What You Didn't Know About Whole Life Policies

Starting a family and having dependents - as we assume more responsibilities at this life stage, we are likely to start considering options that can provide us and our families with the adequate protection required. This is because our loved ones are our utmost concern and we inevitably worry about their well-being and future should we meet with any mishaps. Additionally, we may also wish to leave a legacy behind for our family, hoping to ease any financial burdens and ensure that they are in a sound financial state. Therefore, a Whole Life policy may be suitable for your needs if protection and legacy building is what you are looking for.

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What is Whole Life Insurance?

Whole Life Insurance provides the life insured with life-long coverage thus allowing them a peace of mind knowing that they are protected for life. Unlike term insurance that only provides temporary coverage for your protection gap, Whole Life insurance is usually purchased for the intention of protection and legacy. Therefore, while it may be pricier than term insurance, this life coverage ensures that your worries and protection needs are taken care of.

Typically offered on a participating basis, Whole Life policies accumulate cash values with an accompanying non-guaranteed bonus embedded into the policy.

*List of riders stated is not exhaustive

(See "Your Must-Have Guide To Term Insurance")

For good health: LifeReady or TM Legacy Lifeflex

Rewarding you for good health - this is what LifeReady and Legacy Lifeflex offers to the life insured.

LifeReady, a Whole Life policy by ManuLife has a Health Advantage benefit that offers the life insured premium discounts for the first 2 policy years if he/she is certified to be in good health. Policy owners can then continue to enjoy premium discounts after the 2nd policy year if evidence of sustained good health is provided.

Alternatively, TM Legacy Lifeflex by Tokio Marine grants policy owners with lifetime wellness benefits of S$100 for every 2 years regardless of any prior claims. Meant to incentivise and encourage the life insured to stay healthy, this benefit is applicable for policies that have purchased an EarlyCare rider together with the basic policy.

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For additional advantages: VivoLife

VivoLife, the Whole Life policy offered by NTUC Income provides additional advantages to the life insured. This is done through the accidental death and retrenchment benefits that provide increased protection for the life insured. Should the life insured die of an accident no later than a year from the date of accident, he/she would receive a 200 per cent pay-out of the sum assured and the intended death benefit. Moreover, the retrenchment benefit gives the life insured the option of enjoying a six months premium waiver should he/she remain unemployed for three consecutive months. This is however, only applicable to policies that have been inforce for a minimum of six months.

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For assurance: LifeReady

LifeReady offers guaranteed insurability to the life insured at four different life stages: change in marital status, graduation from tertiary education, parenthood and the purchase of your first home. With no medical check-up required, the option of increasing your coverage at any one of these milestone stages is offered.

Additionally, the Early Critical Illness rider provides a full pay-out of the sum assured upon diagnosis of an early critical illness. This capped pay-out of $250,000 is currently the highest offered in the market thus giving you assurance of having adequate protection in the face of unforeseen circumstances. Moreover, your child would also receive complimentary coverage for advanced stage critical illness as an addition benefit under this rider.

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For Smokers: VivoLife

Smokers typically experience higher premium charges for life insurance policies with insurers likely to load them with extra charges. However, for the VivoLife policy, both smokers and non-smokers enjoy the same affordable premium rates. This thus offers an affordable option for smokers who are looking for life coverage. Also covering for death, terminal illness, diagnosis of dread diseases, total permanent disability (TPD) and accidental death, VivoLife provides a comprehensive coverage for the life insured.

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For the price conscious: LifeReady

If budget is of a concern for you, consider LifeReady's policies that are offered at a competitive rate. With its affordable prices, you can feel at ease knowing that you would be able to obtain your desired coverage.

However, as mentioned in our previous article "Why Cheapest Isn't The Best (Policy)", we explained that insurance coverage cannot be solely measured based on its prices. Instead, you should devise a budget that you are comfortable with and then work to finding a suitable policy that fits into your budget.

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For retirement considerations: Vivolife or TM Legacy Lifeflex

Do you want the best of both worlds? To obtain coverage for your protection needs while simultaneously planning for your retirement? If so, VivoLife or TM Legacy Lifeflex may be suitable policies to consider.

Granting policy owners the option of converting their Whole Life policy to an annuity plan, VivoLife allows you the opportunity to build up your retirement nest egg. This allows you to enjoy your required protection but also have the choice of converting it to an annuity plan should you wish to receive pay-outs in retirement.

Alternatively, Legacy Lifeflex pays out a lifetime income from the age of 65 thus providing you with an income for your retirement years.

(See "5 Amazing Countries You Can (Almost...) Retire With Your CPF")

How FSMOne can help you get on track

Our team of friendly advisers are able to help you review your financial objectives, long term commitments, and offer you investment and insurance advice specific to your needs. If you would like assistance in reviewing your financial and protection portfolio, or simply to get a quote for an insurance plan, you can contact our advisers at advisory@fundsupermart.com.

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