How much coverage should I get for whole life insurance as a fresh grad?

Hi anon,

Broadly speaking, $200K sum assured is a decent amount to start off with. I'd generally use the following guideline: 5 years of expenses (this is dependent on you) with a lump sum for out of pocket costs (usually around $100K). This usually ends up in the region of $160K-$180K for many people and hence $200K would be a decent amount, factoring in inflation over time.

The more important thing is to get CI cover because you lack it, and not because you were told to by someone. You are young and hence your insurability is still there. Over the years, as your life stage changes, you can review and re-visit your coverage, assuming you are still healthy.

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.

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