A good to have policy to add to your protection cover at relatively cheap premiums but important to know its limitations…

As the word “term” implies, this is an insurance which provides cover for only a selected “term” or period of time. If you purchase a 10-year term insurance, you get protection only for ten years and it ceases or expires after ten years.

Term insurance can protect against death only, or death and total and permanent disability, or critical illness diagnosis also. You can also have renewable term that gives you the option to renew for a further term without medical underwriting. There is also a “convertible” option that gives you the option to convert the policy to an endowment or whole life policy within a certain period without medical underwriting.

From the financial planning viewpoint, a term insurance provides high protection and is affordable because it does not normally have a cash back feature. This is very ideal for those who need high protection with limited budget (e.g. parents with young children) and for loans and mortgages protection.

It is also favoured in partnership insurance and protection of keypersons (business owners).

Group term life is also a valued employee benefit. Term insurance is often added as an additional cover (rider) to a whole life policy

Read more : Demystifying Life Insurance

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