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Anonymous

08 Jul 2020

What are the different types of Life Insurance? What are the differences between them?

Was looking through and wondering what the differences between Term Life and Whole life?

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    PolicyPal

    PolicyPal

    08 Jul 2020

    Level 11Β·Official Account at PolicyPal

    "There are 3 main types of life insurance.

    Term Life Insurance

    Term Life Insurance covers you for a period of time (the term), after which it will expire. It provides basic protection at an affordable price. Whole Life Insurance

    Whole Life Insurance, as its name suggests, covers you for your whole life. As such, it requires a higher premium than Term Life Insurance. However, it can be an investment option as it has a cash value that can be obtained when you surrender or as a death benefit.

    Investment-Linked Insurance

    Insurance-Linked policies are investment plans that include life insurance coverage.

    Do check out our article to understand them in greater details."​​​

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      Elijah Lee

      Elijah Lee

      22 Jun 2020

      Level 17Β·Independent Financial Advisor at Phillip Securities (Jurong East)

      Hi anon,

      Term Life

      • Covers you for a specific duration (I.e. the term)

      • Coverage ends after that

      • No cash value, but may have a surrender value sometimes after a certain period

      • Cost efficient to cover death/TPD

      • Premiums are generally payable for the entire duration of the plan

      Whole Life

      • Covers you for whole of life (age 99/100/life)

      • If you reach the end of the period, policy matures

      • Premiums used to be payable till 85 or so, nowadays they are payable for a limit number of years only (20-25 years)

      • Has cash value/bonuses

      • Able to take policy loan if you are unble to pay the premium (after policy acquires cash value)

      Over the years, premiums have come down quite a bit for both type of plans. You will usually want to look at your needs first, before deciding if a term plan or a whole life plan will be a better fit in terms of coverage, features, total cost, etc. It really depends on what you want to cover.

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        Hey there!

        Term plans cover for a period of time. The downside is that it doesnt have a cash value ...

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