Limited payment plan

Mr Tan

Is there any need to buy a limited critical illness plan - which the premium is paid for 20 years only but protected for life.

The cost is quite high, as it includes guaranteed bonus. I am not able to buy a plan without the guaranteed bonus.

The agent told me to avoid buying i-term plan, as it does not have any return.

Please advise.

REPLY:

You should compare the following options:

1. critical illness plan to cover a lifetime, with premium payable for 20 years

2. 20 year term (including critical illness), invest the difference in a well diversified fund

You can read this FAQ.

At the end of 20 years, your accumulated savings (under option 2) should be more than sufficient to cover your financial needs (should you suffer a critical illness). You get a better return under this option, as the cost is low (compared to a limited payment plan).

You can talk to an insurance adviser or visit the business center.