Advice on insurance

[Sensational]

Hi all,

Would appreciate some advice on insurance as I am reviewing them and thinking of buying some as I start work. I am 27 years old this year.

Currently, I have an AIA Life Plus Policy that was bought by my mum when I was 19. It is a WL policy and the insured value is not much, $100k for death, TPD and only $25k for CI.

Once I started work, I wanted to properly insure myself and have been looking at articles and the forums. Spoke to some agents who actually recommended me the AXA Life Exentials Prime at various assured values of $120k - $175k.

Questions is whether I should just get a term insurance on top of my AIA Life Plus Policy, or should I cancel the AIA Life Plus Policy, use that premium to buy the AXA Life Exentials Prime and then top up with another term policy?

I am only focusing on the WL and term policies debate because for the other policies like Shield Plan and accident, I will definitely be getting them. So the thing that is on my mind right now is the WL and term policy dilemma.

Do let me know if any more information is needed in order to obtain some advice from the people here. Thank you!

 

[Darkzi0n]

Have u asked urself Why do u think u still need protection after 65?

 

[Sensational]

Have u asked urself Why do u think u still need protection after 65?

in case anything happens to me?

I understand the debate about how actually after 65 you do not have any dependents so technically buying till the age of 65 makes sense. But even if i get a term, I am considering buying till like 75?

 

[Darkzi0n]

in case anything happens to me?

I understand the debate about how actually after 65 you do not have any dependents so technically buying till the age of 65 makes sense. But even if i get a term, I am considering buying till like 75?

Yea, I know buying insurance is to cover u in case anything happen to u, but I'm asking u y do u think u need to have that coverage?

Do u forsee urself to still have dependents after the age of 75? R u planning to be still in whatever debt after retirement? R u not planning to build up sufficient retirement fund such that those retirement fund can act as an insurance for ur death?

 

[Lewis.T]

in case anything happens to me?

I understand the debate about how actually after 65 you do not have any dependents so technically buying till the age of 65 makes sense. But even if i get a term, I am considering buying till like 75?

It's all highly personal, don't let another person affect your decision on when you think a term should stop. Some want additional coverage for stuff like C.I even though their dependents have grown up. Ponder it for awhile then come up with an age that you feel most comfortable with.

As for buying term, make sure you undertake the invest the rest portion of it as well. Many avenues for you to choose from, from DIY to regular savings at local banks. If unsure do read up a bit more here before you decide what you want to do for the investment portion.

Buying term only works when you execute the whole strategy of buy term and investing the rest.

 

[Sensational]

Yea, I know buying insurance is to cover u in case anything happen to u, but I'm asking u y do u think u need to have that coverage?

Do u forsee urself to still have dependents after the age of 75? R u planning to be still in whatever debt after retirement? R u not planning to build up sufficient retirement fund such that those retirement fund can act as an insurance for ur death?

Yup I agree. I would buy until 75 but after that I think there should be no more liabilities and dependents since I believe all would have been paid up and kids grown up. So I guess there is no point in WL?

 

[Sensational]

It's all highly personal, don't let another person affect your decision on when you think a term should stop. Some want additional coverage for stuff like C.I even though their dependents have grown up. Ponder it for awhile then come up with an age that you feel most comfortable with.

As for buying term, make sure you undertake the invest the rest portion of it as well. Many avenues for you to choose from, from DIY to regular savings at local banks. If unsure do read up a bit more here before you decide what you want to do for the investment portion.

Buying term only works when you execute the whole strategy of buy term and investing the rest.

Thanks for the advice.

Yes I believe with that additional money saved from WL, I can do my own investing. In fact I have already started but am still in the midst of learning as well.

But for the insurance portion, I am just in a dilemma still on whether I should get a term insurance, or a WL + term (which some have advised me to).

 

[Lewis.T]

Thanks for the advice.

Yes I believe with that additional money saved from WL, I can do my own investing. In fact I have already started but am still in the midst of learning as well.

But for the insurance portion, I am just in a dilemma still on whether I should get a term insurance, or a WL + term (which some have advised me to).

Get a term first. WL you can consider when your cash flow is better and there is a want to cover for things like C.I and ECI for life.

The reasoning is simple, if you don't wake up tomorrow or get a C.I the term will benefit your family/you more than the WL.

 

[soneat]

Thanks for the advice.

Yes I believe with that additional money saved from WL, I can do my own investing. In fact I have already started but am still in the midst of learning as well.

But for the insurance portion, I am just in a dilemma still on whether I should get a term insurance, or a WL + term (which some have advised me to).

Personally I am on whole life + term and I do invest. No endowment and no ILP.

ILP-Charges too high and not really sustainable for whole life protection

Endowment-Used to have 100% guaranteed returns endowment at reasonable IRR but such products does not exist anymore. Furthermore, with a definite end date, if the end date coincides with a year where the insurer decides to cut terminal bonus, than that's it. Endowment also don't provide much cover.

Term-Pure protection/cover.

Whole Life-While at old age the children would have grown up doesn't mean I do not need whole life CI coverage. While I do not have dependant by then, I also do not want to become dependant to others and hence some cover for myself for whole life. It also serves as some form of diversification (not just CPF life, investment, SRS, As Charged Shield, Elder Shield etc). At old age, I also think that things should be simpler and should something CI strikes, claiming from a policy might be simpler (I hope) than trying to sell away some investment etc. Having said that, it is really for diversification and as a contingency. Not all WL are bad but this view is not widely accepted in this forum.

 

[deepblueli]

Yup I agree. I would buy until 75 but after that I think there should be no more liabilities and dependents since I believe all would have been paid up and kids grown up. So I guess there is no point in WL?

Think what you want to cover and buy insurance for that coverage.

Cover medical expenses? Integrated shield plan
Cover for dependency? Term insurance
Cover for CI or outpatient when major illness strikes? Term or whole life with rider depending on age of coverage.

Note: not all outpatient medical can be claimed by integrated shield plan. And not all life insurance is just for dependent.

If you can manage or invest yourself and very confident you can get a a good lump sum when you are old, then you may not need whole life to cover your old age.

Limited pay whole life requires you to pay only for limited years (usually before you retire), that gives you the coverage for your whole life(or up to 99 years in some policies)

 

[Sensational]

Get a term first. WL you can consider when your cash flow is better and there is a want to cover for things like C.I and ECI for life.

The reasoning is simple, if you don't wake up tomorrow or get a C.I the term will benefit your family/you more than the WL.

Thanks for the advice. I think financially, if I have to get both WL and term, I am able to pay the premium. And then that question would come on whether I should cancel my existing AIA and get the AXA plan as introduced with a term or not.

 

[SBC]

Is TS paying at least $150 per month for the existing AIA WL?
Did you check the latest cash value?

 

[Sensational]

Personally I am on whole life + term and I do invest. No endowment and no ILP.

ILP-Charges too high and not really sustainable for whole life protection

Endowment-Used to have 100% guaranteed returns endowment at reasonable IRR but such products does not exist anymore. Furthermore, with a definite end date, if the end date coincides with a year where the insurer decides to cut terminal bonus, than that's it. Endowment also don't provide much cover.

Term-Pure protection/cover.

Whole Life-While at old age the children would have grown up doesn't mean I do not need whole life CI coverage. While I do not have dependant by then, I also do not want to become dependant to others and hence some cover for myself for whole life. It also serves as some form of diversification (not just CPF life, investment, SRS, As Charged Shield, Elder Shield etc). At old age, I also think that things should be simpler and should something CI strikes, claiming from a policy might be simpler (I hope) than trying to sell away some investment etc. Having said that, it is really for diversification and as a contingency. Not all WL are bad but this view is not widely accepted in this forum.

Yup actually i agree with your reasoning on the whole life portion. If fact my relatives told me to get a WL first and then add on a term for additional coverage in the future.

 

[soneat]

Thanks for the advice. I think financially, if I have to get both WL and term, I am able to pay the premium. And then that question would come on whether I should cancel my existing AIA and get the AXA plan as introduced with a term or not.

You should get an updated BI from AIA and compare it against the alternative (AXA) to see if it makes sense to switch.

 

[Sensational]

Is TS paying at least $150 per month for the existing AIA WL?
Did you check the latest cash value?

Paying around $70.94 per month. Into my 8th year already. Cash value I have to check since my mum holds the letters.

 

[Lewis.T]

Thanks for the advice. I think financially, if I have to get both WL and term, I am able to pay the premium. And then that question would come on whether I should cancel my existing AIA and get the AXA plan as introduced with a term or not.

AIA Life Plus seems to be an endowment, is there a maturity date stated on it? More details would help you make a better decision

Premiums payable?
Premium term is how long?
Current surrender value?
Maturity value?
When did this plan start?

 

[Sensational]

You should get an updated BI from AIA and compare it against the alternative (AXA) to see if it makes sense to switch.

Okay will do. But I was just thinking of leaving the AIA one there and just get something on top of it.

 

[Sensational]

AIA Life Plus seems to be an endowment, is there a maturity date stated on it? More details would help you make a better decision

Premiums payable?
Premium term is how long?
Current surrender value?
Maturity value?
When did this plan start?

Hi, my answers are in blue.

Premiums payable? $70.94 per month so it adds up to $851.22 a year.
Premium term is how long? Whole life till 100 years old
Current surrender value? Looking at age 28 it is $2,850
Maturity value? Guaranteed $50k with the non-guaranteed portion at 3.75% (ie. $101,634) and adding them up equals to $151,634.
When did this plan start? when I was 19 years old. So it was 2010.

 

[soneat]

Okay will do. But I was just thinking of leaving the AIA one there and just get something on top of it.

My 2 cents.
1. AIA policies are very costly in general and the terminal bonus takes a long time to kick in. Therefore it typically takes at least 20 years to breakeven.
2. If your finances are ok, yes you can consider taking up a suitable limited premium payment whole life plan while just hanging on to your AIA whole life policy.
3. Is your AIA whole life policy regular premium payment or limited premium payment? If its regular premium payment and you have intention to terminate some day...some time, you might want to chop off the riders.
4. Point 2 and 3 was exactly what I did as well and the end result is I have a better WL coverage (with the new plan) and I still manage to get something out from my old (lousy) AIA (Prime Life) policy with a decent 3+% (ard 3.5%) IRR.

So do evaluate how you want to deal with the old plan and do think carefully about the new one before signing up. Good luck!

 

[akwl88]

serious bro

get term plan and hosp plan enough liao

invest the rest to form a safety net when you have no dependents

guaranteed 50k only is zzz......