Getting CI, TPD and term insurance under one plan?

Hi Ridhwan,

Congrats on your upcoming marriage! I wish you marital bliss.

Regarding your question, my take is this is more of what type of insurance you need at various stages. If you know what type of insurance you need, then you can decide if the type of plan suits you or not.

As a married husband, with liabilties and (future) dependents, then you are going to look at death/TPD coverage. The reason is simple. You may have an investment portfolio, but if someone takes over it when you are no longer around, what will they do with it? If they are savvy, that is good. But if they are not, they will likely liquidate it, and the question is, will the proceeds be enough to sustain them? Unless you have a high 6 or even 7 figure portfolio now, if not, the proceeds probably won't last too long.

This is especially important if something (touch wood!) happens to both parents early on and the child is left to fend for himself or herself. The next point to consider is: we can't decide when we leave this world, and what if the markets are down by, say, 40% when you pass away? Would that not have thrown things into a greater mess? The reason why insurance works is because it pays your family that amount of money they need, regardless of what is happening in the world at that point in time. If they need a million, death/TPD pays that million, regardless of what is happening. This peace of mind cannot be bought any other way. I hope this gives you some food for thought. The amount of coverage is typically 10 times annual income, but really should be dependent on your situation.

About critical illness, my take is that you should strive to cover at least 5 years of expenses plus have a sum of money for alternative treatment. Based on your age, a limited payment life plan may actually be a more cost effective solution as it covers you for life with total premiums very comparable to a term plan for similar coverage. A 200K (after x2 multiplier) early CI whole life plan will cost something like $2.6K for 25 years and you get coverage into retirement. That's probably not much more in total cost compared to a term plan covering the same amount for ECI. This money is for you. With the payout, you will be able to prevent liquidation of your portfolio (regardless of whether you are working or already retired) as the liquidity provided by the cash payout is meant to ensure that you have access to funds to take care of costs.

Hi Ridhwan!
I don't understand what you meant by "If I die, my dependents can have my investment portfolio, so I don't feel attracted to term insurance." Could you care to elaborate?
Personally I feel a CI cover for life is crucial, together with hospital medical (H&S) insurance.
So actually I wouldn't add on the ECI benefit to the term plan, but rather to a life plan. I am not sure if ECI benefit can fully accelerate the sum assured, as my plan has both ECI and CI benefits, so please check with your agent.
AXA's life plan (AXA Life Treasure) actually has a x7 multiplier so I would choose a small sum assured and leverage on the high multiplier for coverage till age 70. I think $50k sum assured with x7 multiplier, with CI benefit, and ECI benefit, pay over 25 years should still be affordable. That's $350k CI coverage / $175k ECI coverage. (LIA's recommended amount for CI cover is about $320k if I'm not wrong)
Then if you want to consider a term plan for death/TPD cover (because if you claim for CI, then there's no more death benefit for your dependent(s)), AXA Term Protector has a 20% discount till end of this month if I'm not wrong but a TPD rider has to be added on. $300k sum assured for death/TPD till age 65/70 should be affordable and can be used to exempt from HPS if your bto is nt too expensive. Otherwise you could consider $500k sum assured (for now it's cheaper than $400k) or even $1M.