Got TM WL plan with min sum assured 30K (ECI). Bought 10 years ago. My FA now told me to get 100k 2x multiplier till 70. I feel uncomfortable with the $3000/yr premium as I’m in my 30s.

Still need to pay for hospitalization, accident, careshield life and the TM life plan every year. Planning to buy flat in the next 2 years. I feel like I'm overpaying for insurance overall. Should I just top-up with a whole life plan with a lower min sum assured so that I don't need to pay so much? The plan he recommended is aviva my whole life plan iv

Hi Mei Yun,

By itself, Aviva's (actually Singlife) MyWholeLife Plan IV is a decent plan but of course we have to take into consideration your entire situation.

Generally the amount of CI coverage you will need should ensure that you will be able to continue meeting your expenses for 5 years, with money to pay for treatments that falls outside of your shield plan. A good guideline is whether your premiums are 10% of your income. If they are, then you might be overpaying for insurance. But you can only know for sure if an advisor works out the numbers for you.

I note the comments in other answers that your FA said that 20% of your pay should be allocated to insurance, and I strongly disagree with that. Unless you have a pre existing condition that leads to loading, all of your coverage should be able to fit within 10% of your income, regardless of whether you use term or life to meet your CI needs.

To address another of your comments below, CI on a term plan can act as income/expense replacement during your working years, but your TM WL will be your last safety net if something happens in your retirement. The question is whether 1) you believe in CI cover in retirement and 2) if you do, does your TM WL provide sufficent cover?

My suggestion is that if there really is a need to increase your coverage and somehow a WL plan can't fit in your budget, you can go for a term/multipay. If adding a $3K WL will mean that you pay, say 11% of your income in premiums, that's actually ok if you factor in income growth. I note that you are in your 30s, and there's a good chance your income will still grow, as your insurance premiums are pretty much level (though not guaranteed) which means that you can still cope.

Personally, when I started work, my insurance premium was about 12% of my income after I got my WL CI plan. 12 years later, I feel that the plan I got in 2010 is far too little (I'm 38) and have increased my coverage with another plan, and my total insurance premiums are below 10% of my income.

As a last resort, you might want to spread the premiums over a longer premium term to manage them, if you decide to go with the WL.

Good luck and I hope you find a solution!