Which Plan Is Right To Buy?

Just as no two people are the same, no one insurance plan is right for every individual.

Really, which plan you choose or like depend on your personal needs.

In order to ascertain those needs, you need to assess your responsibilities, e.g. who your dependents are; are you the sole bread-winner. You'll also have to determine just what your resources are. Now, in the event of death who should be financially protected. How much income will be required to ensure that protection.

As a general guideline, when you have a young family, your insurance needs are generally at their highest. You may find that the best way to afford the amount of insurance you need is to buy a basic policy with quite a large term rider or a stand-alone Term policy.

On the other hand, if you wish to provide protection for your family while you are young, but at the same time would like to build a source of money for your use later, then you should be looking for appropriate plans that give you the return. You may want to look at a whole life or an endowment plan with its built-in savings programme.

There is another way i.e. you may buy a term plan that does not have builit-in savings and each year, invest the difference between the basic and the term premium in a savings account, government bond, or some other form of investments like an investment-link plan.

If you are the kind of person who can save regularly and keept it saved, you may build up an adequate sum of money for your retirement or for a specified purpose e.g. vacation or an education fund for your children.

However, few people are able to discipline themselves to save on a regular basis or resist using their savings for short-term needs. Instead, they prefer the semi-compulsion of saving through a basic life policy, especially when they can arrange for premiums to be deducted automatically from GIRO.

If you ask me, I would prefer to have a "Mix" of basic insurance and term riders to provide higher cover in the case of a contigency. One plan along would not be able to solve all your financial problems so to speak, bearing in mind that your needs change over time.