AIA US$ G15 - Worth it?

[maladalaxx]

Omg. Thank you so much. It had been converted to ETL.
Agent says I can go for (1), (2) if I want within a stipulated time frame.

If that's the case, which one will u recommend?

1. On policy loan ...means you need to repay the loan as well with interest. Probably 6% or more.
2. Noted its for only 1 child. It's very expensive (compared to other insurer) considering the entry age and coverage.
3. By right, you should have ample $ before you buy any whole life policy and in buying whole life policy, the intention is really for whole life protection rather than surrender value.

For your case, you might/should check with AIA on what options is available for you.
a) Repay your policy loan and continue with the policy.
b) Terminate the policy and just get the surrender value.
c) Convert the policy into ETL (Extended Term Life) if there's such an option - basically it just means that the policy becomes a term policy providing the same coverage for a certain number of years. You do not need to pay any more premium and you do not get back anything at all.
d) Convert the policy into RPU (Reduced Paid Up) if there's such an option - basically the policy becomes a non-par plan and coverage continues at a reduce sum assured - you do not have to pay anymore.

My old AIA policies have these ETL/RPU features.

Whole life policies typically dont have maturity dates, except a couple which will end at 99 or 100 years old, where the projected surrender value and projected protection value will converge.

The so-call maturity that you mention is the day where the projected surrender value will breakeven with the cumulative premium paid to date. That's not the policy "maturity" (date).

 

[havetheveryfun]

Omg. Thank you so much. It had been converted to ETL.
Agent says I can go for (1), (2) if I want within a stipulated time frame.

If that's the case, which one will u recommend?

believe most people will just recommend to finish paying up the last 5 years (around 15k in total) ?

if u give up now, u only get back 3k anyway, and save on 15k.... it depends on your finances whether you really need this 18k ?

 

[soneat]

Without knowing your exact finances and situation, please treat this post as some pointers rather than a recommendation.

1. What's your exact intention? You can't afford to upkeep the policy OR you need the cash.
a) If you need cash, then I guess you have no other option except to surrender the policy.
b) If you don't need the cash, but don't want to continue to pay or hope to pay lesser, consider this:
i) Does this policy have any payable riders? Consider stripping them off as riders don't contribute to policy values.
ii) Do you wish to provide a lifetime coverage (but lowered) for your child? If so, RPU is more suitable.
iii) Do you wish to provide the same coverage (but for a pre-defined period, not whole life) for your child? If so, ETL is more suitable.

2. You also need to understand there isn't really a "maturity" for whole life policies except for whole life policies with coverage ending at 99/100 years old.

3. You also need to understand whole life par plans are all based on projections. AIA has been known to chop the projections (even though their par plans are performing relatively better than others).

You also mentioned you are having a hard time. Which Aviva Shield plan are you on and did you take any rider? Aviva is not exactly affordable and you have to evaluate if you can afford the premium. I heard Aviva no longer offer Free Coverage for children, so you better take note.

 

[mosmos]

USD? If you are in singapore, It would be a burden if the USD goes much higher in the future, would prefer local currency

 

[koreanlover]

USD? If you are in singapore, It would be a burden if the USD goes much higher in the future, would prefer local currency

Yes SGD would be better.

 

[Starbelle]

Another point is that, you have 3 kids and the burden is probably going to be kind of big, and assuming that both the income is good, maybe you would opt for something else since the risk involved seems higher.

 

[cscs3]

1. You purchased a limited pay (10 years) for your child/children (and not yourself right?) and you are already 1/2 way there. To give up now is pretty wasteful. As such, you should try to continue if you finances / cashflow permits.
2. 3080 per year for 10 years for 3 children or just for one of the child? If its for 3 children, it seems too cheap. If its for 1 child, its awfully expensive (compared to other insurer).
3. Unfortunately, AIA is the most expensive (or one of the most expensive), projected breakeven is always >20 years.

Completely agreed with your item 3. I would not choose AIA whenever it is insurance related.

 

[soneat]

Hi all,

Many thanks for the advice.

Because I had three kids, every single cents count and thus planning for long term wise, I find that this might not suits my lifestyle (way taxing on the premiums and AIA tends to be expensive), I bought this plan when I am not so financial literate and the agent who happened to be a friend, sold this plan with the amount I guess being misrepresented to an extend. So I was thinking if this was really suitable for me as I still need to pay the remaining five years that amounts to 15k whereas;

The amount can be better use in my opinion but I already paid for the first 5 years (15k) thus it's a dilemma or rather financial wise to forgo the whole plan.
2. If I surrender the plan now, I get back 3k+ and I just spend 12k as a failed investment and perhaps an expensive lesson.(My girl is 7 and this plan was on policy loan for 2 years because I totally forgot about it and NO ONE service me despite the insane change of agents). The current agent was a friend of my Sis-in-Law.

IMHO,

1. An insurance policy is a contract between the policyholder and the insurance company. At the end of the day, responsibilities and liabilities is between these 2 entities.

2. I have many whole life and term policies from many insurance companies. The only ones I truly regretted are the ones from AIA. Based on what I know:
i) RPU - Although you don't have to pay premium anymore, take note that the reduced sum assured will be significantly lesser. AIA is not that "generous".
ii) ETL - I believe what it does is to take the surrender value and buy term insurance for you. AIA is very expensive.

3. Again, you need to ask yourself the same question - What is your intention?
Do you need the cash now OR are you trying to prevent putting more $ into the policy?
You mentioned the money can be put to better use - what's ur exact intention or idea of "better" use?
For example, if you think that by surrendering the policy and putting the money (with or without DCA) into ETF is way better, things are not so simplistic. It seems like you have limited cash reserves - all the more you need to be prudent and careful.

 

[mosmos]

Yes SGD would be better.

If in Singapore, I am not sure why the insurance agent want sell insurance in USD

 

[soneat]

By the way, TS, you got to be clear what exactly you have bought and what exactly is your intention. If I am not mistaken:
i) The plan you bought is the 10 year version and is in S$.
ii) The plan you bought probably have a number of riders - what are those, how much do they cost and do you even need them?

I happen to have the BIs for these plans. Back in 2008 when AIA was selling these S$ (projected at 5.25%) and US$ plans (projected at 5.75%), the US$ plans have a far better BI which shows relatively short "break-even" point. E.g. US$ 15-year limited pay plan will break-even in less than 15 years.

 

[maladalaxx]

Hihi, yup it's in SGD.


To the rest, thank you so much for the advice and yup I was thinking to just surrender the policy because it's not enticing and the ethics of the AIA agents had proven otherwise. The 3k can be better put to use than to put into this.

By the way, TS, you got to be clear what exactly you have bought and what exactly is your intention. If I am not mistaken:
i) The plan you bought is the 10 year version and is in S$.
ii) The plan you bought probably have a number of riders - what are those, how much do they cost and do you even need them?

I happen to have the BIs for these plans. Back in 2008 when AIA was selling these S$ (projected at 5.25%) and US$ plans (projected at 5.75%), the US$ plans have a far better BI which shows relatively short "break-even" point. E.g. US$ 15-year limited pay plan will break-even in less than 15 years.