Insurance for parents

Dear Mr. Tan,

My parents are in the mid 50s. They do not have any insurance coverage other than a private Shield plan. They belong to the old school - they do not see the benefits on insurance when they were young and now that they are old, the premiums for people of their age are very high.

An agent quoted close to $200 per month for a $30,000 critical illness term coverage. This seems like quite a high amount to pay for such little coverage. Are these premium rates the norm?

They are both in good health now but I worry when they fall sick in future as they do not have much savings to fall back on. I am very keen to buy these plans on their behalf but I do not want to be paying excessive for such little coverage.

REPLY
They are already adequately covered for medical expenses under the Shield plan. There is no need to buy the critical illness coverage at this age.

It is better for you to put the savings into a low cost investment fund, and accumulate some savings for them to draw down during their old age. Read this FAQ:
http://www.tankinlian.com/faq/savings.html

The agent wants to earn a high commission from selling the critical illness coverage. This is not suitable for your parents, as their greater need is for an income during their retirement.