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Old 24-07-2020, 01:06 AM   #2536
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Basically you’d look for one or a couple new term policies to replace what you’ve got and add more sum assured, then cancel one or both of the policies you have. In that order, of course, so there’s no coverage gap. If it makes sense to do.

Why more than one new term policy (as a possibility)? Well, one reason is that it’d 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 don’t like what I’m 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 it’s a good deal for you. Obviously you’re going to be more reluctant to cancel a larger, “lumpy” policy, which is why the insurers encourage it with some premium discount at that level.


I’m 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 it’s open to you, great. That particular DII policy’s terms and conditions are not my favorite, but it’s worth considering.


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 it’s 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.


Ah, OK. Well, I don’t like the idea of a preexisting condition reset, so one option is PRUshield Plus with its associated rider.

Thanks BBCW. I've worked through the details based on what you recommended and here is my plan:
1. Increase my husband and myself's Mindef Term Life to $1m
2. Included myself for Mindef's DII
3. Get GE's DII to top-up the shortfall of 25% with #2 (will have to forsake the 3% escalating term as they do not offer this)
4. Get a new Term Life of $500k (include TPD). Any recommendation on this? And should i include TPD and CI? I know you are not a big fan of CI but if comes as a rider to the Term policy and the premium is affordable, should i go for it?
5. Downgrade PruShield Extra Premier rider to PruExtra Premier Lite CoPay

With regards to the 2 Whole Life policies, should i surrender both or keep one as a "safety net"? My concern is with the losses incurred should i surrender it now. What criteria should i consider to help me to decide on this?
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Old 24-07-2020, 11:10 AM   #2537
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....
4. Get a new Term Life of $500k (include TPD). Any recommendation on this? And should i include TPD and CI? I know you are not a big fan of CI but if comes as a rider to the Term policy and the premium is affordable, should i go for it?
TPD coverage is bundled with the term life insurance automatically, so that's easy.

If there's a partial CI acceleration option for not too much additional cost, you might consider it. For example, if you can tap 10% or 15% ($50,000 or $75,000) of that $500,000 policy, pulling that payout forward when a CI is experienced, that might be interesting enough if the premium is reasonable.

With regards to the 2 Whole Life policies, should i surrender both or keep one as a "safety net"? My concern is with the losses incurred should i surrender it now. What criteria should i consider to help me to decide on this?
It's conceptually pretty simple, really. Forget the sunk costs -- they're gone. When you're looking at a particular policy, be sure to figure out the best available surrender value (which could be from a third party). Then you just look at whether you'd buy this particular policy (with $Y upcoming premiums) now, from this point forward, or whether it's better to take the $X and run.
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Old 24-07-2020, 10:00 PM   #2538
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How should Mom optimize CPF

Hi BBCW,

Need your advice again. I cannot figure out CPF top-up rules. To me they are a black box, very confusing.

My mom is currently 69, and she has the following amounts in her CPF -

Ordinary 102,042.95
Special 10,670.19
Medisave 49,232.14
Retirement 180,816.74

She also has a few sums of fixed deposits expiring. As the interest rates are really low now and she is wary of investing in stock market, I would like to know whether she can do some voluntary contribution into her various CPF accounts to earn more than 1% fixed deposit interest.

She is not enrolled into the CPF Life scheme and this is where things get confusing for me when I read the rules. She should technically be able to draw money out from CPF. The thing is she doesn't want to... she wants the money to stay in CPF for as long as possible, and to add more to CPF if possible, to earn the interest.

Any advice you can give us would be greatly appreciated, as usual. Many thanks.
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Old 24-07-2020, 11:27 PM   #2539
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For mortgage liability, can choose to get mortgage insurance rather than dearth insurance right ?
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Old 25-07-2020, 07:39 AM   #2540
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My mom is currently 69, and she has the following amounts in her CPF -

Ordinary 102,042.95
Special 10,670.19
Medisave 49,232.14
Retirement 180,816.74

She is not enrolled into the CPF Life scheme and this is where things get confusing for me when I read the rules. She should technically be able to draw money out from CPF. The thing is she doesn't want to... she wants the money to stay in CPF for as long as possible, and to add more to CPF if possible, to earn the interest.
I'm not BBCW but I like to test my CPF knowledge:
1. Please check that she has made a CPF nomination.
2. 2020's ERS is 271,500 so she can top-up RA to that amount.
3. 2020's BHS is 60,000 so she can top-up MA to BHS. EDIT: BHS seems to be frozen when she reached 65. So this may not be possible.
4. If she has used CPF funds to purchase property previously, she can top-up her OA to the principal + accrued interest amount.
5. If she is not on CPF Life, she will be on RSS. She can request for higher monthly payout if she wants or do nothing after the top-up.
6. She has presumably met her age's FRS. The balance above FRS in SA and OA can be withdrawn anytime.

Let's wait for others to chip in.

Last edited by zoneguard; 25-07-2020 at 08:06 AM.. Reason: BHS frozen at 65
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Old 25-07-2020, 08:52 AM   #2541
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My mom is currently 69, and she has the following amounts in her CPF -
Ordinary 102,042.95
Special 10,670.19
Medisave 49,232.14
Retirement 180,816.74

She also has a few sums of fixed deposits expiring. As the interest rates are really low now and she is wary of investing in stock market, I would like to know whether she can do some voluntary contribution into her various CPF accounts to earn more than 1% fixed deposit interest.

She is not enrolled into the CPF Life scheme and this is where things get confusing for me when I read the rules. She should technically be able to draw money out from CPF. The thing is she doesn't want to... she wants the money to stay in CPF for as long as possible, and to add more to CPF if possible, to earn the interest.
OK. Iím going to assume then that she has not started any classic Retirement Sum Scheme payouts either. However, from her 70th birthday sheíll be required to start payouts, either via the classic RSS or a CPF LIFE plan, her choice. If she starts with classic RSS she can later switch to CPF LIFE using the residual if she wishes, but any switch needs to be made no later than a couple months before her 80th birthday.

I'm not BBCW but I like to test my CPF knowledge:
1. Please check that she has made a CPF nomination.
2. 2020's ERS is 271,500 so she can top-up RA to that amount.
Thatís correct. The $271,500 limit (2020) is based on principal only, not accrued interest, so thereís probably at least $100,000 that could be added to her RA now, then more every time the ERS is raised. Also, since her RA is just below $181,000 thereís a very little bit of tax relief opportunity available. For example, a child in a high income tax bracket could deposit $183.26 into her RA and get tax relief on that amount.

A Retirement Account top up earns 4% interest for all whole months itís in the RA, then it streams out as retirement income. RA is not particularly liquid for lump sum withdrawals, especially after CPF LIFE payouts start.

3. 2020's BHS is 60,000 so she can top-up MA to BHS. EDIT: BHS seems to be frozen when she reached 65. So this may not be possible.
Assuming she turned 65 in 2016, her Basic Healthcare Sum was fixed at $49,800. So she may have a few hundred dollars she can put into her MediSave Account. She is eligible for tax relief when she does that, although thatís assuming she has enough taxable income (from work, rental income, etc.) for tax relief to matter. This top up must also fit within the CPF Annual Limit. It earns 4%, and when her MA is at her BHS the interest will likely spill over into her OA. MA can be used for qualified medical spending in Singapore, including base Integrated Shield plan premiums, up to withdrawal limits.

4. If she has used CPF funds to purchase property previously, she can top-up her OA to the principal + accrued interest amount.
Yes, but she shouldnít do this until after reaching the ďall three accountĒ Voluntary Contribution limit. An all 3 VC must fit within the CPF Annual Limit. If she keeps her MA pegged at her BHS ó not hard to do since sheís so close to it ó then a small piece of her VC lands in her SA and the rest in her OA. Thatís better than a pure OA repayment since SA earns 4.0% interest.

5. If she is not on CPF Life, she will be on RSS. She can request for higher monthly payout if she wants or do nothing after the top-up.
Another option that effectively pushes withdrawals as far forward in time as possible is the...CPF LIFE Escalating Plan.

6. She has presumably met her age's FRS. The balance above FRS in SA and OA can be withdrawn anytime.
Itís hard to tell. Her RA balance is below the current FRS, and the FRS has been increasing at a slower rate than RA (plus interest) from her 65th birthday. However, she may have already withdrawn a bit, with or without a property pledge/charge. But sheís really, really close to the current FRS and can add funds to her RA if she wishes.

For mortgage liability, can choose to get mortgage insurance rather than dearth insurance right ?
Yes, but do you want to? Iím not a big fan of mortgage reducing insurance in part because a survivor should have the flexibility to decide how a death benefit will be deployed. Paying off a 1.8% mortgage (and locking up a ton of equity) might be a perfectly terrible idea in the circumstances. In certain circumstances youíre required to have Home Protection Scheme coverage, whereupon youíd count HPS coverage in calculating whether and how much life insurance you need. Otherwise, Iíd avoid mortgage reducing insurance. Certain banks and mortgage brokers have been known to apply high pressure sales tactics, insisting you must buy this type of insurance. No, not true. Ordinary term life insurance works fine for these and other purposes.
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Old 25-07-2020, 11:32 AM   #2542
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Hi BBCW,

Would like your input on retirement planning

Parents downgraded from Condo to HDB, so we have about 350k in cash, 600k OA. Dad has reached FRS, and mum hit BRS. Dad may work for 1-2 more years.

I have read through and understood that while CPF is not a bequest vehicle, we can tap on its strengths as an annuity which guarantees monthly payouts for life. I am advising them to transfer dadís OA to fund their RA to ERS.

I am worried that my dad may have loss of independence.

As such, do you think that a retirement plan from private insurers(Manuife RetireReady Plus II, NTUC Income Gro Retire Ease, Aviva MyRetirement Choice) that provides additional payouts upon loss of independence, on top of CPF Life would be useful as opposed to VC?

Last edited by Extech; 25-07-2020 at 11:35 AM..
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Old 25-07-2020, 11:42 AM   #2543
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Hi BBCW,

Would like your input on retirement planning

Parents downgraded from Condo to HDB, so we have about 350k in cash, 600k OA. Dad has reached FRS, and mum hit BRS. Dad may work for 1-2 more years.
For BBCW and anybody else to advise, we need your parents' ages since CPF is a age-based scheme, all the FRS/ERS/BHS are tied to their age cohorts. And the rules on top-ups and transfers are all tied to age.

Last edited by zoneguard; 25-07-2020 at 11:44 AM.. Reason: age based rules
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Old 25-07-2020, 12:51 PM   #2544
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Hi BBCWatcher,

I was doing some research recently on insurance for foreign spouses and came upon post #32 where you mentioned that some of the choices for foreign spouses were those offered by NTUC Income (e.g. Enhanced IncomeShield Basic and Enhanced IncomeShield C). Could I check that today, these recommendations still stand? Further, I did some digging into the terms and conditions and came upon this line -

Enhanced IncomeShield is available as a Medisave-approved Integrated Shield Plan for insured who is a Singaporean or a Singapore Permanent Resident. This applies as long as the insured meets the eligibility conditions under MediShield. If the insured is a foreigner who has an eligible valid pass with a foreign identification number (FIN), Enhanced IncomeShield is not available as an Integrated Shield Plan.

What does this mean actually and would it affect your recommendation today?

Many thanks, and I do appreciate all the help you've rendered so far!
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Old 25-07-2020, 02:14 PM   #2545
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Would like your input on retirement planning

Parents downgraded from Condo to HDB, so we have about 350k in cash, 600k OA. Dad has reached FRS, and mum hit BRS. Dad may work for 1-2 more years.

I have read through and understood that while CPF is not a bequest vehicle, we can tap on its strengths as an annuity which guarantees monthly payouts for life. I am advising them to transfer dad’s OA to fund their RA to ERS.
That's a nice idea, but there's a limitation to be aware of. Specifically, if you're transferring CPF funds to your own Retirement Account, the funds are drawn first from your Special Account. Since your father is still working presumably he has some savings in his Special Account.

However, your father can transfer some of his CPF savings to your mother (his wife), and that transfer will draw directly from his Ordinary Account first. That transfer can be up to the current Enhanced Retirement Sum ($271,500 in 2020) if they wish, so your mother's Retirement Account can be much bigger if desired. Likewise, your mother can transfer Ordinary Account savings she may have to her husband (your father), up to the same limit (ERS).

The ERS for a Retirement Account is measured based only on principal, not on interest. Every time the ERS is raised it's possible to make another transfer (or add a cash top up) if desired. But the important part is that they should cross-transfer if they have SA dollars on hand, if possible, since that'll draw from OA first, not from higher interest earning SA. Yes, this is a little weird, but that's how the rules work.

It's still quite prudent for them to maintain a reasonable pool of liquid funds for emergencies, in CPF SA+OA and/or elsewhere, but yes, they should be able to shift some funds into their RAs, starting with your mother's (since hers is much lower), to boost retirement income.

I am worried that my dad may have loss of independence.

As such, do you think that a retirement plan from private insurers(Manuife RetireReady Plus II, NTUC Income Gro Retire Ease, Aviva MyRetirement Choice) that provides additional payouts upon loss of independence, on top of CPF Life would be useful as opposed to VC?
That wouldn't be my first choice. CareShield Life will presumably be available to your father (and mother) from mid-2021, and that's probably most directly responsive to this concern. They could also take a look at Tokio Marine's TM Protect 1 if they're looking for something focused on this particular class of risks that has a less demanding definition of disability, but "take a look at" doesn't necessarily mean "buy."

For BBCW and anybody else to advise, we need your parents' ages since CPF is a age-based scheme, all the FRS/ERS/BHS are tied to their age cohorts. And the rules on top-ups and transfers are all tied to age.
Well, yes, but in this case we probably have enough information so far since both of these parents evidently have Retirement Accounts (i.e. they're age 55+).

I was doing some research recently on insurance for foreign spouses and came upon post #32 where you mentioned that some of the choices for foreign spouses were those offered by NTUC Income (e.g. Enhanced IncomeShield Basic and Enhanced IncomeShield C). Could I check that today, these recommendations still stand?
No, unfortunately not. Enhanced IncomeShield C is no longer available to any new applicants. Moreover, it appears that none of the Integrated Shield plans designed to cover public hospital B1 ward are available to foreigners (non-Singaporean citizens/non-PRs) for new signups. (An ex-citizen or ex-PR who wants to keep an Integrated Shield plan can do so by paying a higher premium.)

However, some of the public hospital A ward Integrated Shield plans are available to foreigners. Prudential's is, for example.
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Last edited by BBCWatcher; 25-07-2020 at 02:17 PM..
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Old 25-07-2020, 03:04 PM   #2546
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Hi bbcwatcher. Need some advice thanks.
I have around 50k that I am investing in sti etf. Have put it 10k to singlife and 20k to dasheasyearn. I have enough emergency funds and I have like 50k of savings that I want to put into somewhere which can grow.. I am 28 and donít plan of getting married or have kids so I can retire earlier. My goal is to get a 2 room bto by 38 and semi retire by then. A agent introduced me to a premium policy ntuc vivoweath solitaire for 40k and the unique thing is said that I can take bank loan of 100k to leverage since the bank loan interest is Low right now. I will have a good return And payout if I surreender at 55. Is that a good idea. If not what do you advice for my reminding 50k savings? Thanks a lot sorry I donít have much financial knowledge.

And what insurance do you recommend someone with no dependents? I only have great eastern hospital term plan that all. Thanks

Last edited by toaddd; 25-07-2020 at 03:18 PM..
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Old 25-07-2020, 03:33 PM   #2547
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Just curious. If the plan is 40k why do u need to borrow 100k?

Maybe u can list down the cost and value here so bbcw or anyone can have a look for u. U can calculate IRR to see if itís worth it

But do note that there is non guaranteed portion in the return.

Hi bbcwatcher. Need some advice thanks.
I have around 50k that I am investing in sti etf. Have put it 10k to singlife and 20k to dasheasyearn. I have enough emergency funds and I have like 50k of savings that I want to put into somewhere which can grow.. I am 28 and donít plan of getting married or have kids so I can retire earlier. My goal is to get a 2 room bto by 38 and semi retire by then. A agent introduced me to a premium policy ntuc vivoweath solitaire for 40k and the unique thing is said that I can take bank loan of 100k to leverage since the bank loan interest is Low right now. I will have a good return And payout if I surreender at 55. Is that a good idea. If not what do you advice for my reminding 50k savings? Thanks a lot sorry I donít have much financial knowledge.

And what insurance do you recommend someone with no dependents? I only have great eastern hospital term plan that all. Thanks
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Old 25-07-2020, 03:43 PM   #2548
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Just curious. If the plan is 40k why do u need to borrow 100k?

Maybe u can list down the cost and value here so bbcw or anyone can have a look for u. U can calculate IRR to see if itís worth it

But do note that there is non guaranteed portion in the return.
I would then put in 140k by taking 100k loan. Sorry I am not well versed so I am not sure whatís the irr . Yeah I know that the policy most likely wonít fulfill the 4.25% so I take in the 3.25% instead and there will be profits if I donít surrender by 40 years old. I donít really need the funds right now as they are for retirement.and just want it to grow.
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Old 25-07-2020, 04:00 PM   #2549
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I would then put in 140k by taking 100k loan. Sorry I am not well versed so I am not sure whatís the irr . Yeah I know that the policy most likely wonít fulfill the 4.25% so I take in the 3.25% instead and there will be profits if I donít surrender by 40 years old. I donít really need the funds right now as they are for retirement.and just want it to grow.
Stated objective:
Semi retirement at 38. Own a 2 room BTO.

Fact finding:
1. How's the CPF OA/SA/MA balances?
2. What's the monthly/annual expenses?
3. Is the Great Eastern Hosp. plan a HS/IntegratedShield plan? I thought the product name is 'Great Supremehealth'?
4. You intend to leverage by borrowing to purchase a WLP? My suggestion: Don't! Until you know how to calculate IRR and make sense of the numbers yourself and that you are not taking on too much risk by borrowing even though it is for a policy.
5. You already DIY with STI ETF. Why not continue to DIY but extend it with a world equity ETF like IWDA or VWRA and bring the cost down by doing it yourself. When you DIY, you are not paying for the agent's commission and gain the potential returns.

Let's wait for others to chip in too.
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Old 25-07-2020, 04:18 PM   #2550
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Stated objective:
Semi retirement at 38. Own a 2 room BTO.

Fact finding:
1. How's the CPF OA/SA/MA balances?
2. What's the monthly/annual expenses?
3. Is the Great Eastern Hosp. plan a HS/IntegratedShield plan? I thought the product name is 'Great Supremehealth'?
4. You intend to leverage by borrowing to purchase a WLP? My suggestion: Don't! Until you know how to calculate IRR and make sense of the numbers yourself and that you are not taking on too much risk by borrowing even though it is for a policy.
5. You already DIY with STI ETF. Why not continue to DIY but extend it with a world equity ETF like IWDA or VWRA and bring the cost down by doing it yourself. When you DIY, you are not paying for the agent's commission and gain the potential returns.

Let's wait for others to chip in too.
1. I have 50000 oa. 30000 sa. 20000 ma
2. Monthly expenses is Low should be around 300 plus. My monthly salary is 3500 before cpf.
3. Yes itís that plan.
4. I will try to calculate I need a financial calculator?
5. Actually my dca of sti etf is not doing well maybe cause of COVID hope it recover soon so I am thinking of using other methods to save
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