My mum bought an insurance policy and I am the insured. If she dies before me, 1) will we get back all the premium paid plus interest or
2) will we get back the sum insured?
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Pang Zhe Liang
19 Dec 2019
Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)
Let's define some terms before we go through your questions:
Policy Owner: The person who buys and owns the policy.
Life Insured: The person who is covered under the policy.
Payor Benefit: Upon the occurrence of a covered event (e.g. death) to the policy owner, the premium for the policy will be waived till the life insured's 21st birthday (period of waiver depends on the policy contract).
If you are the policy owner and the life insured, then the sum insured will be paid out when a covered event occurs to you. Therefore, no payout upon the demise of your mother.
If your mother is the policy owner and you are the life insured and there is no payor benefit, then the policy will be transfered to the policy owner's estate and the coverage continues (i.e. no payout).
If your mother is the policy owner and you are the life insured and there is payor benefit, then the policy will be transferred to the policy owner's estate, the future premium will be waived till your 21st birthday (for example, depending on contractual terms), and the coverage continues (i.e. no payout).
To ensure clarity, it will be best to have a detailed understanding on the subject insurance policy. Additionally, you may wish to have a comprehensive insurance portfolio summary help you through this process. Here is why: https://www.blog.pzl.sg/why-every-client-needs-...
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Unfortunately it's a not for both your questions.
My parents bought me policies as well. Check your policy document and see if your parents have been paying a rider to waive the premiums upon their death (parents normally opt for this rider until their child is of working age)
The sum assured (and interest if any) only gets paid out if anything happens to you or if you choose to surrender the policy.
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Hariz Arthur Maloy
18 Dec 2019
Independent Financial Advisor at Promiseland Independent
Elijah answered it perfectly. Check if there's a payor waiver of any sort. You can also take over the policy and become the policy owner as well.
If you're also asking this because you're worried of your mom's insurance coverage, do consider doing up a policy review to see what both you and your mom is covered for.
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You are the insured. This means you need to die in order to get the sum insured.
For the first part...
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Depends on what kind of insurance policy you bought and the specific terms of that policy. Assuming you bought a term life plan, you wont get back any premiums paid, and may receive the sum insured if the conditions of the policy are met.