Decreasing Term

Dear Mr . Tan,

I am 25 years old. Should I take a 40 year Decreasing Term or a 20 year policy and renew it at the end of 20 years?

REPLY

You should take a Decreasing Term for 40 years. It should cover the duration of your expected working career.

If you take a Decreasing Term for 20 years and wish to renew it at the end of 20 years, the renewal is subject to your health condition at that time. The premium will be based on your age at that time, and will be much higher.

This arrangement is not suitable, as the sum insured under the Decreasing Term will reduce during each period of 20 years.