The “Family Charity” Policy
I just turned 24, finally graduated and started my first “real” adult job this year. You know the feeling—first few paychecks come in and you feel like a boss, until you realize CPF and bills are waiting to humble you. Then comes the real headache: my sister.
She’s a Financial Adviser (FA), and honestly? We are not close at all. If we see each other at the dinner table, it’s mostly just “pass the soya sauce” and that’s it. But because my mum is a single parent and very “traditional,” she gave me the “advice” (which we all know is actually an order) to support my sister and buy a life insurance policy from her. So now, every month, a chunk of my hard-earned salary disappears into this policy.
The Quarter-Life Crisis
I’ve been sitting at my desk lately just staring at the policy documents. Is there even any value in this? From what I understand, life insurance is basically “I die, someone else gets rich.” It’s a payout for death or Total Permanent Disability (TPD).
The logic is always: “Protect your dependents.” But hello? I’m 24. My “dependents” are just my GrabFood habit and my plants.
The “Self-Made” Goal
The thing is, I’m quite “on” about building my own wealth. My goal is to be 100% self-sufficient. I don’t want to be the kind of parent who treats their future kids like a retirement plan. If I’m already investing and saving aggressively to take care of my own old age, won’t this life insurance become totally meaningless?
If I have no one I’m desperate to leave a “pot of gold” for, am I just paying my sister’s commission for nothing? It feels like I’m hedging against a risk that doesn’t exist for me.
Netizens’ comments
- The term insurance that pays out on your death is more for the ones you’re leaving behind. If you die before retirement age, that could be a financial pressure on your dependants (e.g. if you have children, your spouse would have to support the children without your salary after your death, so the insurance payout would be to help them), and for disability, it’s basically in case anything happens to you before you’re able to earn enough money to retire. It’s a precaution because we never know what may happen to us.
- As a financial advisor, I also advise against buying whole life insurance… insurance is not meant for profit, it’s meant to replace lost potential income.
I would recommend you to just get term insurance which gives a lot higher coverage with lower premiums. Oh yes don’t forget hospital policy, this most important.