Advice Needed: Change insurer for life policy

[blurpandasg2014]

Hi

I am enquiring on behalf of a friend.

Currently, she has 100k tm legacy with ci (15yrs), 100k tm lifeflex with eci (15yrs)- Both jus bought last yr

and another life plan 100k pay for life which she had since young - already broken even if surrender

Her agent advised her that by converting to axa life extential prime, she could potentially save 3k/yr and get similar cover . Any advice if she shld switch or jus stay with her policy

 

[life_is_great]

Hi

I am enquiring on behalf of a friend.

Currently, she has 100k tm legacy with ci (15yrs), 100k tm lifeflex with eci (15yrs)- Both jus bought last yr

and another life plan 100k pay for life which she had since young - already broken even if surrender

Her agent advised her that by converting to axa life extential prime, she could potentially save 3k/yr and get similar cover . Any advice if she shld switch or jus stay with her policy

The 2 TM life plans, total i think should have around 300-500K coverage after multiplier?

Anyway, when you say convert means cancel all 3 and get the AXA essential prime?

 

[FP_IFA]

Hi

I am enquiring on behalf of a friend.

Currently, she has 100k tm legacy with ci (15yrs), 100k tm lifeflex with eci (15yrs)- Both jus bought last yr

and another life plan 100k pay for life which she had since young - already broken even if surrender

Her agent advised her that by converting to axa life extential prime, she could potentially save 3k/yr and get similar cover . Any advice if she shld switch or jus stay with her policy

First of all TM Legacy is a traditional whole life plan with no multiplier component whereas AXA Life Exential Prime is a whole life plan making up of a term and a smaller base cover. If your friend want to drop the TM plans, she needs to know that:
1. The AXA plan has a much lower cash value throughout as compared to the TM plans. TM legacy cash value alone is more than the AXA plan and I am not adding the other plan yet.
2. The TM Legacy death cover increases as she goes older whereas the AXA stays level till age 70 and then drop.
2. The AXA plan will has a much lower cover after age 70 because the multiplier disappear.

Did the agent tell her all these?

 

[Mecisteus]

Insurers will get cleverer and smarter as the years go by. New and "better" plans will emerge. Is she going to continue switching?

 

[blurpandasg2014]

The 2 TM life plans, total i think should have around 300-500K coverage after multiplier?

Anyway, when you say convert means cancel all 3 and get the AXA essential prime?

The TM plan both no multiplier.

Yup the agent ask her to cancel all 3 and just get the axa. The one bought long ago will break even while those TM bought 1yr ago will lose the first yr premiums

 

[blurpandasg2014]

First of all TM Legacy is a traditional whole life plan with no multiplier component whereas AXA Life Exential Prime is a whole life plan making up of a term and a smaller base cover. If your friend want to drop the TM plans, she needs to know that:
1. The AXA plan has a much lower cash value throughout as compared to the TM plans. TM legacy cash value alone is more than the AXA plan and I am not adding the other plan yet.
2. The TM Legacy death cover increases as she goes older whereas the AXA stays level till age 70 and then drop.
2. The AXA plan will has a much lower cover after age 70 because the multiplier disappear.

Did the agent tell her all these?

She told me that the agent mentioned the structure of the AXA multiplier and how it works. His focus was that AXA covered a much higher ECI coverage than the TM LifeFlex and assuming that the coverage drops after 70, worst case scenario will cover abt 150k or so.

Insurers will get cleverer and smarter as the years go by. New and "better" plans will emerge. Is she going to continue switching?

That i am not sure, however, if given this scenario where she will only stand to lose the first yr of her TM premiums, isit advisable?

 

[Shion]

Not taking into account the differences in benefits, coverage or whatever --> One should avoid cancelling an existing plan based on an agent and buy a product from that particular agent.

For a start, why did she buy 2 whole life from TM ? Either get TM legacy or TM legacy lifeflex will do.

TM legacy lifeflex has a booster option and also includes CI and ECI components, in the form of riders.

 

[blurpandasg2014]

Not taking into account the differences in benefits, coverage or whatever --> One should avoid cancelling an existing plan based on an agent and buy a product from that particular agent.

For a start, why did she buy 2 whole life from TM ? Either get TM legacy or TM legacy lifeflex will do.

TM legacy lifeflex has a booster option and also includes CI and ECI components, in the form of riders.

Main reason is that the new lifeflex is based on dividend that are non guaranteed and there is no way to check until u surrender. Unlike the legacy, it still is based on reversionary bonus which is guaranteed once declared. So eggs are not placed into a single basket

 

[Shion]

Main reason is that the new lifeflex is based on dividend that are non guaranteed and there is no way to check until u surrender. Unlike the legacy, it still is based on reversionary bonus which is guaranteed once declared. So eggs are not placed into a single basket

This sounds more like buying whole life for investing/saving and not for protection.

To me, the eggs are still placed in the same basket because the nature of the item is the same - whole life

And end up you are paying more for 2 policies when you can cut your payment costs if it were to be just 1 policy.

Anyway I will still say - one should avoid cancelling and buy from the person who ask you to cancel

 

[wts2013]

Just use this "basic financial management knowledge" when managing whole life policies u own:

Buying insurance policies is a long term commitment. Make sure u can continue to afford to pay the premiums till maturity. Whole life policies have surrender values so u dun cut loss by early termination, there is no loss at all. There are back doors to maintain your policies if u have financial difficulties paying the premium in the short or long term if u meet the tnc.

If u need more coverage, just buy another whole life policy or term (not my cup of tea). Just add if u can afford to pay and need the coverage.

So do not cancel, even if u lose just 1 year's premium. I will not do this cos the policy is still useful and has value. Unless u cannot afford to pay.

If it is a term or ILP type of policy, the way I will handle will be different cos this is really cutting loss!

Just sharing my way of managing insurance policies

(check to make sure it is really a whole life policy, I posted the key features/benefits in another thread, u need to search for it. Hope people here can differentiate )

 

[Asphodeli]

Check if your friend really needs $300k in whole life coverage and how much is she paying in total. Also check if the plan is limited pay or until age of 65/70/75/etc., and does it pay out money before the maturity in the form of cash or cash rebate on premium.

 

[Mecisteus]

That i am not sure, however, if given this scenario where she will only stand to lose the first yr of her TM premiums, isit advisable?

Quite difficult to give you an advice without looking at the BI.

In the past, TM has been generous in dishing out bonuses and their guaranteed values are generally higher. No free lunch in this world. You will end up paying higher premiums too.

 

[viberzdae]

Im kinda in the same situation. A tm agent asked me to cancel my prulife policies and buy theirs. Saying their one is cheaper.

- $500,000 for Death, Total and Permanent Disability and Terminal Illness
- $100,000 for Earlycare (all stages)
- Annual Lifetime dividend of $500 from age 65 onwards
- Wellness benefit of $100 every 2 years from 2nd policy anniversary onwards
- Limited Pay for 25 years

$2775/year

Is this even good?

As for my current plan
Limited Pay Whole Life ( after Multiplier effect ) plan plus DPS plan :
- Death / TPD Benefit is $265K + $50K = $315K
- Major Illness Benefit is $240K

Im paying like $3600/year.

Im into my 3rd year of the policy. Should i switch?

Advice needed.

 

[blurpandasg2014]

Im kinda in the same situation. A tm agent asked me to cancel my prulife policies and buy theirs. Saying their one is cheaper.

- $500,000 for Death, Total and Permanent Disability and Terminal Illness
- $100,000 for Earlycare (all stages)
- Annual Lifetime dividend of $500 from age 65 onwards
- Wellness benefit of $100 every 2 years from 2nd policy anniversary onwards
- Limited Pay for 25 years

$2775/year

Is this even good?

As for my current plan
Limited Pay Whole Life ( after Multiplier effect ) plan plus DPS plan :
- Death / TPD Benefit is $265K + $50K = $315K
- Major Illness Benefit is $240K

Im paying like $3600/year.

Im into my 3rd year of the policy. Should i switch?

Advice needed.

Both policies cover different stuff and TM the CI coverage is much lower.
U shld ask him to quote u similar coverage or similar premiums to do a comparison

 

[kehyi4]

LIA's Statement on Churning of life insurance policies

The LIA does not condone the churning of life insurance policies, which is unprofessional and against the interests of policyholders.

Churning is the practice of an insurance intermediary advising the policyholder to generate funds from existing policies to finance part or all of the premiums for a new policy in order to earn more commission.

The Association has a clear set of guidance notes for member companies to use in monitoring and detecting the practice of churning.

Some examples of churning provided in the guidance notes include:

• Terminating a policy within a short period of time or before its maturity date and buying a new policy soon after.
• Terminating a cash policy and buying a similar CPFIS policy, or vice versa, when a change of payment source or conversion could have been exercised.
• Withdrawing from old funds or plans and buying into new funds or plans without using the facility available in the policy for switching of funds where commissions are not payable.
• Generating funds in order to buy a new policy, by:

- exercising various methods of withdrawing monies from an existing policy, including making partial surrender, withdrawing from investment-linked policy, taking policy loan, cashing out reversionary bonus; or

- exercising various methods of reducing or ceasing an existing regular premium commitment, including advance premium loan, vanishing premium, reduction of sum insured, conversion of the existing regular premium policy to paid-up policy or extended term insurance.

Examples of how such funds may be generated include the use of the following types of mechanisms:

- Policy termination
- Partial withdrawal
- Advance/Automatic premium loan
- Policy loan
- Premium holiday
- Surrender of bonus
- Reductions in premiums

 

[Shion]

Rogue agents

 

[Shion]

Im kinda in the same situation. A tm agent asked me to cancel my prulife policies and buy theirs. Saying their one is cheaper.

- $500,000 for Death, Total and Permanent Disability and Terminal Illness
- $100,000 for Earlycare (all stages)
- Annual Lifetime dividend of $500 from age 65 onwards
- Wellness benefit of $100 every 2 years from 2nd policy anniversary onwards
- Limited Pay for 25 years

$2775/year

Is this even good?

As for my current plan
Limited Pay Whole Life ( after Multiplier effect ) plan plus DPS plan :
- Death / TPD Benefit is $265K + $50K = $315K
- Major Illness Benefit is $240K

Im paying like $3600/year.

Im into my 3rd year of the policy. Should i switch?

Advice needed.

Different coverage level. TM legacy has CI rider while TM lifeflex have both CI and ECI. And while TM cash value is higher, I dont think this should be the main portion to be considered.

EarlyCare is a separate CI plan, not very sure how long are you supposed to pay for it. But, the agent quoted 500k for death and 100k for CI. Thats abit weird. Supposedly the agent quoted the same amt 500k for EarlyCare, I believe it will be more expensive then your current Prudential plan.

My experience -- One should avoid cancelling an existing plan based on an agent and buy a product from that particular agent.

 

[wts2013]

Im kinda in the same situation. A tm agent asked me to cancel my prulife policies and buy theirs. Saying their one is cheaper.

- $500,000 for Death, Total and Permanent Disability and Terminal Illness
- $100,000 for Earlycare (all stages)
- Annual Lifetime dividend of $500 from age 65 onwards
- Wellness benefit of $100 every 2 years from 2nd policy anniversary onwards
- Limited Pay for 25 years

$2775/year

Is this even good?

As for my current plan
Limited Pay Whole Life ( after Multiplier effect ) plan plus DPS plan :
- Death / TPD Benefit is $265K + $50K = $315K
- Major Illness Benefit is $240K

Im paying like $3600/year.

Im into my 3rd year of the policy. Should i switch?

Advice needed.

I only own whole life policies. I believe whole life policies with multiplier effect is creative marketing by insurers, first time I hear it here cos I already close "insurance protection portfolio buying" ages ago.

Let me set some common understanding about insurance policy definitions first, for this discussion to be more fruitful:

1.Whole Life policy = Protection + Savings
2.Endowment = Less Protection + More Savings (as compared to 1)
3.Term = Protection
4.ILP = Term + Investment
5.Whole Life with multiplier = Whole Life + Term

** For type 5, is the premium cheaper or more expensive as compared to buying a whole life policy plus Term policy for the same coverage as Whole life with multiplier? What other benefits are there?

Your prudential policies looks like is type 5 above. So I guess premium would definitely be more expensive as compared to the new proposal.

Not sure your age, if u are just at beginning of your career, your salary, etc. Is 3600 per year to much that u can afford to continue to service the policy?

If u terminate now, how much can u get back in terms of surrender value? If u terminate now, u are somehow cutting loss cos there is a Term component in the policy. If u compare and find the new proposal offers much better benefits, such that u can better afford to pay long term, u could recover your loss somewhat in the future due to the better surrender values and coverage, etc? Just some pointers for consideration.

Most important, I'm looking at the Term component, but u have to answer the question above **

 

[viberzdae]

Different coverage level. TM legacy has CI rider while TM lifeflex have both CI and ECI. And while TM cash value is higher, I dont think this should be the main portion to be considered.

EarlyCare is a separate CI plan, not very sure how long are you supposed to pay for it. But, the agent quoted 500k for death and 100k for CI. Thats abit weird. Supposedly the agent quoted the same amt 500k for EarlyCare, I believe it will be more expensive then your current Prudential plan.

My experience -- One should avoid cancelling an existing plan based on an agent and buy a product from that particular agent.

Actually i m nit covered under early care in prudential. Only stage 3 and above.

So im really in dilemma.

 

[viberzdae]

I only own whole life policies. I believe whole life policies with multiplier effect is creative marketing by insurers, first time I hear it here cos I already close "insurance protection portfolio buying" ages ago.

Let me set some common understanding about insurance policy definitions first, for this discussion to be more fruitful:

1.Whole Life policy = Protection + Savings
2.Endowment = Less Protection + More Savings (as compared to 1)
3.Term = Protection
4.ILP = Term + Investment
5.Whole Life with multiplier = Whole Life + Term

** For type 5, is the premium cheaper or more expensive as compared to buying a whole life policy plus Term policy for the same coverage as Whole life with multiplier? What other benefits are there?

Your prudential policies looks like is type 5 above. So I guess premium would definitely be more expensive as compared to the new proposal.

Not sure your age, if u are just at beginning of your career, your salary, etc. Is 3600 per year to much that u can afford to continue to service the policy?

If u terminate now, how much can u get back in terms of surrender value? If u terminate now, u are somehow cutting loss cos there is a Term component in the policy. If u compare and find the new proposal offers much better benefits, such that u can better afford to pay long term, u could recover your loss somewhat in the future due to the better surrender values and coverage, etc? Just some pointers for consideration.

Most important, I'm looking at the Term component, but u have to answer the question above **

Thanks for the advise... Kinda too chim for me to understand. Anyway i can afford the $3600/yr insurance but since the other company offered me $2.7k/year with much better coverage, should i forgo the current one and go for the new plan?

Indont know if there is any hidden clause or benefits thAt my current prulife is offering and tm is not though.