1. Is it necessary to take life insurance to cover the whole of life or up to age 65 only?
The primary purpose of life insurance is to protect against the loss of income due to premature death. You should have the protection for the period of your working life. Most people expect to stop work at 65. They need life insurance to cover the loss of income up to that age.
2. What type of life insurance plan is most suitable to provide the coverage?
I prefer a decreasing term insurance or family income insurance as they offers adequate coverage at a low cost. Here are some benchmark premium rates:
The premium rate is likely to be less than 10% of the cost of a whole life policy providing the same coverage.
3. How do I save for my retirement?
It is best to invest in a low cost investment fund. A low cost fund have an annual expense ratio of less than 1% per annum, with 50% or more invested in equities. The sales charge should be kept less than 2%.
4. Do I need critical illness coverage?
The expenses for treating the critical illness should be covered under a medical insurance poilcy. You can have an addtional cover of (say) one year's salary to cover the loss of income during the period of treatment. This can be covered under a critial illness policy taken up to age 65 and is optional.
5. Do I need life insurance coverage beyond 65 years?
You need an insurance policy to cover the medical expenses. In the past, some people need life insurance to provide money to pay estate duty. With the abolishment of estate duty, this is no longer needed.
6. Can I use life insurance to leave some money for my children?
If you have excess funds, you can buy a whole life policy with premiums paid through a single premium. You should avoid paying premium after your retirement. Make sure that your own needs (to pay your future living expenses) are taken care first, before you think of leaving money for your children.
You should choose an insurance company that gives you a good return on your single premium. Ask a few insurance companies to give you a quotation and compare the yield. You can get the telephone numbers of the insurance companies from this FAQ:
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05/25 - 06/01
- Will writing service
- Transfer of Shares to Family Members
- Uphold the cooperative values
- Higher risk profile of new bonus structure
- Asset shares
- Management expenses
- Disappointed at the outcome of Collective Protest
- Bonus for annuitants
- Debate with Nick Dumbreck about Terminal Bonus
- Restructuring of bonus
- NTUC Income - implementing the two objectives
- Collective Protest - Settlement
- Where Equitable Life Went Wrong
- NTUC Income is not like Equitable Life
- My replies to Straits Times and Today
- Terminal Bonus cut to nil
- My approach towards life insurance
- Poor return on maturity
- A better bonus philosophy
- An amicable solution
- Allow policyholders to choose
- View from Appointed Actuary (2002-2007)
- Life Annuity Vs CPF-Life
- Buy a life annuity with cash or CPF
- Dubious practices in respect of Terminal Bonus
- Collective Protest - set aside for the time being
- Risk of high terminal bonus
- Investing in unit trusts and shares
- Compassionate Fines
- Collective Protect - Action
- Duplicative coverage
- Logic9 (Sudoku)
- Bad experience with insurance advisers
- Questions on Life Annuity
- Seek a solution to the Bonus Restructure?
- Investing my savings
- Life insurance up to age 65
- Reversionary Bonus
- Save for a child's education
- Investing retirement savings
- Investing your savings - for the young
- Life insurance for a Malaysian
- Make hotline simpler for customers
- Exclusions under a medical insurance policy
- Option to stay with the old bonus structure
- MAS Notice 320
- New Benefit Illustration
- Indonesian newspaper writes about life insurance
- 2006 Earthquake at Jogja
- Jogjakarta, Indonesia
- Commodity Prices
- Forced to buy other insurance products
- Bad claim service
- Waiting for the time to buy a property
- Harrassed over an old case
- Collective Protest - Update 25 May 2007
- Prefer the old bonus distribution
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