of us might choose to already stop working at that age, thus we are no longer making an income by then, which I believe most have mentioned that TPD is mainly in the event we are still alive, however are unable to make an income. So if you do think that you will work beyond 65, I do think you can extend till then, however I do believe that with the longer term, premiums will increase accordingly as well.

I think for the ILP, it depends on whether it has substanial cash value and based on your age band's mortality charges, how long will it sustain on it's own? Cause the ILP is life policy actually, so you do have a life time coverage there as well. Or you could leave it as a investment product and take the earnings for your own use and other investments in future

According to Life Insurance Association, Total & Permanent Disability coverage is used to provide for income loss. With retirement age set at 65, most insurance companies will offer coverage till then. As the society move towards a later retirement age, some insurance companies like AIA Singapore extend the coverage to age 70 accordingly.

In order to give you the best advice, one of the most important things to do is to have a complete understanding of your existing insurance portfolio. Through this process, it allows us to understand the coverage that we have, any financial gap, as well as to find out whether we are overpaying for our insurance policies. I have highlighted the rest of the reasons here: https://www.blog.pzl.sg/why-every-client-needs-...

In most cases, I will sit down with my clients and conduct a comprehensive financial planning to understand further on their needs and goals for the future. At the end of the day, insurance is merely one of the tools available in the market to help you mitigate the risks that you are not willing or unable to undertake on your own.

Moreover, it allows us to evaluate whether you need 600k or 1 million coverage. In general, the rule is to have 10 times annual income for your basic life insurance coverage. However, individual circumstance may vary, e.g. young children, elderly parents, loans. Therefore, we will need to alter and plan accordingly.

Through comprehensive financial planning, it will help us to evaluate the situation and to be confident on the choice between coverage till age 65 or 75 as well as whether to have 600k or 1mil coverage.

For Critical Illness, the most important fundamental will be to have your private integrated shield plan. Here is why: https://www.blog.pzl.sg/is-integrated-shield-pl...

Having done a number of major claims in my career, healthcare insurance is crucial in helping to cover the medical bills associated with the medical condition. Furthermore, it will be valued to consider the rider add-on as well. Here is why: https://www.blog.pzl.sg/should-i-buy-rider-for-...

Now, for the general rule to Critical Illness coverage, it will be 5 times your annual income. Similar to your basic life insurance coverage, the actual amount that you require will vary, e.g. family history.

With regards to your investment-linked policy, we will use the comprehensive insurance portfolio summary to have a clearer understanding on the policy and how it fits into your planning for your future. Thereafter, we will be able to evaluate the best way to utilise it to your needs.

All in all, different advisors may plan differently due to a variety of reasons, e.g. knowledge, skills, and experience. In any case, the most important thing to know is to have a clear understanding about yourself and what you need.

If you are unsure, then you should speak with an experienced advisor who is able to listen and understand you before sharing with you on what you need rather than what you may need.

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