facebookIs it true that term insurance is more worth than life insurance? What are the different pros and cons for term and whole life insurance? - Seedly

Is it true that term insurance is more worth than life insurance? What are the different pros and cons for term and whole life insurance?

Will you buy term or life insurance? If you are single? And what if you are married? Will you change your term to life insurance?

Discussion (5)

What are your thoughts?

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Loh Tat Tian

12 Jun 2019

Founder at PolicyWoke (We Buy Insurance Policies)

There are no absolutes until your scope of cover is defined. From there, can there be some form of advice given.

How long to cover, your age next birthday, sum assured.

Term pros

  • Cost efficient, able to convert to whole life, able to employ "buy term invest the rest".
    Term cons
  • lapsed once premium not paid, not inflation adjusted, no cash value

Whole life pros

  • guaranteed renewable and issuability once incepted, policy loan (lapse is less possible), cash value to hedge, inflation adjusted
    Whole life cons
  • more expensive because of savings component, IRR is only 3-4% at most

Know what you need. To find the strategy to cover what is required.

Eric Chia

12 Jun 2019

Senior Financial Consultant at Prudential

Hi Darren, just adding on to others' comments above here.

Term is cheaper if you're planning to stay covered for the next 10 to 20 years (less than 70yo in general). Whole life is cheaper if you prefer coverage until 99yo with limited payment term.

You can consider a combination of whole life and term plans, where the whole life plan covers your final expenses and/or daily expenses for you and your family in the event of death and critical illnesses.

Then term plan of about 10 to 20 years can come in if you have newborn, since extra coverage is needed during the years when your children are growing up.

No right or wrong in planning like this. How much to buy and what to buy depends on what your priorities are.

Both answers above are good. Because insurance is a long term commitment, my own revised guidelines ...

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