12 Dec 2020
How necessary is it to have an insurance that covers for the entire life? Should i keep my ILP when i have term coverage till 70 years old?
Currently i have a term insurance that covers me up to 70 years old.
Coverage includes terminal illness, early stage crisis, critical illness under pruactive term.
At the same time, i have an ilp that i signed in 2016. Coverage about the same but with pruextra for pvt hospital.
Inital goal was to have the term cover abit more from now till 70. But i have been reading alot of not to buy ilp. I do my own investment.
Current payment of all my insurance is about 7% of my annual income.
If you have a financial risk that you need to transfer to an insurer, that's when you take on a policy.
So for death/TPD coverage, that will be a risk that will only be present if you have liabilities or dependents. That would be best covered by a term plan.
For CI coverage, you might want to have coverage for this for your whole life, if you do not wish to cause financial burden to your children or spouse in old age. In this case, a limited payment life plan will almost always be a better choice than say, a term till 99.
You don't have to get coverage via an ILP. Traditional plans work perfectly well (ie. your typical term and whole life plans).
There may be better options for you but you should speak with an advisor to get more inputs, etc.
You may want an insurance that cover you for life, for these 2 reasons:
you want to leave something behind, but don't want to use your retirement money for that purpose, because you don't know if it will be enough.
you want to have critical illness cover for life, which is usually a rider on a whole life policy.
Excluding hospitalisation insurance:
Not necessary for the entire life unless someone is dependent ...
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