facebookI'm 54. I have 3 insurance plans. They are all old plans. Only 2 have CI. Should I buy a Whole life now with ECI? - Seedly

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Anonymous

14 Mar 2020

Insurance

I'm 54. I have 3 insurance plans. They are all old plans. Only 2 have CI. Should I buy a Whole life now with ECI?

I don't like term plans because there are no returns. I want to pay the premium for 10 years. Is Manuel life, China Taiping or Aviva better? Manuel life is about 6.1K (multiplier till 70), China Taiping is 6 K (multiplier till 85) and Aviva is 7K per year (multiplier till 80). Which is better and which company will provide greater returns?

Discussion (6)

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Pang Zhe Liang

29 Feb 2020

Senior Financial Services Consultant at AIA Singapore Private Limited

Back to Basics

Firstly, one of the most important things to do is to have a complete understanding of your existing insurance portfolio. Through this process, it allows us to understand the coverage that we have, any financial gap, as well as to find out whether we are overpaying for our insurance policies. I have highlighted the rest of the reasons here: https://www.blog.pzl.sg/why-every-client-needs-...

Healthcare

Next, ensure that you are properly insured for healthcare. The reason is simple - medical inflation hits 10% in 2019. Accordingly, a single medical treatment could potentially wipe out all your savings. Furthermore, a lot of cost associated with critical illness will be medical bills. Hence, it is fundamental to get yourself the right healthcare insurance.

Whole Life with Critical Illness Coverage

There are two things that we are looking at for your case, firstly, a whole life insurance coverage, and secondly an early critical illness coverage.

Getting the right Critical Illness Coverage

For the latter, you may wish to do a detailed read and evaluate whether you prefer to work with an insurance company that adopts a very strict or a broader definition for claim. While all insurance companies issue a payout so long as the contractual definition are met, some insurer adopts a broader definition. This is especially important for early critical illness and multi-claim (if such coverage applies).

For the most part, most of my clients prefer to focus on recovery rather than to battle with complicated terms for payout. Hence, this may be a point when you do your comparison over cost. On the whole, I have studied various insurance company's policy contracts for a number of years now and I am comfortable with the terms offered by AIA. Therefore, it may be a solution that you may be open to.

Getting the right Whole Life Insurance Policy

For whole life insurance coverage, it can be divided into two parts again - 1) insurance coverage, and 2) participating fund. Here is some information that you may find useful: https://www.blog.pzl.sg/what-is-a-participating...

For the participating fund, here is how it works: https://www.blog.pzl.sg/what-is-a-participating...

Reasonable returns for your money

In general, you may wish to consider a participating fund that has proven track records over the years with low expense ratio. This is to protect your interest especially with smoothing of bonuses. Furthermore, asset allocation is fundamentally important where we need to know how much risk that the fund is undertaking in order to achieve the same rate of return to the policyholders. While all these may not seem like it affects you directly, check out my post on participating fund where I explain why all these costs are related to policyholders indirectly.

So how?

On the whole, every insurance company has their strength and weakness in what they are perceived to provide for you and what they indeed provide for you. As a result, you should spend quality time to speak with specialists from different insurance compannies to find out what is best from their offer. These are the people who represent their clients at a company and are well-equiped on everything to know about their offer, especially from the policy contract terms.

This is the most important point as mentioned earlier, especially for critical illness coverage. You are going to be responsible for the decision you make today.

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Tan Li Xing

28 Feb 2020

Financial Consultant at Prudential Assurance Company (Singapore)

Hi Anon,

Would you consider alternatives? Also is the ROI on the policy crucial to you? Cause I think in terms of ROI, I believe Prudential is able to get you good returns. Would you like to see how the potential returns are?

Also in regards to what you already, do they have sufficient coverage? Cause I think it would be good have a review on your coverage since you mentioned that they are older generation policies

Elijah Lee

27 Feb 2020

Independent Financial Advisor at Phillip Securities (Jurong East)

Hi anon,

You can take a look at those 3 plans as they are the most competitive in terms of premiums...

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