Whole Life Insurance - Seedly
 

Whole Life Insurance

A mix of coverage and savings components

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Insurance

Whole Life Insurance

Lifestyle

Hi anon, Living policy is one of the best NTUC policies from older days. It may be tempting to surrender the plan to change to a limited pay, but given the fact that your plan has been running for 16 years, it is very likely near break even or has even broken even. The compounding effect on this plan will be tremendous. I'd recommend that you think in the context of the longer term. When you retire, your premiums will still be $640/yr and that works out to be $64 a month. Is that really a lot when you retire in 30 years time? Also, not that I would recommend it (since living policy has CI cover), when you turn 60, NTUC allows you to convert plans with cash value into a annuity, so you can still get some mileage out of this plan. Lastly, if you don't wish to pay when you retire, you can always change it to a paid up plan. You already have 400K of CI cover (not sure if you have ECI or not) from your GE WL so your coverage is quite a fair bit. Do you really need another WL plan?

Insurance

Critical Illness (CI)

Early Critical Illness (ECI)

Whole Life Insurance

Term Life Insurance

Hi Anon, Yes, it is possible, however as mentioned by Zhe Liang, there might be loading, meaning you will need to pay more premiums as compared to person within the normal BMI range. In regards to WL or term, it really depends on what you are looking at as both have their pros and cons, and actually in some instances, they can actually compliment each other :) Do speak with an agent as they will be able to advise you better with solutions that can meet your needs

Insurance

Whole Life Insurance

Early Critical Illness (ECI)

Critical Illness (CI)

Hi anon, The question of how much CI/ECI coverage in your golden years is sufficient is quite subjective. It does depend on a number of factors. Naturally if you want more coverage, you will have to pay more. However, once your multiplier ends, you would still have a certain level of coverage that will be higher than 50K/25K, this is due to the bonuses that are credited to your policy. Although I usually think that a 100K/50K baseline would work out better, as there is a large sum discount when the sum assured goes higher (i.e. a 100K x 2 policy is less than twice as expensive as a 50K x 2 policy). You can try to see if the plan you are looking at has an option to stretch the payment term to 25 or even 30 years since you are still relatively young. The next thing that you can consider is the fact that once get a policy, your premium will most likely stay at that rate, but your salary will increae in future as you are still very young. So if you go slightly over budget to get a better baseline coverage, I wouldn't sweat it. If these don't work, then stick with your $50K x 4 coverage and you can always get another plan later on, as long as you are insurable.

Insurance

Whole Life Insurance

Term Life Insurance

SG Budget Babe

Family

Alvin Teo
Alvin Teo
Level 6. Master
Answered 5d ago
Hi Kenny, get whole life. In short, a term plan typically is used to cover any outstanding debt or “unearned” future earnings due to premature death. A strong key reason for getting WL for baby apart from low cost of insurance is that you can add on Early stage critical illness / multipay CI riders. The purpose is now different as opposed to getting term. If child is unfortunately diagnosed with early CI, one or both parents may need to stop work to look after the child. The payouts from the CI benefits is to now protect the income loss of the parents. As others have mentioned, do ensure you have shield plan and PA plan for yourself and your baby. For shield plans, I have covered it comprehensively in an article here: https://www.theastuteparent.com/2019/09/best-shield-plan-for-newborn-baby/ AIA is no brainer because not waiting period for congenital illnesses and coverage of $2 mil for private hospital plan For PA plans, can consider Sompo where if both parents were to be insured, the child gets free coverage as well to a certain extend: https://www.theastuteparent.com/2018/03/sompo-pa-star-personal-accident-insurance-for-family/amp/ To help you do these things better and with clarity, you need to speak to an independent financial adviser like myself to save you time from doing it yourself and filtering sales pitches from various agents saying why their company’s the best as we can advise, compare and distribute plans from multiple insurers.

Whole Life Insurance

Insurance

Hi Dia, It sounds like you have a Prudential term policy with riders (I'm guessing) You'll have to look at what kind of cover is important at this point in life, and how much cover you need. Do consider the following guidelines: 1. Hospitalization plan. This covers any hospital bills and associated pre/post hospitalization costs. This would be from an integrated shield plan, with a rider to take care of the deductible/co-insurance. Depending on your budget, you can take a private hospital plan and downgrade later, or just go for Goverment A ward. 2. Critical Illness coverage. This provides a sum of money for you to cover your expenses and other out of pocket costs should you fall critically ill and are not able to work. Usually recommended to cover at least 5 years of expenses and an additional sum to cover out of pocket. This is usually via a limited payment life plan, or a term plan, depending on your budget/needs 3. Death coverage. This provides a lump sum of money should something happen to you. Not mandatory if you have no dependents or liabilities. Usually takes the form of a term plan. For the coverage amount, you could use a multiple such as 10 x of your current income, or calculate based on your current liabilities. 4. Personal Accident. For the minor stuff like TCM claims, etc. It's important to ensure that you have the right kind of coverage so that you can maximize the use of your money. If you can provide the exact details of your current policy, I might be able to give a more detailed breakdown.

Insurance

Critical Illness (CI)

Term Life Insurance

Whole Life Insurance

Hi anon, We'll have to understand a little more about your situation before you finally make the call. I don't advise mixing insurance with investments. Why did you get the ILP in the first place? Every insurance policy is a committment and you'll want to make sure that the plan is suitable for you in the long run . I suppose you have concerns about the escalating mortality charges in your golden years, and yes, this is something that can cause the plan to terminate due to insufficient value. There's no guarantee whether you'll have coverage with an ILP in your later years, contrast this with term or whole life whereby cover is guaranteed for the appropriate duration. Firstly, if you are planning to get only a CI plan, then definitely there are options besides ILP. One common alternative is a whole life limited pay plan which will allow you to pay premiums only during working years, and provide you with CI cover for life. There are also other options such as multipay plans and a term plan with a CI rider; in order to understand which plan suits you, you need to understand how these plans work. You'll want to sit with an independent financial advisor in order to understand all options available to you before deciding between term or whole life. Next, are you insurable? Today is always the healthiest day of your life, every day we grow a little old and less healthy. If one wants to get a plan to cover CI, regardless of what kind of plan, it is always better to get it when you are healthy with no issues. Then, what amount of coverage do you need? You'll want to work it out, there are some rules of thumb with respect to the amount of cover, people look at 5 x annual income, some look at 5 x annual expenses plus an amount to cover out of pocket, etc. As always; your individual situation must be taken into account, and I'd advise you to speak to an independent financial advisor before proceeding with any next steps. If you have further questions, you can reply to this post.

Insurance

Investments

Savings

Whole Life Insurance

Term Life Insurance

Hospitalisation Insurance (H&S)

Follow the rules of thumb. 10 X Annual Income in the event of death 5 X Annual Income in the event of Illness These two things will cost 8% of your annual income. So if you make 1.5k/mth or 18k per year, you should have 180k death cover, 90k illness cover, these would cost you at max about less than 1440/yr or 120/mth. Save 20% aside of whatever you earn for retirement. When you make more in the future, you can decide to top up to get more cover and save more.

Insurance

Whole Life Insurance

Retirement

Hi anon, Yes, there is a client I know who put in a single premium and was able to obtain the higher non-guaranteed projection in terms of the payouts, as shown in his BI. (5.25%)

Insurance

Critical Illness (CI)

Hospitalisation Insurance (H&S)

Term Life Insurance

Whole Life Insurance

Hi anon, CI and early CI is not classified as medical insurance. Medical insurance takes care of the bills, and that would be their hospitalization plan. CI/early CI falls under the realm of life insurance, which pays out a lump sum upon fulfillment of certain criteria (e.g. CI or TPD, etc). Whether or not the price is high can be known if you compare across the insurers, assuming the same type of coverage (although no two insurers have exactly the same features for their plans, so it will not be exactly apple to apple). What's more important is whether the amount that they are insured for is enough. I'd normally recommend sufficient cover for 5 years of expenses and an additional lump sum for out of pocket expenses. Assuming that amount of $100K is what they needed, then what you were probably quoted is a whole life insurance with a limited payment term, and likely to be one with a 2x multiplier, without early critical illness. When one is in their 50s, early CI tends to be extremely expensive. However, such policies will build bonuses over time so the true value of the policy is that it is inflation hedged. They will also be covered for life. I'd recommend that you take a look at their budget as well. If they are spending 10% of their income on insurance should they get this plan, then it is on the high side and you might want them to consider carefully before proceeding. It might be good for you to get quotations of similar plans from an independent financial advisor to help them understand the options available. Don't neglect other classes of insurance as well; Eldershield and the supplements are just as important. Feel free to reply to this post if you have further questions.

Insurance

Whole Life Insurance

Term Life Insurance

Critical Illness (CI)

Hi anon, There are various insurers carrying multi-pay plans, so if you are specifically looking to get a multi pay, it would be good to sit down with an independent financial advisor to understand the structure of multi pay plans; not all plans have the same payout structure/criteria. You will need to consider these few key factors for multi pay plans: 1. Payout Criteria (The trickiest thing to understand as no two plans are similar) 2. Payout/coverage amount (This should be based on your needs) 3. Stages of CI covered (early/intermediate/late) 4. Premiums payments/premium refund (some plans will waive premiums after you are diagnosed with major CI, but continue to cover you; some plans will have a surrender value after a certain number of years, etc) 5. Duration of cover (Depends on your needs) As these criteria are unique to your requirements, only by letting a consultant know your needs, can the right selection of plans be presented to you for your consideration. For your question on term insurance, if it is only covering death/TI/TPD, then Critical Illness will not trigger a payout. To be very specific, terminal illness is defined as "The conclusive diagnosis of an illness that is expected to result in the death of the Life Assured within 12 months. This diagnosis must be supported by a specialist and confirmed by the Company’s appointed doctor." In all likelihood, no doctor will likely dare to certify that one will pass on within 12 months no matter how ill you are; as medical technology advances, what if someone on the verge of death was saved after the payout was made? Then who would be held liable? If you need more clarification, feel free to reply to this post.
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