Asked by Anonymous
Asked on 28 May 2019
Want to review my current plans for insurance coverage.
1) GE 4 X Multiplier (60k SA, 4 X Multiplier until 70 Years old)
Premium 2.7k p.a for 20 years
2) AIA Critical Cover (50K SA, able to claim 3 times, with 12 months apart)
3) GE Supreme Health and Total Health
I plan to change the Life plan to a term plan (coverage till 100 years old)
Should I keep my AIA Critical Cover or have a CI rider with the new term plan?
Open to suggestions!
Thanks in advance! :)
Top Contributor (Nov)
A Term to 100 with CI will cost more than your WL plan. This new post comes in handy. https://www.sgbudgetbabe.com/2019/05/critical-illness-coverage-are-term-or.html?m=1&fbclid=IwAR05UKddYPb9USfNp0m53yLyKRFzc4w_v4Qyq-QAIWxzAEKq-KUX6AgaKZ4
AIA Critical Cover covers ECI as well and is yours till 75 or 100?
See all 3 comments
29 May 2019
29 May 2019
Hi there, just to summarise your current coverage is as follows:
death, tpd, ti, ci = $240k + $50k = $290k
hospital plan with rider (you'll be keeping this I presume)
1) whole life plan is cheaper than term plan coverage until 100yo (you can add up the total premiums payable for both plans to confirm this)
2) is $290k coverage enough? Say in the event of death, if your family needs $2k monthly expenses, $290k can sustain them for 12 years. In the event of critical illness, your GE plan covers your hospital bills, but you can't work and maybe need to hire caregiver. So maybe you'll need about $1.5k monthly. $290k can last you for about 16 years (some CI like Alzheimer's will take this long).
So personally I feel that giving up a whole life plan to take a term plan covering until 100yo doesn't make sense. But if $290k coverage isn't enough, can consider taking a term plan for 20years (like for extra family expenses when children are young). This add on is cheaper than adding on a whole life plan.
Why would you want to surrender your life plan?
Early surrender of it will cause hefty charges and also at the same time a life plan can be a core instrument in your overall portfolio. These funds are generating returns and providing coverage at the same time. If you hold it long enough, the returns might break even and allow you to to have "free coverage" through out those years.
I do have a life plan myself and this is a plan that will follow me for life till I do not need the coverage. I top up the remaining shortfall in coverage with a term for a shorter tenor.