What's the best value for money insurance in my situation? - Seedly

Insurance

Asked by Anonymous

Asked 2w ago

What's the best value for money insurance in my situation?

Hi, I’m a 33-year-old single female, non-smoker. Current dependents are my parents. I’m looking for the best value for money insurance, if possible? 1) At 33, is whole life insurance still a better option than term life for total premiums paid? How about term insurance till 65/70? 2) Is multi-pay critical illness insurance beneficial to get? Is whole life insurance + multipay CI at 33 recommended?

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Well, it totally requires us to know a few things

1) What is your objective in the insurance? A peace of mind? Returns too?

2) What is your current income? The hard guideline is not to be more than 10% of your take home pay. Anything more is going to create a mental pressure on your income. But you can also spend less than 3% if it fit your objective.

3) Are you familar with investment? What is your exact risk profile? What returns are you looking at? How long can you ride the volatility? Will you set aside premium terms (meant to be Whole life premiums) just for CI protection?

There are many moving parts which require you to answer, before anyone can recommend you anything based on ANY criteria.... If you are just looking at the most efficient (and able to keep to your investment opporunities and profile), mathematically speaking, Buy Term Invest the rest works better. However, psychologically, nobody can say anything until you know what is your objective.

As your age is at 33, it may be prudent to look at Term CI/death (accelerated) and Term Death till 65 for most cost efficient returns.

The mathematical calculations assume the following:

For Term death, its really affordable that you just choose, because leaving your money with Fixed Ds and high interest savings account can beat the returns for Whole life plans as such.

For CI protection, its a 4% returns to beat. This can be protected with either WL plan, or a BTIR strategy using CPF-SA contributions only.

For ECI, i personally find its expensive, and hence did not opt. For BTIR, its a 6% compared to Whole life.

However, if you have dependents, you may wish to do a review as 65 may

not be sufficient.

Your question is too difficult to answer without knowing what you are looking at. I am wary to give you simple and straightforward because there is no best for such a case unless your paremeters are very defined. (Your scope is well done).

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Loh Tat Tian
Loh Tat Tian

4d ago

Yes that's 1 way to look at it.
Loh Tat Tian
Loh Tat Tian

4d ago

But the other is, because it is very cheap to cover, just buy the TPD rider.
Thelobang Thelobang
Thelobang Thelobang

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Level 2. Rookie
Updated 2d ago

Keep it simple, step by step. Don't overcommit and stress your cashflow, build up your basic protection first such as term life, personal accident and hospitalisation (=Medishield related). For example, get $1 million of basic coverage for only $312 a year (= $26 a month). Read more at https://thelobang.com/index.php/2019/08/27/insurance-basics/

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Lt
Lt

4d ago

Thank you, I’ve read it. What about critical illness coverage though?
Thelobang Thelobang
Thelobang Thelobang

2d ago

Critical Illness coverage - assuming you have already built up your basic protection as mentioned above, CI coverage possibilities include 1) if you can access MINDEF & MHA Group insurance underwritten by Aviva, you and your family members can each get up to $350k of Living Care (=critical illness) coverage for just $22 for age group 31-35 years. If your budget allows, you may wish to add on Living Care Plus (= early critical illness) coverage up to $300k at $21 a month. 2) for non-NS related persons, or if you wish to buy more protection. There are lots of CI plans out there. For example, find out more at https://www.valuechampion.sg/best-cheap-critical-illness-insurance or http://www.comparefirst.sg.