Anonymous

23 Jun 2019

∙

Take up additional 50% premium offer or sign a shorter term plan?

I am applying for a new term plan covering for 30 years but was diagnosed recently with stomach ulcer. The insurance company wants to hike the premium by 50%. If my condition fully recovered in 5 years the company will remove the extra premium. Should I just take up the 50% extra premium offer or should I sign up a new term plan covering myself for the next 5 years since the premium will be significantly lower and reapply for a new term plan with a clean bill if health 5 years later?

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Hariz Arthur Maloy

23 Jun 2019

Independent Financial Advisor at Promiseland Independent

Take the loading offer and in fact, buy more cover.
Insurance premiums are priced on statistics and probability. The reason they asked you to pay 50% more is because you have a 50% higher chance than your peers to claim for the benefit you're trying to cover.

If you purchase a 5 year term policy and the conditioned worsened, you may be totally declined when you try to renew or reapply for another policy.
If you take the offer now and it worsens after 5 years, at least you still have coverage and you'd be thanful for making that wise decision 5 years ago. And if it really gets better, then awesome,you pay less premiums.

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