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Anonymous

19 Jun 2019

Insurance

What are the pros and cons of the MINDEF Aviva Insurance plan?

I am intending to insure my family with it, as it is cheap and covers most of the basic requirements. However I am just wondering are there any "Loopholes" to the policy that I should be aware of.

Discussion (2)

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Hariz Arthur Maloy

19 Jun 2019

Independent Financial Advisor at Promiseland Independent

Hey Anon, no 'loopholes' just limitations.

A few things, you don't own the policy. So that makes the following things be unavailable.

Nomination of beneficiaries. If you also don't have will, your insurance payout plus that money reaching the people who need it may take some time.

Next would be that you cannot pledge the insurance payout against your property. This means no option to opt of out Home Protection Scheme.
Policy details and T&Cs can change and you can't do much about it. This could be the case if Aviva is dropped and another insurer in the principal insurer for the group policy. This can also be for good because premiums can be cheaper as they did a few years ago.

Some of the riders aren't as good. Such as the Personal Accident rider and the Early CI rider (living care plus). They don't cover enough and are lacking in terms of benefits as compared to private policies.
I'd limit the total dependence on this group term policy to about 50% of your coverage needs.

Clarence Chua

19 Jun 2019

Financial Planning Specialist at Prudential Assurance Singapore

It’s definitely a good plan to have, so if there is a need. You can get it. But this should not replace your own personal insurance.

A few points to be aware of about the plan

The Mindef MHA group insurance covers death and rider is required for critical illness.

Also as it is a group policy, you do not own the policy, the Group owner (the government) owns it. This means they own the full rights towards the adjustment of the policy; including termination (though unlikely as of today)

Nominations are also not possible on this policy. Payouts will follow the intestate law of Singapore.

Aviva’s maximum liability for claims payout due to Terrorism and War are 0.75% of the Aggregate Assured.

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