Term with critical illness cover

Question: In your blog, you said Some people prefer to cover the critical illness under a medical insurance plan' instead of buying a special type of term assurance to cover payment of the sum assured on the diagnosis of the illness.

Is it better to buy term to cover death and permanent disability and get critical illness separately? Or to buy term (including critical illness), since term is cheaper than buying a whole life plan?

Reply by Tan Kin Lian: It depends on the premium that you have to pay.

You should ask the insurance adviser to give you the following options:

* premium for decreasing term insurance (including critial illness) for 30 years
* premium for a whole life plan (that covers critical illness)

You can find out the difference in premium. You can calculate the amount that you can get, if you invest the difference in a large, well diversified low cost fund (assuming that it can earn 6% per annum). You will find that the total accumulated savings could be higher than the cash value under the whole life policy.

I suggest that you visit the business center of NTUC Income and get them to show the figures to you. You can then ask another insurance company to quote for the same plan. Then you can see which gives you a better value.