When would you advise getting a term plan + CI or whole life plan + CI?

Hi anon,

I prefer to decouple the coverage in that it allows me to customize what I want to cover, for how long I want the cover to last. Also, I note that you didn't mention about hospitalization coverage (probably because you have it already?), but if you don't have that, you should get that first.

In your case,

1. Death and TPD can be covered via a term plan. The amount can be based on your expected liabilities and monies needed for future dependents and is meant to meet those obligations. As an example, a $1 million term covering you till 65 will probably cost less than $600/yr, so this is a very cost effective way of covering. The actual amount you need should be discussed with an advisor, especially with regards to an amount that you want to prepare in the event of future potential laibilties and dependents

2. If you wish to cover CI during retirement years, a limited payment whole life plan with a multiplier will be a cost effective option. The money is meant for you to cope with out of pocket costs and living expenses for at least 5 years in the event you are ill. You can get $100K x 3 of CI/ECI coverage and it'll cost less than $3500/yr for 20 years. You'll get to retain $100K of CI/ECI cover in your retirement along with whatever bonuses have been credited to the policy. If you took a term plan, you'll have to pay every year even in retirement (unless you claim) and it won't be cheap if you add ECI coverage into a term plan. Another way is to get a $100K x 2 whole life plan, and complement with a multi pay CI policy of maybe $50K till age 65/70 if you are concerned about recurring CI. There's no right answer to which is 'better', so you would want to sit down and speak to an advisor who can help you further regarding your situation.

Hope this helps you get an idea.

My personal preference:

1. Get whole life plan + CI as soon as you can afford it, such as when you start stepping into the workforce as life insurance is relatively cheaper when you are young. But when i said getting whole life, i do not mean getting ALOT of coverage, as you should only buy based on your ability to earn. You can consider getting more as you progress.

2. Supplement your whole life with term plan + CI should come in when you are getting ready to start a family (typically around age 28-30). This additional coverage provide insurance for coming dependents like children.

3. Also invest while reviewing your insurance coverage biannually, to determine your coverage need based on your living standards and afforability.

There is really no fixed age to buy insurance, it all depends alot on your personal needs and priorities. Based on your inputs of having 95k annual salary, i think you can afford to purchase your insurance right from now. There is no need to wait further.​​​