facebookI'm 23/F, under the SGUnited Traineeship, drawing $2.5k a month. I am thinking of either getting a Term Life + CI Rider or a Whole Life plan before the CI definition changes. Any suggestions? - Seedly

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Anonymous

14 Aug 2020

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Insurance

I'm 23/F, under the SGUnited Traineeship, drawing $2.5k a month. I am thinking of either getting a Term Life + CI Rider or a Whole Life plan before the CI definition changes. Any suggestions?

I'm a non-smoker, don't plan to have kids, and I think living till 80 would be more than sufficient. My GE agent is suggesting either the Supreme Early Multiplier (4x - 70) or Great Term (40 years) + Living Care Rider + TPD benefit. It would be optimal to get Whole Life for my policy to be based under the old CI definition, but I'm not sure if I'm able to afford/really need it? Any advice would be greatly appreciated! Thank you!!

Discussion (6)

What are your thoughts?

Aidan Neo

Aidan Neo

14 Aug 2020

Financial Services Consultant at Manulife Financial Advisers

I believe the main concern is also the job security since you are under the SGUnited Traineeship, then in case you might want to consider a short term insurance + TPD + ECI/CI so that you still can enjoy high coverage at a low premium.

When you have better job security, you can then decide whether a whole life will fit into your planning since you do not plan to have kids in the future. Whole life helps in your later stage insurance coverage especially TPD and CI. Rushing to get insurance just because of the CI changes without evaluating your affordability and sustainability may be detrimental. But of course, this also depends on your commitment and budgeting.

In the future, other areas of concern would be long term care and retirement since you will be relying on yourself only. Feel free to talk to other agent to have second opinion too! All the best!​​​

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Elijah Lee

Elijah Lee

13 Aug 2020

Independent Financial Advisor at Phillip Securities (Jurong East)

Hi anon,

We can't control how long we live. However, I'd suggest you look at the maths first between a term CI and a whole life CI.

The whole point about a whole life CI is to ensure that you retain CI cover in your retirement years, where the payout acts as a buffer and provides liquidity so that you don't have to sell off your retirement assets and draw on your savings in order to meet treatment costs, nursing home costs, alternative medication costs, etc (there are many things that a shield plan doesn't cover, and shield plans stop paying for your follow up treatment after a year)

Yes, a term plan may be cheaper on a per year basis, but total premiums may not be that far off for a whole life. Incidentally I was speaking with someone earlier today (also mid 20s and a female) and a term plan with CI/ECI till 70 was going to cost her around $45K (about $1K/yr for 45 years) in total, with a whole life being about $55K-ish (20 years paying around $2.7K/yr). For that extra $10K in total premiums, she would get to keep her coverage for the rest of her life, as opposed to the term plan ending if no claims were made. We often forget that the difference is not just between $1K/yr vs $2.7K/yr, but also about $45K in total vs $55K in total.

Besides, saving $1.7K/yr is an extra $150/mth. You have to be very disciplined to invest that. Most people fail to do so, which defeats the purpose of BTIR.

You definitely need CI coverage, but you have to also consider your affordability. Unless your budget is extremely tight, in which case a term may be the only way out, a WL may still be a decent option.

I wish you best of luck in weighing your options and coming to a conclusion.

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Tan Yu Ji

Tan Yu Ji

13 Aug 2020

Economics at Nanyang Technological University

I would suggest getting a term life+ CI rider for higher coverage and lower premiums, and use the di...

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