Which life policies do I cancel to reduce my monthly expenses on insurance policies as I am currently unemployed for more than 6 months and intend to change new career path (expect steep paycut)? - Seedly
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Whole Life Insurance

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Anonymous

Asked on 09 Nov 2018

Which life policies do I cancel to reduce my monthly expenses on insurance policies as I am currently unemployed for more than 6 months and intend to change new career path (expect steep paycut)?

Vivolife whole life assured $45,000 n $100,000 term

Tokio marine Towards my legacy Plus $25,000 CI sum assured, $25,000 on dread disease accelerator rider

Vivo: $118

Tokio Marine: $82.

My other insurance polices are:

1) AIA glow of life with coverage $25,000 till 65yo

2) Aviva accident policy coverage $200,000 with medical expenses $4000

3) Aviva grp term life $500,000, PA $600,000 & living care $100,000

3) GE paysecure $2,500

4) hospitalisation plan GE supreme health and platinum select.

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Yixiong Chang
Yixiong Chang
Level 7. Grand Master
Answered on 09 Nov 2018

Hi, I urge u to contact me on my facebook as we'll need to do a more detailed analysis of your policies and understanding your financial situation. I'm not an insurance agent nor affiliated with any fa firm.

From what u have provided, there are several ways to go about it. Were u with SAF or MHA, or was it through your spouse that u purchase the Aviva Group plans. There are actually cheapest (so far i've seen) available in the market. You should keep them for now as they provide a huge cover for premium u are paying. The only issue i observed is that your critical illness coverage is very low. The group cI offers excellent affordable coverage per dollar now. but the problem with it is that it increases according to age band. It will cost much more when u go into your 50s and 60s. You can look to covert to a long term solution once u get a into your new career.

The AIA glow of life is something u can look to cut (after u increase your CI coverage elsewhere, like the Aviva group). $25k is really not much coverage. Such standalone product usually cost much more per dollar coverage u are getting if u had bought larger amount elsewhere.

Vivolife and TM legacy plus. I'll really need to look at what is your premium terms (how many years more to pay etc). Their death benefit and $50k combine CI benefit are also not much. You can easily increase your coverage with your term life. $4.10 per month per $100k life, CI will cost $9.90 per $100k (assume u are below 40). Whole life plan is mainly used as a legacy tool and it consist largely of savings. Term offers the best protection per dollar for your prime year (the period u need it most) and if cashflow is of a concern to u now.

I've need to read the T&C of the paysecure. I'm not sure if it provides cover since u are unemployed now, even if there are any claim when u are unemployed, typically such policies will provide a reduced benefit. Depending on your next career occupation class and its nature, it might not be necessary to take such insurance. It might be better to put the money into increasing your CI insurance.

Since u have the group PA, u might want to reduce the other aviva accident policy sum assured. The medical expenses can be useful in certain situation.

Hospitalisation plan is good and should not be cancelled or downgraded.

For details of my views and perspective, especially in area like critical illness, please do not hesitate to discuss further with me.

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Jim Ng
Jim Ng
Level 6. Master
Updated on 07 Jun 2019

In order to answer this question...

need to find out more information from you.

Who are your dependents? Or do you not have any dependents? Is your spouse working? Or not working? How many children do you have, how many of them rely on your income?

With all this amount of life insurance coverage, is there a chance you are overinsured?

Do you have an existing medical condition? If you were to cancel any of these policies, are you still able to buy anymore policies in the future?

You need to ask yourself all these questions first in order to determine how to strategise yourself to ensure you are not overinsured.

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Question Poster

12 Nov 2018

Hi, I have 2 children, and my spouse is working with take home pay of close to 4k. I'm healthy with no medical conditions.
Jim Ng
Jim Ng

12 Nov 2018

Okay, need a little more information. 1. How old are both of your children and your spouse? 2. What was your last drawn salary from the previous company you worked for? 3. Can you give a break down of all policies in terms of the following format: Name of Policy, Policy Start Date and Premium Frequency and Amount. Need the policy information in order to do the necessary calculations for you. If you feel uncomfortable releasing all these details publicly, Feel free to PM me at facebook.com/jimngweida
Loh Tat Tian
Loh Tat Tian
Level 8. Wizard
Updated on 13 Nov 2018

From the way you described, there are some overlapping coverage based

1) For Hospitalisation, You have GE supreme Health and Platinum Select (one of the value for money plans for now, should keep it).

2) Additionally, you had Aviva Accident policy coverage ($200,000) (with medical expenses, which should have been covered by (1) and Aviva group Term Accident ($600,000). You may wish to drop the accident coverage unless you view it as a hedge towards the term life (if you get TPD, since TPD require high expenses).

Ceveat: overrelying on Group insurance has some inherent risk (if claims are too high for that particular year).

3) CI protection from AIA glow of Life ($25,000), Aviva Living Care ($100,000), TM ($25,000). You are likely overpaying for administrative cost from so many policies. For Life insurance, its best to bundle with 1 policy instead (though this advice is for others). Its possible to drop TM Term life and add-on to Aviva Living Care (you pay less now for future increase in premiums). This is for cashflow and may possibly save you money (depending on how expensive the other CIs plans are).

(However, please check with the underwriter and also any changes in your medical condition, if not, you should not drop any or increase coverage).

4) Death benefit: VivoLife ($45,000 which can likely convert to retirement plan in future), TM ( Term $100,000) and Aviva Group Term insurance ($500,000). There is a possibility to drop TM poilicy totally and increase the Aviva Group Term Insurance to $600,000.

(However, please check with the underwriter and also any changes in your medical condition, if not, you should not drop any or increase coverage).

5) Paysecure from GE

This is likely a disability insurance policy. Most people protect their income with Life and CI, and seldom protect with paysecure (since it only pays out if you can't work, and any loss of job would require you to update your insurer).

As I seldom advocate disability income for low income-earners (since they can get another similar job or similar income), its hard for me to convince you not to drop it.

However, because I do not have your whole financial picture, this are just possibilities, and may or may not suit your needs because I am looking purely at cashflow now. You need to speak with an advisor to see if it makes sense, and to ensure that you do not have gaps in your protection needs.

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Brandan Chen
Brandan Chen, Financial Planner at Manulife Singapore
Level 7. Grand Master
Updated on 07 Jun 2019

You have a lot of policies. One way is to summarise the policies into a single spreadsheet so you know what kind of coverage you have, and what you really need for now.

No matter what happens, always keep your hospitalisation plan with GE.

As for the rest of the policies, it would be good to find out more about the current cash values and benefits before taking the step to cancel them. Perhaps you should first speak to your financial advisor for him/her to go through with you the various policies that you have!

As for us, it would really be tough for anyone of us to provide any form of advice without knowing the following:

  • Your Current Age

  • Your Dependents

  • Your Liabilities

  • Your current Financial Health

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Question Poster

12 Nov 2018

Hi, I have 2 children, and my spouse is working with take home pay of close to 4k. I'm healthy with no medical conditions.
Brandan Chen
Brandan Chen

12 Nov 2018

Hi, definitely require more information! What I can do for you is to provide you a summary of you and your family's policies. You can always drop me a PM on facebook at www.facebook.com/brandan.chen , or drop me an email at [email protected] . With that, we can then discuss if your coverage is sufficient, and whether there are alternatives available

So many insurance until i confuse. Do you really need so much different 1? Hospitalisation is a must to have. Keep 1 whole life/term see which 1 you prefer and depends on how much coverage you need. Critical illness also need 1. The rest honestly for me is see yourself liao. For me, this 3 good enough.

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ūüĎć 0

That's a lot of different policies.

You'll need to check your options on these policies.

It's never best to cancel, but if you can stop paying for a few months as part of the benefit, that would be a better option.

But its easier to cancel your term policies because they have no surrender value and if you're healthy, premiums wouldn't change that much or at all on a group term policy.

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