In the course of my work, I’ve met clients who claimed that term plans are better than whole life plans because they are ‘cheaper’. Indeed, on the surface the premium of a term plan is much lower than that of a whole life plan. However, when I did a comparison of a term plan versus a limited premium whole life plan, I discovered that there is a catch to it: the term plan is only cheaper for a LIMITED period of cover, and not for LONG TERM coverage (as shown in Table A).

To do a proper comparison, I have set certain constant variables: Read more…