Are there any way to reduce the amount / amend the frequency of payment for savings plan? - Seedly
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Anonymous

Asked on 04 Aug 2020

Are there any way to reduce the amount / amend the frequency of payment for savings plan?

Hi there, a couple of years ago I bought into the PruActive savers plan, and committed to put in $1k a month for 5 years. However recently, I realised that it would be a stretch for me to carry on with this, as it will severely limit my ability to buy a house/car.

Just wondering if there is an option for me to either reduce the committed amount to say $500/month? Or instead of $1k a month over 5 years, I put in $500/month over a longer term?

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Hi anon,

You can consider:

  • Reducing the sum assured (which will reduce your premiums) - take note that you will definitely suffer some losses

  • Re-sell the policy to an external party who can buy over such policies: this will free up your cash flow completely and probably yield a better amount that surrendering the policy, however you will definitely suffer losses.

Either way, you might want to do some maths to see which option is better for you if you really do not intend to service it at $1K/mth for the remaining tenure.

Personally, I feel that if your policy is just 5 years, it might be better to finish paying for it, since it seems that you are about halfway through. However, I understand that you are seeking to re-direct cashflow elsewhere, so you might have to see if deferring the car is possible (probably not the house though, if you had committed to buying it already)

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Most policies allow you to reduce the premiums.

But the impact could be the reversionary bonus will be taken up (and put into the policy), which incidently is the most important bonus as this will also affect the terminal bonus.

Do explore your other options, but best not to stop the insurance plan (or even sell it to others) as the financial impact is high.

However, should you really wish to stop servicing the policies, do speak to us. https://www.policywoke.com/sell-to-us

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Hi there,

Yes you are able to reduce the premiums of your said policy, however you will not be able to adjust the tenure of your policy.

However, do note that reducing your premiums will also change the projected amounts, which can be obtained via your PRUAccess portal. You will need to contact your advisor to effect this change. If you are currently not in contact with him, you may contact customer services for the form to effect the changes.

Do hope i was able to answer your queries!

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The premium amount and premium period is fixed at the start of the policy term. Therefore, you won't be able to change the amount or the tenure that you are supposed to commit to.

However, you may wish to speak with your agent to check and confirm whether you are allowed to reduce the sum assured for the policy. Accordingly, the premium will be reduced as well. Before you do that, ensure that you speak with your agent to fully understand the repurcussion of doing so.

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