Asked on 12 Dec 2018
Have been reading responses regarding the type of insurance I should get and have read that getting a term and invest the rest is better than a whole life. I don’t have time to properly learn and invest though. Do share your perspectives please thank you!
I advocate a basic WL (with CI/ECI cover) plus term till 65. This will provide cover for after 65 as well as affordable and sufficient cover during your working years
Of course, the argument why you don't get WL if you buy term invest the rest is that after 65, the investment you have built up will serve as sufficient self-insurance.
There are a few points to take note if you choose BTIR route:
1) Market conditions when you are 65 is uncertain. Sure, over 20 years, markets generally are better, but this is not a guarantee.
2) Your investment after 65 should be providing you a passive source of retirement income. If something major happen, you will have to dig into this portfolio. Depending on the severity, the passive retirement income you are depending on will drop.
I never believe it's one against the other. But instead how much Whole Life and how much Term.
I would tag my WL with my CI coverage. And the rule of thumb for that is 3-5 X my annual income.
I will then add a term to retirement age for 7-12 X my annual Income.
So if I'm making 100k a year.
I would get a 300K WL + ECI plus a 1.2M Term to 65.
A whole life plan is not for investment. You're not supposed to cancel it at 65. You keep it till you die. It grows in value to adjust for inflation.