If you have a life insurance, do you wait to redeem it and get term insurance and invest the difference. Is it wiser? - Seedly

Insurance

Asked by Anonymous

Asked on 07 Jul 2018

If you have a life insurance, do you wait to redeem it and get term insurance and invest the difference. Is it wiser?

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Cherie Julianne Tan
Cherie Julianne Tan

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Level 6. Master
Answered on 20 Jul 2018

Some ways you can compare to see if it's worth keeping it

  • How long do you have to pay for it?

If you only have to pay for a limited time for a lifetime coverage, I would suggest to keep it as it covers you till age 99. Unless you are able to find a term insurance with higher coverage and lower premium, which brings me to my next point.

  • Would buying term insurance to cover yourself till your desired age be cheaper than all your premiums paid & payable for your own life insurance? (Compare total premiums you need to pay / have paid between your life insurance and term insurance you intend to get)

I am assuming you got your life insurance couple of years back, if you were to get term insurance now, how much the insurer would charge you for premiums would def be higher because you are now older. So doing this would help you see if it is "wiser" to make a switch.

There is no textbook answer for this, but I feel it is best if you are able to work around your life insurance by adding term insurance during stages of your life where you are highly depended on.

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Choon Yuan Chan
Choon Yuan Chan

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Level 4. Prodigy
Answered on 30 Jul 2018

The wisest time to redeem a life insurance is at the expiry of your life

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Brandan Chen
Brandan Chen

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Level 5. Genius
Answered on 30 Jul 2018

It really depends on the life insurance policy that you currently hold and your current age group. Shed more light on those information and I believe that we would be able to assist you further in your questions

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Bang Hong
Bang Hong

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Level 4. Prodigy
Answered on 20 Jul 2018

Most of the time it is not wiser matters, I think it would be figures (Absolute numbers matters).

Do a comparison and the number will give you the idea to make the decision.

But typically if you are already holding a life insurance for a long time, the default option is to hold it if it is not that taxing to you financially, just leave it there.

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