I again have to emphasize that I’m not comparing a “Buy Term Invest the Difference” Vs “Buy Whole Life Plan” argument. Getting into such arguments will waste me a lot of time where I rather spend to serve my clients and expand my business. Writing this blog is to feed my interest in writing about Financial Planning issues and my opinion of the industry and not to generate businesses or to engage in time wasting arguments. (A mistake that I committed in my old website).
Whole life cover is not for all
In my opinion, it is necessary for some and not necessary for some. Let us look into our basic Medical Insurance needs first.
1) Hospital and Surgical – Urgent and Important
2) Critical Illnesses Coverage (Temporary needs) – Urgent and Important
3) Whole Life CI Coverage (Permanent needs) – Not Urgent but Important
For people who can confidently self-insured their Permanent needs need not get a Whole Life plan.
We must know what our priorities are first. There are many agents or FAs who will try shift priorities of their prospects. They will try to make the temporary needs to become permanent in order to justify a higher WL coverage. I will not say that there is anything wrong with this but provided that the adviser had did a good job by recommending after analysing the propects other Financial needs such as Retirement, Children Education, short/mid/long term goals, investment profile based on experience, willingness, ability, etc and have informed the client fully on their options and client insisted on his recommendation.
I like to share 2 common practices. Read more…