Singapore Whole Life Insurance
Whole Life Insurance
What is Whole Life Insurance
Sometimes called Straight Life Insurance, whole life insurance plans provide you with 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 cash value which you can take a loan by pledging with your policy from the company or redeem by cashing in the policy. However do note that the outstanding loan amount will be deducted with interest from the payout should there be a claim.
Advantages of whole life generally include the tax-free interest you earn on your cash value. The interest charged on the loans on the cash value of the whole life policies are generally less than that charged for similar loans available elsewhere.
Regular premium payments must be made on whole life policy or the policy may lapse. Outstanding loans when you die will be subtracted from the amount paid to your beneficiaries. 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
