facebookI'm currently paying 17% of my annual income to insurance and ILP. Is that too much? - Seedly

Anonymous

18 Jun 2020

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Insurance

I'm currently paying 17% of my annual income to insurance and ILP. Is that too much?

Discussion (6)

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PolicyPal

18 Jun 2020

Official Account at PolicyPal

On first glance, it does seem like it is slightly on the higher end. However, this is dependent on your financial situation and the way the Investment Linked Policy is structured. A general rule of thumb is not more than 10% on your insurance products.

Nigel Tan

23 May 2020

Executive Senior Financial Planner at Great Eastern Life

It really depends on how ILP is stuctured, some ILPs have 0 insurance element which makes it more straightforward.

However combined with insurance it could get abit lumpy.

Usually using 10% of your income as a guide should be sufficient for a comprehensive coverage for health, critical illness, life insurance, personal accident and disability income.

However if you have family commitments it could go up to 15% especially if you have children (both paying for increased coverage for yourself & your children's inssurance)

I wouldn't classify endowments if you have any into the "insurance fund" as it provides minimal coverage and is meant more to accumulate wealth for the long term.

Elijah Lee

22 May 2020

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

As a general rule, you shouldn't be exceeding 10% of your income when it comes to your fin...

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