Term to 99 years

Dear Mr Tan,

Do you think there is any value of a term life policy that is guaranteed to age 99? I know of a few IFAs who attack term policies which are not guaranteed to age 99; instead they push for whole life or term policies that runs to age 99.

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REPLY:

A term to 99 years is like a whole life policy, but it does not have any cash value.

I do not like this plan. You are paying a fairly high premium, but you are not given the right to have a cash value when the plan is terminated. I suspect that this is a way for the insurance company to keep the cash value when the plan is terminated.

I prefer a term policy that expire at age 65. In fact, I think that a decreasing term policy is better.

If you compare the premium between term to 99 years and decreasing term (at 65), you will be able to make a better choice.

Read my faq on "Choice of Insurance Plan"