Would you recommend a 20 y/o to get term or life insurance?

Luckily.. there are flex options these days.
You can consider looking for a simple basic sum assured whole life policy with accelerating feature for early CI / CI / TPD etc with limited pay option.
And some policies come with milestone enhancement options (i.e. when you get married/have child etc) that you can consider upgrading the policy if you hit them.

The main reason for that is to enrol early to lock in the premium (premiums increase with entry age) and to make sure you have coverage before pre existing illnesses kick in. I take the sum assured as funeral expense so basic sum assured need not be too big but make sure accelerator multiplier is good. The accelerating feature will kick in during your economic years.. so they are like term enhancement.
You need to shop around for this and compare though.

Term usually does not cover after a certain age (those that do will be very expensive close to old age) but it also depends on your "life /death philosophy" and investment or retirement plans. If you have saved or made plans outside of insurance to cover these during your economic years.. then you should be fine.

That said, if you don't hold a regular job, do assess if whole life policies are feasible as they tend to be more expensive.
Else, primarily, make sure your hospitalization and personal accident policies are first purchased. You can keep topping up with term insurance when your liabilities or dependent needs increase etc.

Multi pay vs single pay CI...if you have a strong family history of CI or lead a super unhealthy lifestyle, by all means go for multi pay CI. Else, this multipay CI option is quite expensive for a 20yo I feel. Get some quotes and compare so you know how much outlay you are looking at.

Once you get a regular job, it may be better to explore the disability income insurance that many overlook. This one can provide you with income till you "retire"... And its relatively affordable.

Not an agent, all these are just personal opinions for your consideration

If i can turn back time, I would get both still. A small amount for Whole Life (which covers even your own expenses after 65 etc) and a Term life to boast coverage till 65, where many of your liabilities will pile up and peak when you have a mortgage loan, children who are just born, and slowly reduce once you finish paying up mortgage and children are working.

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Term insurance are also slowly acting as HPS, which allow you to continue insuring (if you choose to buy a 2nd BTO or Condo), which makes it more worth the money in this event. (of course, dun cramp your head for the what ifs, since you still got 10 years to decide on the term insurance).

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Although you still have about 10 years to consider for life insurance (based on premium increase), i would urge you to buy the whole life with CI coverage earlier (since CI increase exponentially once you hit 30 and above), as this cannot wait.

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Also, please take note of the CI coverage, is it additional rider (sum assured not affected by payout), or accelerated benefit (sum assured affected by payout). You wouldn't want to be left naked with no Sum Assured due to CI payout.

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The rest of the amount (imho, should you have bought whole life instead, the difference in premium), should be channelled to investment if possible (not ILPs but index investing, unless you are fully aware of the ILPs pros and cons), for your coverage in later life (after 65).

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You may wish to explore more once you understand your life changes.

Hey Anon great that you're thinking about getting yourself insured early! Before I talk about life insurance, please make sure you get your health insurance settled. That would be your Integrated Shield Plan in Singapore context.

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So to address your question. The question may not be Term or Whole Life, but how much insurance should I get, and for how long?

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Your advisors are absolutely right when asking if you have dependents, because that is what Life Insurance is about.

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You purchase life insurance to replace the income you were supposed to generate but now cannot due to Death, Disability, or Critical Illness for the people that that income was supposed to be for.

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Usually this would be for your spouse or family. But as you mentioned, you're not married or a parent yet.

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However, today is the cheapest day insurance will ever be for you. It only gets more expensive every year. And now while you're still healthy, you can get yourself insured without a worry.

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So getting insurance early is so that you are able to lock in your health status and lock in the price of your cover at the cheapest it'll ever be.

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So now, some rules of thumb provided by LIA (Life Insurance Association Singapore).

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In the event of:

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1) Death & Permanent Disability (TPD) - Get covered for about 10 to 15 times of your annual income. This means that in the future, if you were to pass on while still generating income for your family, they will have 10 to 15 years of your income given to them so that life can continue as is and their quality of life doesn't have to be sacrficed until they rebound and readjust with your untimely demise.

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2) Critial Illness (CI) - Get covered for about 3 to 5 times of your annual income. In the event of CI, you can survive if you receive the required treatment early. This would be paid for by your hospital plan. But you'll be unable to continue working and thus, there is a loss of income for the family.

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Why 3 to 5 years? Hopefully you'll either outlive that, or die before it. Sounds harsh I know, but it's my job to look at Death and Disease as something that happens to everyone someday.

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Why not more? Well that would be due to budget, you can always purchase more, but CI cover is expensive as compared to just death cover.

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Now, the next question is how long?

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Many would argue that you only need life insurance till the day you plan to not generate any more income for the family. Because if there is no loss of income, there is no need to insure it. So people usually cover themselves till 65. This reduces the cost of insurance by quite a bit as well. As the likeliness that you die or fall sick before 65 is a lot lower than say 85 or 100 where death and disease is usually a certainty.

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I personally insure my income till 65, but my expenses for life.

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So for me it's not Term OR Whole Life, but how much Term and how much whole life?

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This can be decided by you. I personally have 3 years of my income as whole life that would adjust with inflation. And 12 years of my income as term till 65.

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I would also top up more insurance if there is an increase of my income by at least 20%.

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Lastly, a way to determine how much term and how much whole life would also be due to your budget.

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I personally place Insurance as important as savings and food. People say pay yourself first by saving a % of your salary and never touching it. Do that before you spend.

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I take the same approach with insurance. I only spend what is left.

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But for others this can be a little bit hard. So I recommend you to not spend more than 10-15% on life insurance. You still need to save and invest. :)

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I'm always available for a chat, you can reach me through the links on my profile page. All the best friend.

Hello!

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first off, just wanted to ask you, are you supporting your parents at the moment? If you’re only supporting yourself at the moment you can probably get a life insurance with lesser coverage since, as you mentioned, you don’t really have any dependents at the moment Since you’re still very young.

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But of course once you grow older, and your liabilities get bigger, and the more people will start to depend on you and that’s when you will start seeing the importance of Life Insurance. but of course it’s also to get covered now when you’re young especially if your dependents are your parents. Not to worry if you were to buy a lesser coverage now because there are products whereby you can always increase it, once u grow older.

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hope this helps! if you have any more questions can always contact me at https://www.facebook.com/mabeltanyuling

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Cheers!

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