facebookI have 2 kids, sole bread winner and we plan to buy a place. I want life insurance just in case to protect my family. Life cover I roughly know but I struggle with TPD and CI values. Any advice? - Seedly

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Y

Y

Level 4

04 Apr 2020

Insurance

I have 2 kids, sole bread winner and we plan to buy a place. I want life insurance just in case to protect my family. Life cover I roughly know but I struggle with TPD and CI values. Any advice?

Would be great to get some guidance in how to determine the right values. Any advise welcome.

Discussion (9)

What are your thoughts?

Elijah Lee

Elijah Lee

31 Mar 2020

Level 18·Independent Financial Advisor at Phillip Securities (Jurong East)

Hi Y,

Life and TPD values will be largely the same, rationale is that if you are suffering from TPD, it is very unlikely that you can work. Hence all sources of income would be gone.

The rule of thumb based on income has been mentioned, but I will also urge you to consider the following numbers (for death/TPD)

  • Sufficient money for your surviving spouse for the rest of her life

  • Money to raise the kids till working age

  • Liabilities to be paid

You'll want to calculate the figures for that carefully and also know the duration you need to be covered.

For CI, at a minimum you will need to have enough payout to cover for your family expenses (including your loan repayments for the house) and your own living expenses for around 5 years, plus a sum of money for out of pocket costs such as medication/treatment not covered by a shield plan, second opinion from another doctor, alternative treatment, hiring a helper etc.

Zachary Zou Lida

Zachary Zou Lida

03 Apr 2020

Level 4·Financial Consultant at Professional Investment Advisory Service

Hi,

For your death coverage, the amount should definitely be sufficient to cover for the mortgage loan as well as your children's expenses until they reached an independent age.

As for your critical illness, the coverage amount will depend on whether or not you have an integrated shield plan which will cover most hospitalization expenses. The same goes for TPD.

But in order to come up with a comprehensive solution for you, I'll definitely need more information from you so that I can forecast your cash flow to ensure that whatever is being presented to you will not hurt your lifestyle which I think is very important for your children in their teenage years.

-removed by admin-

10 times annual income for death and disability

5 times annual income for critical illness

That's ...

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