A term plan is an insurance policy that covers you in the event
of death. You may opt to include critical illness cover e.g. major
cancers, heart problems etc. at a premium. Usually the coverage for
a term plan starts from 100k up. This means that in the event that
something happens to you, the insurance company will pay out the
amount you are insured for.
The good thing about term plans is they are usually very cheap.
They cost less than $50 a month (dependent on age) and they cover a
very high sum (100k and up). They are therefore a very affordable
option if you decide you don't want to spend too much on insuance
but you want cheap cover.
The disadvantages? Term plans do not have cash value in them,
meaning if nothing happens to you, you don't get paid. They are
usually considered pay and forget plans, where you pay and forget
about the money. They also (usually) cover you until age 65-66,
depeding on insurance company.
Your NTUC life policy probably is an endowment policy. I would
need to see the details before i can tell you more, but as a good
gauge, if you're paying around $100 a month, there's a good chance
that you are covered for about $50k. Your NTUC plan would also
probably have cash value in it, meaning if you decide to terminate
the plan you would get some money back.
My ntuc policy is the whole life living policy. I am thinking of
surrendering the policy and buying a term plan instead.
