Asked by Anonymous
Asked on 28 Aug 2019
I'm a 27 y/o M, non-smoker, working adult for 3 yrs.
My insurance policies:
1) AIA HSG Max B
2) AIA Guaranteed Protect Plus (Death, TPD 80K each, CI 50K) - 12 yrs limited pay whole life policy. 1.9k per yr
I bought the WL when I just started working. Now that I'm married I feel that my coverage is too little.
1) Drop AIA and take up Aviva MyProtector term with CI?
2) Keep AIA and take up Aviva term?
3) Take up Mindef GTL on top of either 1 or 2?
What are the pros and cons of each?
Top Contributor (Jan)
It'll be difficult (and a little illegal) to give you specific advice on your situation but there are a few rules of thumb you can follow.
1) Don't hastily surrender existing insurance plans. In this case, more often than not, you shouldn't be cancelling your existing AIA WL plan.
2) You should be covered for 10 X your annual income in the event of death, and 5 X your annual income in the event of Critical Illness. I would recommend a mix of this for temporary cover and a portion covered for Whole Of Life.
3) Sit with a trusted advisor to work this out. If you don't have any, I'd suggest looking for an Independent Financial Advisor that has access to multiple insurers in Singapore.
If you'd like someone to take a closer look and if you don't have an advisor you work with, I'd love to see if I can be of assistance. You can look through the profile and my replies on this platform to others who have similar questions as yourself. :)
Based on premium cost only,
You are still at a crossroad between Buy Term and invest the rest, and getting a whole life policy (but its a thin line to cross).
Buying a whole life now means you are buying a level term to 99 + savings plan. It will be quite tough on your finances, hence may not be suitable due to the high coverage required with marriage, house and children.
Getting a term from Mindef Aviva for both death, and CI coverage is good due to the lower premiums, escalating CI cost (but make sure you BTIR to reduce the future value of premiums to be paid to the living care). This requires your discipline to invest.
But be prepared for the non-guaranteed premium cost for death and CI.
I will always advise keeping the whole life because the IRR returns yearly is good. But if you really want to give up, I will gladly buy over the policy.