Hi anon,
Generally I would advocate not going with the ILP for your coverage needs. So I won't be talking about that. Although it is interesting that your term premium is higher than the ILP (I assume you have been pitched something already...)
Now, on the topic of term vs whole life, this depends on what you're covering. For pure death/TPD, term is the most cost effective solution since death/TPD coverage is not usually needed for life. At some point, your dependents grow up, and liabilities are paid off.
However, for CI coverage (which sounds like what you are looking for), and especially early CI, you should look at the numbers first. BTIR is not always the go-to answer for everything. The concept of a whole life with multiplier is really just a term plan stacked on top of a whole life, with the advantage of lifetime coverage for at least a certain basic amount. This will be the go-to answer if you require whole of life CI coverage since a term to 70 and beyond, will likely be more expensive than WL in terms of total premiums. Although I don't know your age so it will be hard to comment but you sound young to me.
BTIR does not hold up if you fail to invest the difference, and time and again I have seen too many cases of people who fail to do so. On top of that, you have to get returns of probably around 6% from now till age 70 (in the case of early CI) and this assumes that you invest successfully; if you don't, you'd be better off with a WL. After 70, are you going to continue to manage your investments? Because that's not how I envision my retirement to be. With a WL, the insurer will continue to manage the cash value of your policy, taking the burden off you.
But of course, if you don't care what happens after 70, just get a term. You'll be happier that way.
Get a comparison across multiple insurers first (which you can get from an independent financial advisor) and do your maths first. Insurance is a long term commitment and you don't want to be getting a term only to realise 3-4 years later that you actually prefer a whole life.
Hi anon,
Generally I would advocate not going with the ILP for your coverage needs. So I won't be talking about that. Although it is interesting that your term premium is higher than the ILP (I assume you have been pitched something already...)
Now, on the topic of term vs whole life, this depends on what you're covering. For pure death/TPD, term is the most cost effective solution since death/TPD coverage is not usually needed for life. At some point, your dependents grow up, and liabilities are paid off.
However, for CI coverage (which sounds like what you are looking for), and especially early CI, you should look at the numbers first. BTIR is not always the go-to answer for everything. The concept of a whole life with multiplier is really just a term plan stacked on top of a whole life, with the advantage of lifetime coverage for at least a certain basic amount. This will be the go-to answer if you require whole of life CI coverage since a term to 70 and beyond, will likely be more expensive than WL in terms of total premiums. Although I don't know your age so it will be hard to comment but you sound young to me.
BTIR does not hold up if you fail to invest the difference, and time and again I have seen too many cases of people who fail to do so. On top of that, you have to get returns of probably around 6% from now till age 70 (in the case of early CI) and this assumes that you invest successfully; if you don't, you'd be better off with a WL. After 70, are you going to continue to manage your investments? Because that's not how I envision my retirement to be. With a WL, the insurer will continue to manage the cash value of your policy, taking the burden off you.
But of course, if you don't care what happens after 70, just get a term. You'll be happier that way.
Get a comparison across multiple insurers first (which you can get from an independent financial advisor) and do your maths first. Insurance is a long term commitment and you don't want to be getting a term only to realise 3-4 years later that you actually prefer a whole life.