Whole life vs Term life for a 26 yo male nonsmoker looking to get life insurance with CI/ECI rider.

Hi anon,

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While a little late, I've answered this question multiple times in some capacity or another (sorry, I have over 2000 answers on Seedly so there will be some overlap coming up).

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Reproducing one of them which I feel is relevant to your situation as follows:

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I'd take term insurance if it's more cost efficient than whole life.

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This is usually the case when you're talking about death/TPD coverage, for which term insurance is by far the cheapest solution, and also for the fact that you don't need death/TPD cover for your entire life.. This is also probably where you might have seen the 'Buy Term and Invest the Rest" statement.

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Whole Life becomes an interesting proposition when you factor in critical illness. You can look at the numbers, but right now, a whole life with critical illness/early critical illness rider has a good chance of being cheaper in total cost compared to a similar coverage term policy, with the added benefit that you retain CI cover for the rest of your life. Try adding ECI and LCI cover on a term plan and you'll be surprised at how much the premium jumps by. Unless you strongly believe you can achieve consistent investment returns of at least 6% per annum (investment returns are not guaranteed) and continue this trend even in your retirement, WL will likely be a very competitive solution for you.

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While WL is mainly for income protection, you will also appreciate that the payout, being a lump sum of money, also means that you are free to utilize it for treatment such as a second opinion, TCM, experimental medication, etc, that a shield plan may not cover you for. A payout to cover such ancillary treatment monies would be helpful regardless of whether you are working or retired.

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It is probably appropriate that I also point out that I'm referring to the hybrid whole life-term, or also commonly known as a plan with multiplier/minimum benefit. Such plans combine the features of whole life, term and a limited payment plan into a single package, and most insurers would have their version of it.

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Yes, premiums might be higher by a couple of hundreds on a yearly basis, but you probably pay only 20-25 years as opposed to every single year on a term. In this case, Whole Life has a strong case going for i

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You'll probably need around 4x to 5x annual income for CI coverage as a rough guideline. Lock in insurability as you are still young, and work with an independent financial advisor to understand all the options available to you as well as their costs. Whole Life CI plans are not created equal, some plans have features that others don't. While price is a determinant, it should not be the only factor for you to go by. As a guideline, you should not be spending more than 10% of your income on coverage.

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Of course, if you believe that you don't need CI cover in your retirement, then term might be the solution for you, but I personally believe in have a safety net in retirement and thus I have CI cover for life. However, do note that depending on when your term plan covers until, your total premiums can be significant.

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There you go and I hope that helps. Original answer was here: https://seedly.sg/posts/what-kind-of-insurance-...

Hi it depends on your needs. WL and TL differs in terms of coverage duration and premium amount.

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A simple way to calculate if TL is worth more than a WL is to multiply the premium by the duration of coverage and vice versa for WL to see if the premium is comparable or more expensive.

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Next question is how old do you need the coverage till? If you feel that you do not need the coverage past 65/70/75 then take a term plan. Since the important period is when we are working and having commitments. Protection during that period of time is important to provide for our loved ones should anything happen.

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Do you want the cash value from the WL? Are you able to make your money work harder through other methods? I.e. investment. If your answer is no, then maybe you want to consider buying term and do an investment plan at the same time?

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If you have any questions feel free to reach out to me at 88812967! I am more than happy to help you.

I personally think it depends on what do you exactly want. if you just want protection and does not need to have any cash value at the end, perhaps Term insurance will suit you. It also depends on whether you have any mortgages or children as well. Some people buy Term insurance because they have high mortgage for long period of time so in order to just ensure that mortagged can be covered if anything happen to him/her before the mortgagae is fully done.

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Life insurance tends to be expensive because it Is not just for insurance coverage till 75 years old but there's a cash value to the premium you paid and you may choose to stop anytime and draw out the surrender value (though most people will wait for more than 15-20 years because that's the time at least you can draw out the principal sum placed in).

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All in All, it really depends on what's your purposes and objectives :)

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my 2 cents worth of thought.

personally I bought life insurance at when I graduated

i do have thoughts of buying term insutance now because I have a mortgage and I still neeed to pay the loan for about 20+ years.

There is no right and wrong, really depends on you decide to be covered in your old age.