Currently on Whole Life Manulife LifeReady Plus. Should I switch to Term AIA PWCC?

24 yo FNS, single, 3.2k/m salary.

I've bought Manulife's WL LifeReady Plus CI plan with ECI rider, 300k coverage. $251/m premium. Pay for 25 years - total 75k.

Wondering if I should switch to AIA's term PWCC plan. 130k coverage, $155.34/m premium. Pay till 75 - total 95k.

My current coverage of 300k seems a bit excessive, thus wondering if I should switch to PWCC 130k. I pay less monthly but more overall. Plan-wise, PWCC seems more comprehensive, and covers for relapse, which ML doesn't.

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Patricia Law

23 Jul 2020

Financial Services Consultant at AIA

Hi Danielle,

You should keep your Manulife's WL plan as this plan covers you for death, TPD and CI. It is good to consider AIA's PWCC to supplement your CI coverage from Manulife. The proposed 75 year plan is a value plan with no surrender value.

You may want to consider to buy the life plan (up to age 100), you will get 75% of value paid by the age of 75 if you were to surrender your policy. You can also opt for the Premium Waiver Riders in the event that you are diagnosed with CI, the premium is waived. You may want to round up the coverage to $100k instead of $130k, premium is $180/mth and if you add ECPWP $36.14/mth (this is before the first year discount of 15% and 10% for vitality members).

Hope the above clarifies.

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Nigel Tan

22 Jul 2020

Executive Senior Financial Planner at Great Eastern Life

$300k isn't excessive if you look at the longer term. no one has ever complained that they claimed "too much" for CI, only the other way around.

You'll have to account for the fact that inflation ultimately erodes 300k today away and will be less in the future. Your income, bonus and lifestyle also tends to increase in tandem over time which would also increase your needs for CI in the future. Also, your exepneses significantly increase when you are in poor health.

Both plans are inherently different. One is an accelerated pay multiplier and one is a multipay policy. They function differently and it is very difficult to compare.

one pays you $300k immediately while the other pays you if you have repeated CI which has to fulfill certain conditions (eg. 12 month no claims between different illness or 24 months no claims between same illnesses for specific conditions).

Personally, I am more inclined to receive the money up front one shot and manage it from there rather than depend on luck/ chance that thr multipay CI will Kick in everytime I need it and claim 3-5 times. Most of the time when it comes to CI, you'll only end up claiming once.

But ultimately, it still depends on which you prefer as not everyone may feel the same.

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