Thursday, December 20, 2007

Term with critical illness cover

Hi Mr Tan,

I am 30 year old, looking to buy life insurance. I understand that you advocate buying Term and investing the difference.

I wish to buy Term and also cover critical illness. However, my insurance agent think there is no point in buying this product. What is your advice?


Your agent wants you to buy "whole life" critical illness policy for a large sum, so that he or she can earn a high commission on the policy.

Read this FAQ to make the best choice.

You can also read another posting in this blog to show how much you can get by investing the difference, compared to the cash value under the whole life policy.


Anonymous said...

For a $100k you only pay about $160 a year for term to 65 years old. This is great. With $160 you hardly get $10k for whole life plan and yet the agent gets more commission for selling a $10k wholelife than selling you the term plan.
If the agent settles for this $10K to address a critical illness?
The agent is a mad joker.
Anyway it is not surprising that as low as this has been sold by insurance agents all these years.

Anonymous said...

Sorry for misleading your readers
it should as below for a 30 year old male; $100k sum insured.
Term living for $100k until 65 yrs old =$500 per yr.
Wholelife living is abt. $2500 per yr.
Limited premium abt. $2850
With $500 you get $24k coverage for whole life which is grossly under insured.
Commission for agent.
$100k Term commission is $50
For whole life on $25K sum assured is $200.You see the difference in commission
Imagine $2000 saved and invested for next 35Yrs at a conservative rate of 5%. The amount is abt $190K
Over 35 years, close 2 eyes you can easily 5% if not 8% and above.
It is damned stupid to let the insurer invest for you in a portfolio(life fund) that makes no difference to risk, time horizon and goals.It is a one size fits all portfolio.

Anonymous said...

Your agent didn't want you to buy term because he or she cannot make money from you.She also doesn't want you to be adequately covered because there is nothing sell to you when you have money. To her you are her life time money bank. You are her source of of her retirement.

Anonymous said...

Hi, if you are really concerned about critical illness coverage, you can buy a term with CI coverage too. I think NTUC Income offers it under their Family Insurance Plan, where you can add a Living Rider. As with any term, pretty affordable too :)

Priya J said...

I came across this link on life insurance policy, hope can provide more insights.

life insurance policy

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