Asked 2w ago
Don't mean to sound unfilial, but this is probably the best shortcut to become a millionaire in Singapore!
Why is seedly promoting these garbage questions?
Assuming both are at 60, premiums for term policy will be extremely high for them. I'm excluding life since there will be cash value included which will cost even more than term. To start, how will you know the age of their passing? Given most singaporeans live till 75-80 approx, you will need to be covered for at least 20years. Females tend to live longer so their premiums will be higher than males.
Using Singlife term plan,
20y plan non smoker 1.4k/mth for 2m payout (1m plan each), if they live beyond 80, thank you for paying.
40y plan non smoker 3.9k/mth for 2m (1m plan each). this is pointless.
To sum up, buying term is a gamble and you have to hope that they go within the term period. Of course there are better plans with different prices and tncs, just make sure you do your research.
Insurance is a risk management tool for us to protect our dependents. If our parents bought a $1 million policy on themselves with us in mind, it's their gift and legacy to us.
If you buy the same policy on their lives hoping to profit from their departures, you are nothing more than a loser waiting for an inheritance which you have done nothing to work hard for.
My friend's father bought an insurance for himself. After 2 years, he committed suicide. So his kids will get an annuity for many years.
A $1 million term plan has been pitched by some advisors and term plan believers as a way to plan your legacy.
While it may sound enticing, term plans should be kept to its purpose, to cover for a specific term. There are many things in life that are hard to predict, why complicate it further with things that were made for a different purpose?
Things that could go wrong with such planning:
Your parents outlive you and cannot afford the premiums; policy lapses and you lose the money you "invested"
You are not able to keep up with premium payments as you also enter retirement while your parents continue to live even older; policy lapses and you lose the money you "invested"
Your parents live beyond the expiry of the term (one of the insurer actually has a policy that pays out the sum assured at 101 but the premiums costs more than a UL); you lose the money you "invested"
Remember that actuaries would have factored in the rate of policies being lapsed in their calculation of term policies. Do you want to be a part of their projected lapse cases?
To get $1 mil the annual payment is pretty high isn't it? What happens if they don't conk out until 101? Jialat la...
It's wiser to take the money you pay for their insurance premium and invest in various investment avenues.
You get to enjoy your investment profits with the flexibility to cash out your investments time to time and go have a great time together with your parents creating memorable moments than to just wish they pass so that you get your million.