Don't get short changed when claiming your major illness benefits , Part 2

As discussed earlier, a Term (plus) and whole life plan is laid down for your consideration. After looking at the table,

Case 1, if it is just purely protection, Term is recommended. Low cost, high protection!

Case 2, if protection and cash value is your decision, whole life should be your choice. But you need to ‘hope and hope’ that nothing happens to you. Some of my clients queried ‘in recent articles where ‘every 2 hours, a Singaporean dies of Cancer’ which is quite an alarming rate, why should I pay more when ‘term plans’ is cheaper by comparison. Your financial planner CANNOT answer this question. Having being informed, you need to execute the plan base on your financial needs!

Major illness coverage			Age : 30				Non Smoker
Sum Assured: 300,000			Term Insurance				Whole Life insurance
Cancer			1,008.00				6,259
Total premium till age 65			35,270.00				212,818
Cash Value at 65 at 3.75%							284,411
Cash Value at 65 at 5.25%			Not a sigle cent				350,839
By taking the term option and investing the difference, your choices may be Even, if you are not investment savvy, you may look for a blue chip stock that pays a dividend of 5.25% per year on average. Is finding a stock that pays 5.25% dividend difficult?
Difference between Term and whole life premium					5,251.35
Invested annually at					5.25%
Until age 65, period is					35
Future value					$525,836.37
If you are investment savvy, you may potentially enhance your investment (thru unit trust) with a projected yield of 6% (or more?)
Invested annually at					6.00%
Until age 65, period is					35
Future value					$620,294.01

Case 3, If I am not investment savvy but would like protection as well as regular income (not cash value as in insurance); I would buy term and a blue chip stock that pays an average of 5.25% dividend annually. This case, you do not need to monitor the investment at all as your preference is regular income.

Case 4, If I need the protection and am investment savvy (or seek the assistance of a wealth consultant) I could invest in UNIT trust that may potentially return 6% yield.

Note: The projected cash values in case (2) (3) and (4).

In all of the above cases, upon diagnosis of a major illness and proof of diagnosis meets the major illness definition and provided that there is NO non disclosure of a material fact, then your major illness claim is admissible. I hope if any claim officers can confirm this statement because my insurance agent told me upon diagnosis; it is easy to claim (without mentioning the other two points!)

In conclusion, most of you are more enriched, now. In the light of being more knowledgeable, the decision is always yours! This discussion does NOT go into details on arriving for the shortfall needed for insurance.

On a separate note: Any blog reader would have saved S$ 300/- (provided they are more enriched by the sharing). How is this? While some IFA may charge $150 per hour with a minimum of two hours, your actual savings is actually a minimum of S$ 300. The objective of my blog is to educate the public in risk management and to assist you in coming to a wise decision. With that, I hope the public would have a different mindset for some of us. I assure that some of us are professional and sincere. My motto is “assisting you and your future generations to a financial peace of mind!