29 Jul 2020
I have just turned 23 and am considering all of my options. I feel like Term Life Insurance would be good for me at the moment since it is cheaper.
Term life insurance is an insurance product that insures you for a period of time or until a certain age. It provides coverage against death and there will be a payout in the event of the policyholder’s death/total and permanent disability/terminal illness diagnoses.
Whole life insurance is a life insurance product that is guaranteed to remain in force for the policyholder’s lifetime provided that the full premiums are paid or until the maturity date of the policy. There will often also be a surrender value or cash value of the plan after it has been held for a specified period of time.
The main difference will be the time period of the policy, the premium as well as the cash value.
Each plan has its own pros and cons. It will be good for us to understand more about your personal financial situation before providing you with advice.
Do get in touch with us if you are interested to find out more.
You have to also consider that Whole Life Insurance comes with cash value so it’s more expensive. It’s more cost effective with Whole Life in the long run, though you will feel the pinch of paying more for premiums every month. More than just considering the cost, you have to see if the plan is enough for your coverage.
A reasonable coverage for life insurance is:
10x annual income in the event of death
5x annual income in the event of CI
Your needs will change over time so you can buy a term plan to fill up those gaps.
Whole Life insurance has its place. For example, a limited WL policy, which you pay for X years, the...
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