Dear Fellow Automated Millionaires,
Straits Times on 13 March 2008, there was an article of people in Singapore is not getting enough coverage for life insurance. I fully agree with that. Initially, I want to change my life insurance policy from $100k whole life (limited premium 25yrs) to a $350k term plan & a $20k limited premium 25yrs whole life. However, after discussing with my Finance Coach, he suggested that I should have S$100K Whole Life (Limited Premium 25years) as a Critical Illness Coverage for old age (> age 65) and if I wanted any more cover, I should get a Level Term plan of S$250K until the age of 65.
Though Term Plan is highly recommended by finance guru David Bach & Suze Ozman (reasons see my previous posts) however, my finance coach asked what if i need to go for kidney dialaysis after 65 *touch wood* (my term is until 65)? Who is going to foot the costly dialaysis bill? And in addition to that, in the textbook for Health Insurance, it is stated in bold red that all people should have CI coverage even in old age... That set me thinking.
Hence, I have decided to leave my whole life limited premium (WL-LP) policy alone. Even though Whole Life protection is much lesser than Term Plan protection (WL $1 to $555 protection vs TP $1 to $2333 protection). So why Whole Life? To me, it is just instead of putting the money into normal bank with interest rate lesser than 1% to an insurance bank with a projected interest rate of 5.25%. This helps me to beat inflation slightly to make sure i get same amount of money protection even 30years later or more :) which is so critical to Wealth Protection in becoming Automated Millionaire.
Everyone (apart from kids) really do need Whole Life with CI rider. Strange as it may seems, at the same time, everyone die at some part of their lives. Hence, if u have gone through paying for a funeral, u would know how freaking expensive it is for a decent funeral, especially a chinese tradition one. The ancestor tablet & urn placing each costs $8k totalling $16k! This excludes the funeral costs. This immediately depleted my children's wealth by at least $30k. Hence, by having a whole life limited premium, i am able to cover for my own funeral expenses without affecting my children wealth.
Though Term Plan is highly recommended by finance guru David Bach & Suze Ozman (reasons see my previous posts) however, my finance coach asked what if i need to go for kidney dialaysis after 65 *touch wood* (my term is until 65)? Who is going to foot the costly dialaysis bill? And in addition to that, in the textbook for Health Insurance, it is stated in bold red that all people should have CI coverage even in old age... That set me thinking.
Hence, I have decided to leave my whole life limited premium (WL-LP) policy alone. Even though Whole Life protection is much lesser than Term Plan protection (WL $1 to $555 protection vs TP $1 to $2333 protection). So why Whole Life? To me, it is just instead of putting the money into normal bank with interest rate lesser than 1% to an insurance bank with a projected interest rate of 5.25%. This helps me to beat inflation slightly to make sure i get same amount of money protection even 30years later or more :) which is so critical to Wealth Protection in becoming Automated Millionaire.
Everyone (apart from kids) really do need Whole Life with CI rider. Strange as it may seems, at the same time, everyone die at some part of their lives. Hence, if u have gone through paying for a funeral, u would know how freaking expensive it is for a decent funeral, especially a chinese tradition one. The ancestor tablet & urn placing each costs $8k totalling $16k! This excludes the funeral costs. This immediately depleted my children's wealth by at least $30k. Hence, by having a whole life limited premium, i am able to cover for my own funeral expenses without affecting my children wealth.
Well of course if a person is facing budget constraints, he or she could be paying too much of insurance premium. I have a friend who paid S$6K per year for her insurance policies for only S$40K CI coverage! We did a restructuring on her Insurance Coverage and now she would only need to pay S$4K per year for her insurance policies! A SAVINGS of S$2K! Talk about no enough money for daily necessities and investment :) FYI, she now have S$350K of CI coverage.
Go Automated!
Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.
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