Asked by Anonymous

An agent recommended me Whole Life insurance multiplier with a premium term of 20 years. Can I treat this as a way to save my monthly income for the surrender value at the end of the policy's life?

I am a 24 year old fresh grad. And an only child. Using this as a way to force myself to save.

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    • Loh Tat Tian
      Loh Tat Tian
      234 Answers, 337 Upvotes
      Answered on 12 Nov 2018

      A Whole Life Plan, as the name suggest, is a "whole life" plan. The most if you wish to save, is to count it as a retirement plan at age 70 (but please do your own calculation on the internal rate of return).

      A whole life plan is a hedge for Critical illness protection more than savings (which, unless you are looking at retirement protection and inflation hedged).

      To get a decent return, you should consider Singapore Savings Bond, or even CPF (up to $60,000), to enjoy the 3.5-5% interest it gives.

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    • Nicholes Wong
      Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
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      Top Contributor (Feb)

      398 Answers, 530 Upvotes
      Answered on 12 Nov 2018

      If this is your only way you use to force yourself to save, you are not saving anything. Dont get whole life for the surrender value. Surrender value is when you decide to stop the whole life policy for whatever reason. Using surrender value of a whole life to force yourself to save doesnt make sense for me. Save before you spend. If you think saving money is very important for you and your family, start taking control of your money instead of getting forced to.

      End of the policy life = End of your life.

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    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
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    Top Contributor (Feb)

    358 Answers, 605 Upvotes
    12 Nov 2018

    You're dead at the end of the policy life.

    A whole life plan is meant to only touch when you're dead. Not much use for the money there.

    Get it for lifelong protection for the people depending on your income.

    Treat the cash value in the policy only as an emergency fund you can tap in, if you're unemployed for a long period of time, etc.

    If you're planning to cancel the policy for its surrender value at retirement age, I'd suggest you take the Term + Invest the Difference route.

    However, there are other policies that can help you save.


    Usually they are bought with a very specific end goal in mind. A down-payment on a house, children education, retirement nest egg.

    But if you're just looking for a safe way to accumulate money with a 3-4% return, you can look into getting a perpetual endowment plan.

    Some of these plans allow for unlimited withdrawals after a specific period of time, and you can let your money compound even after the premium term.

    It becomes an income generating asset that's quite flexible.

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