Singapore Whole Life Insurance
Whole Life Insurance
What is Whole Life Insurance
Sometimes called Straight Life Insurance, whole life gives you lifelong protection. Your premiums at the beginning are higher to help cover the costs of providing you that protection later in life when term premiums get costly. The company averages out the cost of giving you life insurance protection for your entire life, then overcharges you when you're young and undercharges you when you're older. Whole life policies build a cash value which you can borrow from the company or redeem by cashing in the policy.
Advantages of whole life include the tax-deferred interest you earn on your cash value (which becomes tax-free if you never take the cash value out of the policy). Loans on the cash value of the whole life are generally less than that charged for loans available elsewhere.
Regular premium payments must be made on whole life or the policy will lapse. Outstanding loans when you die will be subtracted from the amount paid to your beneficiaries. The interest rate credited to the cash value of the policy is usually far below what your funds could earn elsewhere. Cash value grows relatively slowly during the early years of the policy. This means that if you cash in a whole life policy after only five years, you get relatively little back for the relatively higher premiums you've paid.
Whole life is best if you have no self-discipline or tolerance for risk when you save or invest
