I'm a 22 y/o male. I believe in buy term, invest the rest. However, today I was advised whole life may be better for my age due to lower whole life premiums. Which type of insurance is better in my situation? - Seedly

Insurance

Asked by Ang Bing Xian

Asked on 12 Jun 2018

I'm a 22 y/o male. I believe in buy term, invest the rest. However, today I was advised whole life may be better for my age due to lower whole life premiums. Which type of insurance is better in my situation?

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Aik Kai
Aik Kai
Top Contributor

Top Contributor (Aug)

Level 5. Genius
Updated on 07 Jun 2019

See whether got limited payment options for the whole life plan. Whole life covers you for life and while the premiums might be high, if you can pay it off within a few years while you are still working using limited payment, why not?

As some people point out, WL have CI coverage which is important during your retirement period.

And since you are young, premiums for limited payment is still relatively affordable.

Not asking you to drop term but a WL with limited payment is a very good addition to your insurance mix

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Ang Bing Xian
Ang Bing Xian

14 Jun 2018

Sorry, could you elaborate on what limited payment means? Do you mean non ILP? I'll definitely avoid ILP.
Aik Kai
Aik Kai

18 Jun 2018

Yes. They are non ilp. Basically instead of paying for life for WL, you pay only for a certain number of years. Like, you pay 20 years only for this WL plan and your coverage is till youe death. This helps in your retirement period whereby you are still covered but you are not paying anymore since you already paid finished
Harris Lim
Harris Lim

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Level 3. Wonderkid
Answered on 13 Jun 2018

I believe in term too - while at a young age, your whole life premiums might be lower, it also means that you have more time to compound your interests!

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Stephanie Ng
Stephanie Ng

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Level 3. Wonderkid
Answered on 13 Jun 2018

SInce you are young, and plus u believe in term, you should stick to term. I am also a beliver of term. I buy the necessary insurance protection and the rest I am investing in low risk like STI ETF!

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Wing Yew
Wing Yew

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Level 2. Rookie
Answered on 16 Jun 2018

You can check youtube video by Suze Orman she has a few videos which compares Term vs Whole Life insurance.

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Galvin Tham
Galvin Tham

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Level 2. Rookie
Answered on 13 Jun 2018

I echo Brandon thought on it all boil down to your Budget and needs

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As Df
As Df

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Level 3. Wonderkid
Answered on 13 Jun 2018

Ask them to give you an actual illustration instead of "maybes" and "tiagong". Compare it with a level term plan of the same amount taking time value of money into account.

There will probably be some fudging about how you are also "investing" but just strip that out and look at guaranteed numbers.

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Hariz Arthur Maloy
Hariz Arthur Maloy
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Top Contributor (Aug)

Level 8. Wizard
Answered on 13 Jun 2018

Hi Anon, It's not a question of one over the other.

I believe in getting WL for CI and ECI purposes and a top up of term for death coverage.

The good thing about WL as well is that your death coverage gets inflation adjusted due to the savings element of the plan.

Plus even if you decide to cancel your plan at retirement age, you'll get back more than what you put in. Probably more than twice your total premiums paid.

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Brandan Chen
Brandan Chen

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Level 5. Genius
Answered on 13 Jun 2018

I am a financial planner with Manulife.

I would suggest that since you are still young, couple your insurance policies with a combination of whole life for critical illness coverage and top up death coverage with term. Reason for doing so is that it may be more cost effective for you to take up a limited pay whole life rather than a term for critical illness coverage

At the end of the day, it boils down to your needs and budget.

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Gabriel Tham
Gabriel Tham
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Top Contributor (Aug)

Level 8. Wizard
Answered on 13 Jun 2018

If you believe in term, then go term.

Any insurance will be cheaper the younger you buy. Even for term insurance, it will be cheaper if you buy younger.

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Hannah Foo
Hannah Foo

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Level 3. Wonderkid
Answered on 14 Jun 2018

However low the whole life premiums are, they are still more expensive than Term

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