Dear Kin Lian,
I agree with you on the concept of decreasing term insurance. It provides for a married youngster who has not yet acquire an estate sufficient enough for his dependants. Term premium is affordable compared to endowment or whole life policies.
However, what are your views concerning personal accident insurance? Do you think that a person should buy PA insurance at all ages of his life?
In your blog, I noted you mentioned that term life assurance may be stopped at age 60 or when the youngest child reaches 25 years. Why?
In your blog, I noted you mentioned that term life assurance may be stopped at age 60 or when the youngest child reaches 25 years. Why?
I suppose Travel insurance is a form of PA insurance.
MY REPLY:
The need for insurance diminishes when one gets older and the children are grown up. It applies to life and personal accident insurance.
Apart from the financial need (to provide for the dependents), it is all right to have a modest amount of life or accident insurance (say 1 or 2 years of earnings) to leave some money behind for the family. But, this is optional.
Personal accident insurance covers permanent injury. You may need to a large insurance sum to take care of the loss of earnings and the medical bills. This is different from the financial needs of dependents.
Personal accident is affordable. You can insure for $300,000 (cover death and permanent disablement) at a premium of less than $300 a year.
Travel insurance covers death and personal accident that occurred during the period of overseas travel.
I have written in my blog about reviewing your Riders, especially Accident Death Benefit and RCC in some of the old policies issued by Company A.
ReplyDeleteThe premiums are high, and I just met a friend who paid faithfully for a PA for $50,000 past 31 years at $117.50 per year for this RCC.
Well, today, the same coverage $50,000 with $1000 medical coverage included is only $35 with Ntuc Income and if one takes it for 3 years, there is a 15% discount.
My advice is also to review your old policy riders, including Convertible Term and other Term Riders.
- Thomas Phua