Term Life Insurance
Critical Illness (CI)
Asked on 26 Mar 2020
DPI is only cheaper by $33/yr which is not a big saving vs serve by an insurance agent. I didn't save much, what is the key incentive to go DPI if any? It also doesn't reflect much of the distribution cost saving is passed on to use DPI. Anyone can shed some light? Thanks!
For DPI, the insurer pockets the comms. There isn't so much significant difference between DPI and via an advisor.
If DPI is a whole lot cheaper, they'll cannibalise advisors, and they wouldn't want to upset their main distribution channel.
So I'd suggest working with an advisor, at least they can give perspectives. An advisor's job also doesn't end at just product purchase. There are many additional areas we can help you with like estate planning strategies, cheatsheets for claims, budgeting and financial health checkups, etc.
Great intent in getting yourself covered during this period. Could I suggest if you are looking at getting CI coverage, you might want to look into getting a Whole Life policy for that?
Reason being, CI is something that is not limited to age, so you definitely should consider CI coverage to be throughout your lifetime. A term policy is good to give you the biggest coverage at the most affordable rate, and this is most ideal to cover your potential earnings during the period where you are still working. So do consier product bundling for your ideal coverage.
In regards to whether to buy direct or to buy through and agent. I think the main difference is the interaction. And also if you meet up with an agent, he or she will definitely give you advice that might suit your needs better and also you and the agent can have proper and further discussions for proper planning to ensure you have the best and proper coverages.
One of the first key question will be: Are you capable to understand your own financial needs and goals for the future?
One of the next key question will be: Are your beneficiaries equally capable to carry out the claim related duties when you are not around?
If we are referring to the coverage, e.g. death, then the definition for payout is more or less standard. When the day comes, who should be the appointed executor or administer for your insurance policies? Then, is he or she well-versed enough to know the requirements from the insurance company such that the claim can be processed smoothly?
Thereupon, the only way to receive help is to get it directly with the customer service staff at the respective office and multiple trips may be required, depending on the understanding and whether the outstanding requirements are complete.
Of course, this hassle is slightly reduced if we have a comprehensive portfolio summary to help our beneficiaries. Otherwise, it is an unnecessary mess that may be avoided.
Additionally, you wil have to make a trip down to the customer service centre whenever you need to make a policy related request - which is yet and again another hassle if you have a full-time job. Ultimately, time is a precious and limited resource.
Of course, if your family and you are capable enough to handle such affair, then go for it since you get to save some cost. At the end of the day, it is the value that you get in return for the price you pay.
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