Need advice: A whole life insurance plan and increasing hospitalisation premium. What to do?

You're on the right path if you plan to invest after securing your insurance. As they say, we have to prepare for the rainy days. And insurance, in my opinion, is the best way to prepare for those days. But I get your concern. There are a lot of options for investments (not to mention a lot of agents also) so it can sometimes be quite difficult to decide what to prioritise. I have friends in the insurance industry so I understand both sides of the equation. Still, the decision is ours. Don't give in to some agents who do hard selling.

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I recently watched on mewatch an episode about insurance. It talks about what kind of insurance we have to prioritize, whether we should buy all, and whether we should first buy one then another. Here's the article I found it on https://www.vicollege.com/do-you-need-insurance...

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Hope it helps you!

Hi anon,

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Premiums for your whole life plans will end in 15 years and you'll have increased cash flow to deal with the escalating hospitalization premiums by then. Don't downsize your life plan. We get less healthy with age and it is very likely that whatever CI plan you buy next will have similar or stricter exclusions.

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Don't worry about the increasing premiums with age first. We just need to plan for it. And the key to planning for it is to ensure that you have enough cash flow to deal with the expected premiums down the road. Of course, we can never know exactly how much the premiums are, but it is still more predictable than a hospital bill.

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To cover increased shield plan costs, you need to ensure that you have streams of income. It's quite evident that your advisor is trying to sell you a retirement plan coming from the angle of setting aside money to cover future costs. Now I would say that he isn't wrong either, you have to plan in order to prepare for it, but you should also look at your retirement planning as a whole and ensure that you capture the low hanging fruits first, i.e. ensure that you can max out CPF LIFE, as that is the best retirement plan. If not, take steps towards that. Only after you can ensure that, then you should consider a retirement plan to supplement your guaranteed income in retirement.

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Investing for income will work also, but the issue is that investments are not guaranteed, and you don't want to be caught swimming naked when the tide goes out. Plenty of companies cut or stopped dividends last year during COVID, and if you were wholly dependent on those dividends for your essentials in retirement (food, bills, healthcare) then you will be in trouble. Try to match your expected essential expenditure with guaranteed income sources.

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Hope that helps.