Why would one prefer term life insurance as compared to whole life insurance?

Hi Alvianto,

I think the main reason why people prefer term as compared to whole life (WL) is mainly the price vs coverage ratio. As from a price perspective, Term is definitely of a better value as for 500k death coverage alone, you can be paying as little as around $30 a month (depending on age). Thus because of this most of us would advise to have a term policy during you active (working) years as you definitely want to have the highest possible coverage as during those years, you would have the potential to earn at least a 1mil based on a monthly income of 3k and being in the work force for 30 years if you had started working at 30 years old.

WL if you are just looking at coverage amount alone, it's definitely not as valueable, however the most important point for WL is that it provides you coverage for the whole of your life, thus this policy should be considered to provide you for coverage against CI, which can occur at any phase of our lives.

So the ideal protection would be a combination of both products because they actually cover you for different reasons. And usually the agent would be able to advise you the ideal coverage that you should have, but of course budget is a concern, they would be able to come up with something that can meet yoru budget better.

Basically, they are two different instruments that are used for different purposes.

Term Insurance

Generally, a term insurance is regarded as an affordable form of insurance coverage for a pre-defined period of time.

More Details:

What is a Term Insurance Policy

Participating Whole Life Insurance

On the other hand, the intention of a participating whole life insurance policy is to cover you for life. Additionally, it provides cash value that grows over time.

More Details:

What is a Participating Whole Life Insurance

Accordingly, it will be helpful to have a comparison between the two types of insurance policy.

More Details:

Term vs Whole Life Insurance Singapore

In order to make the right decision, we need to know your needs and how you intend to plan for your future.

Generally, life insurance coverage can be split into three life's major event,

1. Pre-Mature Death

2. Total & Permanent Disability

3. Critical Illness

Death Coverage

There are a couple of factors that we need to clarify and plan before we can establish whether there is a need for death coverage. For example, do you have any dependents? Do you have any liabilities?

More Details:

5 Reasons why You need Life Insurance - Death Coverage

Total & Permanent Disability

Since you are alive and continues to live, there exists a need to be insured.

More Details:

5 Reasons why You need Life Insurance - Total & Permanent Disability Coverage

Critical Illness

Similar to the rationale for Total & Permanent Disability, there exists a need for you to be insured.

More Details:

5 Reasons why You need Life Insurance - Critical Illness

On the whole, these are general guidelines which may or may not work for you. Therefore, you are encouraged to conduct comprehensive financial planning. Through this process, it ensures that we are well-planned ahead in life. Thereafter, we will use the right instrument to cover your needs in the most effective manner.

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