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Old 08-07-2020, 08:16 AM   #2468
BBCWatcher
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Join Date: Jun 2010
Posts: 12,853
For the point on consolidation of policies, can you elaborate more on that and how I should go about with it? I actually am toying with the idea of whether I still wanna keep policy #1 & #2.
Basically youíd look for one or a couple new term policies to replace what youíve got and add more sum assured, then cancel one or both of the policies you have. In that order, of course, so thereís no coverage gap. If it makes sense to do.

Why more than one new term policy (as a possibility)? Well, one reason is that itíd allow you to ratchet down coverage more easily, particularly as your mortgage is paid down on schedule. And there are a couple ways to do that. For example, you could get three S$400,000 policies (the maximum direct purchase allows) with staggered term ages of 55, 60, and 65. Other variations are possible, of course.

Of course the insurers donít like what Iím describing since the total premiums are lower, so some of them offer premium discounts if you buy a $1 million (or more) single policy. So you could certainly consider that and see if itís a good deal for you. Obviously youíre going to be more reluctant to cancel a larger, ďlumpyĒ policy, which is why the insurers encourage it with some premium discount at that level.

Also, I just found out that my husband also brought for me the Mindef Group Term Life and PA. These seem to be to be abit excessive.
Iím not a big fan of PA in general (especially not ahead of DII), but you could certainly take a look at whether the MINDEF/MHA group plan coverage could be raised for term life and whether their DII rider is available to you. The MINDEF/MHA insurance is generally good value for money, so if itís open to you, great. That particular DII policyís terms and conditions are not my favorite, but itís worth considering.

Also, for the Term Life policy, what do you recommend that I should be covered for? Was deciding btw $1.5M or $3M.
Covering the mortgage balance makes sense to me as a starting estimate because it means your surviving husband inherits the home free and clear OR he can sell it and use the life insurance proceeds in some other way to support the household, as he prefers. Bear in mind the outstanding mortgage naturally decreases over time as itís paid off at standard pace, and your children get that much closer to their own working careers and family lives, so your life insurance needs will ordinarily tend to diminish over time.

As for my kids, they are currently covered under PruShield & PruExtra. We think the premiums are abit too high and am looking for other options available in the market.
Ah, OK. Well, I donít like the idea of a preexisting condition reset, so one option is PRUshield Plus with its associated rider.
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