Insurance
For whom is the whole life insurance meant for?
By Bully The Bear  •  May 12, 2010
[caption id="attachment_1461" align="alignright" width="150" caption="Photo by -bast-"]Photo by -bast-[/caption] Just for whom is the whole life insurance meant for? I've heard a number of people saying that they don't want to buy whole life because when they get older, their dependents would have grown up and thus there's no need to cover them anymore. The alternative is thus the term life plan because it's cheaper. This seems to suggest that the whole life plan is just for the coverage of their dependents in case the sole breadwinner (the person insured whose life is insured by the whole life policy) passed away. My post here is to question that very assumption - that the whole life plan policy is to cover dependents in case you pass away prematurely, thus leaving them with a huge lump sum. I do not use the whole life for such purpose. There are cheaper alternatives for such lump sum gift for those loved ones you leave behind to take care of financial matters. I propose that a whole life plan can be used to protect your own savings that had been built up thus far, from events that can erode it considerably. Events such as cancer, stroke, heart attacks and any other events that are debilitating yet not fatal immediately. In this sense, whole life policy will act like compulsory savings to force you to save up for such events. Term plan can work the same, yes. But the catch is that term plan coverage only last around 60 yrs whereas whole life plan cover for an extended period till 100 yrs old. So what happens between the years when your term plan coverage ceases? I think whole life can be used precisely for that purpose - to cover for the period when your term plan no longer covers you, until the day you pass on. Read more...
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By Bully The Bear
La papillion is french for butterfly. This blog chronicles my journey from an amateur in the stock market to where I am today. Have I turned into a beautiful butterfly? I don't know, but I think my metamorphosis is still on-going now :)
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