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Anonymous
When is whole life insurance better than term life?
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PolicyPal
04 Feb 2021
Official Account at PolicyPal
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Yuantai Liu
26 Nov 2020
Chief Coach at Happy Coach
Excellent answer from Elijah, and I have only 2 questions to add:
1) What are your financial goals in the next A) 5 years B) 10-20 years C) beyond 20 years?
2) What do you prioritise?
It would be more helpful if all these are known; otherwise, we are just feeling around in murky waters to find an answer that will almost be impossible to be satisfactory to you.
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Elijah Lee
24 Nov 2020
Senior Financial Services Manager at Phillip Securities (Jurong East)
Hi anon,
I'd take term insurance if it's more cost efficient than whole life, and if I only need th...
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Hi anon!
The key difference between a term life insurance plan and a whole life insurance plan is the term (period) of insurance coverage offered by the plan. For a term life insurance plan, the term is specific (e.g. 5, 10, 15, 20 years etc) whereas a whole life insurance plan typically covers you for the whole of your life.
In addition, a term life insurance plan usually does not offer any cash value at the end of the policy’s coverage term whereas a whole life insurance plan accumulates a cash value after a period of time. As a whole life insurance plan accumulates a cash value over time, the amount of premiums payable for a whole life insurance plan is generally more for a term life plan for about the same term and the same sum assured.
People typically consider their budget for premiums, sums assured, terms of coverage and if they need for their plan to accumulate cash values when deciding between whole life insurance plans, term life insurance plans or even other types of insurance plans.
It is therefore important for you to speak with a financial adviser about your needs before making a decision.
For more information, please refer to this article.