Weighing whole life Vs term life policies
- Figure out what you need – do you need protection for your dependents for life? Or just for the next 20 years? If you only need the insurance until your children are grown up, then you should go for a term life insurance as it’s cheaper than whole life insurance
- Figure out if you would like a savings element built into your plan – as mentioned earlier, the savings service offered by these plans are not free, so if you can find an alternative method to save, that would be better. You can go for a simple term life policy or a whole life policy with minimal cash payout and minimal investment features.
For example, instead of paying premiums of RM3000 a year on a sophisticated whole life policy, you can pay RM2000 instead for a more basic one and invest the remaining RM1000 on your own in EPF, which has been giving returns of more than 4% for many years! This will earn you more money in the end.