Planning for my first life insurance

I bought my life insurance when I was in my mid-twenties. It was pretty late, due to the fact that I finally starting earning enough to cover expenses for my fixed financial obligation, me, and a bit of extra for the insurance premium. Life sucks, I know. I did get myself a hospital plan when I was younger from Prudential and that was the only coverage I had for the longest time.

I met up with a few agents and none really actually vibed much with me. You could smell the desperation or see when they start to calculate their commissions whenever I tell them about my budget.

I decided to do a bunch of research by myself so that I knew what I wanted without their influence. These are the steps that I took into getting my first life insurance.

Step 1: Learn about insurance

I came across this term BTIR (Buy term, invest the rest) and I was really considering going for it. Basically, the two difference between a Whole Life Insurance vs Term Insurance is:

Whole Life InsuranceTerm Insurance
Pay $$ for a set amount of time to have coverage for the whole lifePay $ for the years you want to be covered
Have a cash component, so that when you die your kids will get the moneyHave no cash component, so if you die on the years you are not covered, your kids won’t get any money

The idea is that the money you saved in purchasing Term Insurance, like $200, you should invest them to grow your wealth.

Step 2: Find out how much I need

After talking to a bunch of people, I came up with an amount of how much I want to be covered, and at which stage of my life. I even did a Google sheet and wrote down a 50-year coverage plan.

An old image of the excel I did for my coverage. This has been changed since then.

Basically, I asked my friends how much were they being covered, I also wrote down the obligations my family needs and how much for an x amount of time. It also helped that I talked to a bunch of agents and I saw how they did the calculations.

Step 3: Find insurance plans that fit your needs

I used a lot of these insurance comparison sites such as CompareFirst or GoBear to see what are the plans out there. I went on multiple forums and finance blogs to learn what are their thoughts on the plans. I struggled really long before I decided to go for a hybrid of Whole life and Term life, for the reasons being,

(1) There is always something that is going to be better than now and I don’t want to be stuck paying for $x when the newer generation have a better deal.

(2) Paying premium means I would never get my money back1. It is basically for my kids. My kids will have access to my CPF funds when I die. I’m salty, I don’t have kids. I don’t feel the need to provide them with such a cushy life. If they want more money, they can pay for my 99-year term life plan until I die.

(3) In the event I get incapacitated or become dirt poor, and is unable to pay my term insurance, at least I have a fallback with my whole life insurance to protect my family and me. It would really suck if I’m 99 years old, and still have to pay term insurance if I became poor.

(4) I was not thinking about growing wealth at that time because I can’t afford to and I did not know where to start.

I will not talk about the specific plans that I bought because the post will not age well. I however found a plan that resonates with me, talked to my partner’s friend2 to purchase the plan for me.

I would add that if at that time, I had a little bit more budget, I would pay slightly more to go with my Prudential agent I met years ago because I felt that she was genuine at her job. I would pay more for her3.

  1. Unless I surrender my Whole Life []
  2. Whom I think only works with high value clients. Bless him for taking me on. []
  3. On my Google sheets that there is Prudential term life plan that I plan from her to buy at 40 years old []

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