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Insuring so that your dependents not able to pay huge financial burden can be cheaper than you realise
As a working adult aged 20-35, some of the hardest financial risks you are likely to face is:What if you are not around leaving your wife and kids to pay for the biggest financial burden, your mortgage.
One can argue that there are other big ticket credits that you can take up such as
- Student Loans
- Credit Card Loans
- Car Loans
But with home prices fluctuating around 400k, a single bread winner will be severely tested.
The solution known to many
The common solution, which is likely to be sold by most financial advisors you will meet is to take a whole life insurance.
The problem with that is to insure against a 300k mortgage payment, you will require a whole life plan of at least SGD 400 per month.
Folks who do not earn that much or have competing financial priorities will feel pressurized by that figure.
How can a decreasing term life insurance help?
A Decreasing Term Life insurance is a unique life insurance that provides a lump sum payment should the person is
hit with death, TPD and in certain cases Critical Illness.
You will need to
pay a fixed rate of premium payment for the limited duration that you and the insurer decide to insure against.
The unique thing about a decreasing term compare to a level term is that
the sum that you are insured for decreases over time.
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