08 Jun 2021
Which company should I buy term plan from? I enquired on a particular company regarding prices for term & whole life. The difference is very minimal and it seems more worthwhile to get a whole life.?
I am looking to get a term plan. 25yo, Budget for term plan to be < 2k a year.
Before looking at getting a term plan first, do look at what you are intending to cover.
Is it death/TPD? Is it CI?
Plans have evolved a lot over the years and insurers have become far more competitive when it comes to pricing.
If it is a vanilla death/TPD cover that you are looking for, then there isn't really too much difference and you can go for the term plan with the cheapest coverage, after considering how much coverage you need, and how long you need this cover for.
If it is CI however, things get a little more complex. There is multi pay CI (which comes as a term), a term plan with accelerated CI rider, as well as whole life plans covering CI. Although you have a budget of less than $2K a year, you also need to consider situations such as whether you will still need CI cover in your retirement, and on top of all that, the total cost of a whole life vs that of a term CI plan. Very often (and given your age), you will find that the total cost of a whole life could be lower than that of a comparable term plan, with the added advantage of retaining your CI cover for the rest of your life.
Furthermore, when it comes to CI, there are many features that may impact your final decision, as not all plans are created equal. As an example, a whole life CI plan may cover different number of CI conditions, some may have more special benefits than others, and some plans may pay out the accumulated bonuses on top of the multiplier amount. All these will have an impact on which plan you deem suitable to your needs.
Seek proper advice and look at various permutations before you decide what to buy. It's a long term commitment and you want your money to be working best for you. Speak to an advisor in order to get more information, quotes, etc.
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