Friday, July 18, 2008

Buy critical illness for 20 years only

Hi, Mr Tan

I'm currently 34 years old (male). I am interested to obtain a $200k coverage in critical illness for life as I'm concerned about the rising medical costs as I grow older.

My financial adviser has advised me to buy LifeSecure (Limited pay plan) that requires me to pay 20 years' of premium. Thereafter, I need not pay anymore premium.

I would be grateful if you could advise if there are term plans in the market that would provide coverage for critical illness for life. And what is the premium like?


In my view, critical illness cover for a lifetime is very expensive and unnecessary. You should buy this cover for 20 years. If you save the remainder of the premium in a low cost investment fund, your accumulated savings can be more than the sum assured at the end of 20 years.

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Crazy Aries said...

your concerned about the rising medical costs as u grow older, therefore your advisor should recommend you a private shield plan instead of critical illness policy (either wholelife or term).

people take up critical illness coverage is to protect against loss of income instead of using the fund for treatment.

zhummmeng said...

If you take up a term CI of $200K the premium is about $1200 yearly.
If it is a limited premium whole life the premium is about $8000 yearly.
What a whopping difference!!! No wonder your agent is keen to sell you the limited premium whole life...
I bet that if you tell him or her that you can't afford the whole life premium they would advise you to buy lesser first and when you have the money buy the rest. This is the compromise they will make to your needs.This puts you in danger
of under insurance.
Any amount of WL you buy the agent makes a lot more money than you buy term.They don't care whether you have enough coverage so long they have enough commission.
That is what pisses me off about insurance salesmen and women. They are unethical and unscrupulous. They have no conscience at all.

Bee said...

The difference between term and WL is that at the end of it, if you are healthy and make no claim, term leaves u with $0 after paying $24,000 whilst for WL, most probably you take back what you have paid in last 20 years.
Still, take what you can afford, having partial term and partial WL might work for you. Get a good shield plan for medical bills coverage and critcal coverage is for lost of income (if necessary).

zhummmeng said...

If you have driven for 20 years do you ask your insurer to refund the all the premium becuase you didn't have an accident? Why? It is attitude problem, right?
Yes, you buy what you can afford but more importantly buy enough of it.
Why buy partially whole life and partially term? Is it because you want cash back? Do you know there is a better way than whole life? Maybe you don't know because your agent didn't want you to know and because the other way earns him or her less commission but GIVES you BETTER RETURN.
Cost and return have inverse relationship. So what do you expect from wholelife?
Also remember that you have OTHER NEEDS. Make sure your scarce or limited money is allocated properly and efficeintly so that ALL your NEEDS are addressed and not insurance only. Of course you won't be worth more dead than alive because whole life can never let you have more.Whole life is miserable when it comes to this.
I think the problem lies with the agents. Most if not all agents are NOT qualified when it comes to advisory; pushing and peddling high commission products they are SUPER DUPER.(by the way the word "duper'
also means a cheat and combined with 'super' together they mean excellent)If we decompose them they can mean excellent cheat.

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