Asked by Anonymous
10% of whatever you earn should go into your protection needs.
If $1,1793.30 is not 10% then you alright with your commitment. You should not give up your insurance cause of low pay. You will insurance more if your pay is not as high, cause you will be more vulnerable to the bills and expenses.
Term plan is good if you need high coverage and have a tight budget. Both whole life and term both serve to protect your income, choose the one you need more, as your income grow, you can slowly expand and build your portfolio
My question to you is simple.
What is your current needs? Do you need a savings plan on top of your coverage? Do you need This coverage till age 99? Are you OK with the amount growing at about 3-4% of the money you put in?
From your answer, you are already cash strap. So term is the answer only. If you can afford whole life, you can afford to buy term and invest the rest. Are you going to invest the rest?
If you can't afford whole life, then you are in deep trouble because you definitely have low income, and any advice to buy whole life is really bad imho.
If you're cash strapped and already struggling; review if you're paying too much for your insurance. Whole life is not recommended and to me, more costly so term insurance is the way to go for me if I'm in your situation.
Review your financial status and identify your reasons for getting the insurance. Are you the sole breadwinner? Perhaps after reviewing you'd notice you wouldn't need such a high coverage at this point of life after all.
Please upvote if I make sense 😏
If you are already cash tight with a term plan, don't need to think about whole life becos it's gonna be much more expensive for the same amount of coverage.
I'm not sure till what age you are covered by this term plan, but the sum assured looks quite decent for a 25-year-old.
If you can't afford 100 a month for your insurance, you can't afford to die or fall sick. I'm sorry but that's the truth.
If you really want, you can reduce your sum assured and pay less premiums, and increase it again when you get married or buy a house.
For the same coverage, you would probably be more cash tight should you have taken a whole life plan.
Term provides you with high coverage and lower premiums.
If you are feeling cash tight, it could be due to a couple of issues: 1) Premiums are too high for your affordability 2) You may be spending too much on other expenses
If your overall insurance cost is about 5 - 7% of your income, (I assume your financial advisor also recommended you to take up a shield plan), it should be due to Reason 2 stated above.
Feel free to PM me if you would like to seek a second opinion. I am contactable via www.facebook.com/brandanchen
Term plan - low premiums, high coverage till a certain date
whole life plan - high premiums, low coverage for life
If you find yourself struggling to pay, then its probably too costly for you.
Sit down with your agent or find another financial planner to work out the details for you.