AIA Prime Life

[oceanicmanta]

What is the premium and coverage for both term and wholelife? Usually wholelife after so long, it will gives u good return already.

may not be the case, bcos in 2008 the projected surrender values would have taken at least a 25% hit ... so that year was like a reset ...

 

[boredboiboi]

may not be the case, bcos in 2008 the projected surrender values would have taken at least a 25% hit ... so that year was like a reset ...

Depends, as they will have smoothing effects on good years to covers the bad years. But heard they cut bonus many times too.
I have seen good return prime life of my clients too, they show me and told them to keep.

Old wholelife plan got 2 ways to go about doing it.
1) reduce paid up
2) take it as a saving plan as the returns always start to grow rapidly at the back

 

[soneat]

Hi,

I have an AIA Prime Life policy, since Year 1996. I'm wondering if I should surrender it now? Below link is the Post Sales Policy Illustration (31 Dec 2019).

I also have other Term Insurance (Death, TPD, Critical Illness), Hospitalization, Personal Accident plans, etc.

Appreciate you guys for your kind expert advice please.

Thanks.

https://ibb.co/02csLDj

My guess is your basic sum assured is S$50,000 and you are paying probably around S$680 a year for the basic plan (i.e. death and tpd), assuming no riders and no loading.

1. If you compare your PSBI vs your original BI, you will realise that both the protection value and surrender value have dropped significantly.

2. This plan falls under AIA Par Fund 2, which seems to be underperforming.

3. If you have CI riders peg to the policy, then u need to consider carefully if you want to terminate the policy because CI cover is rather important these days. However, if it is a plain vanilla plan for death/tpd, you can consider terminating it if
i) you do not need the cover any more, and
ii) you have a way of growing the money. The IRR should be around 3.8% if you surrender now.

 

[a4973]

Dear all

this is my latest Prime Life AB PSPI.

https://imgur.com/jSjP9U1

i am paying for these premiums :

Prime Life (AB)
Sum Assured
S$ 80,000.00

Premium S$ 1,854.40
=========================================
ECL Special
Sum Assured
S$ 70,000.00

Premium S$ 641.90
============================================
ECL/WP Special
Sum Assured
S$ 231.80

Premium S$ 25.90
======================================================
total premium S$2,522.20 / annum

i have used this spreadsheet that was embedded in the earlier part of this thread to calculate my returns.

https://docs.google.com/spreadsheets/d/1GGgOBn5Shh0eCm2NUZvrFh5Znp06P1Y8KKP--a5SOX0/edit?usp=sharing

question : when inputting the premium into the spreadsheet should it just be the premium for the basic plan or total premium inclusive of the attached riders?
currently in the spreadsheet i have filled in the total annual premium not sure if that's correct or not.

also not sure if i have used the spreadsheet correctly as the returns look abysmally low.

all comments are most welcomed.

 

[oceanicmanta]

The IRR should be around 3.8% if you surrender now.

if it is really 3.8% pa , I will surrender in a hear beat ! no need to think ... assuming its a plain vanilla death + tpd

 

[soneat]

if it is really 3.8% pa , I will surrender in a hear beat ! no need to think ... assuming its a plain vanilla death + tpd

Depends on the entry age and when the surrender is made, whether there r any loading, and if there's any rider. Yes it's possible.

 

[oceanicmanta]

Depends on the entry age and when the surrender is made, whether there r any loading, and if there's any rider. Yes it's possible.

yah, possible, if premium is $680, I calculated it's around 4.3%pa after 25 years !

his entry age shld be 22/23 ?

but I think premium is probably higher .. see what TS says

 

[oceanicmanta]

@a4973 .. your SS is not computing the IRR from inception of policy (it's for a different purpose that is forward looking to see when would be a better time to surrender)

i calculate the IRR to be around 0.06%pa for past 20 years based on total $2,522 premium

and IRR of 2.9%pa for past 20yrs if using just $1,854 ... which is not bad

... however, the IRR seems to decrease the longer u hold the policy ... I dont understand why this wld be so

how u treat the cost of the riders is up to you ... one way is to treat riders as purely expense with no residual value ... this also gives better IRR numbers ...

 

[oceanicmanta]

going thru the past posts here, it seems Prime Life has a big bonus payout on 20th year ...

this wld explain why IRR would decrease beyond that point ...

which also implies it would be best to surrender at 20th year, albeit the "IRR from Year 20" could still be attractive at more than 4%pa (from Yr 20 to Yr 30 in a4973's case )

 

[a4973]

@a4973 .. your SS is not computing the IRR from inception of policy (it's for a different purpose that is forward looking to see when would be a better time to surrender)

i calculate the IRR to be around 0.06%pa for past 20 years based on total $2,522 premium

and IRR of 2.9%pa for past 20yrs if using just $1,854 ... which is not bad

... however, the IRR seems to decrease the longer u hold the policy ... I dont understand why this wld be so

how u treat the cost of the riders is up to you ... one way is to treat riders as purely expense with no residual value ... this also gives better IRR numbers ...

Roger that! Btw I have PSPI dated 31 Dec 2018 and 31 Dec 2019 and the death and surrender numbers are exactly the same!! So does that mean that the numbers will update after the policy anniversary which is 11 Dec.

 

[soneat]

The terminal bonus kicks in only after Year 20. The "optimal IRR" surrender age would be around 48yo, thereafter, the insurance charge will increase (at a faster rate) and erode the IRR.

 

[a4973]

The terminal bonus kicks in only after Year 20. The "optimal IRR" surrender age would be around 48yo, thereafter, the insurance charge will increase (at a faster rate) and erode the IRR.

so the optimal entry age would be around 28 yo?
therefore by me entering at 36yo i am "behind the curve" so to speak?

thanks

 

[everyoneall]

What is the premium and coverage for both term and wholelife? Usually wholelife after so long, it will gives u good return already.

From the Jul 2020 - Participating Policy Annual Statement:
https://ibb.co/wWRqmX5

It seems, as it gets longer, the Projected Yield decreases from 3.81% to 3.39%. So, doesn't seems useful to retain it for longer period.

Personally, I'm very comfortable to get much higher than 4% return from my own investment. So, 3%+ return is not attractive to me...

So, I'm just wondering, if I should surrender this AIA Prime Life Policy, since I got same or higher Sum Assured in other Term Policies (in terms of Death, TPD and CI) already.

Thanks.

 

[everyoneall]

My guess is your basic sum assured is S$50,000 and you are paying probably around S$680 a year for the basic plan (i.e. death and tpd), assuming no riders and no loading.

1. If you compare your PSBI vs your original BI, you will realise that both the protection value and surrender value have dropped significantly.

2. This plan falls under AIA Par Fund 2, which seems to be underperforming.

3. If you have CI riders peg to the policy, then u need to consider carefully if you want to terminate the policy because CI cover is rather important these days. However, if it is a plain vanilla plan for death/tpd, you can consider terminating it if
i) you do not need the cover any more, and
ii) you have a way of growing the money. The IRR should be around 3.8% if you surrender now.

Bingo, you seems very familiar with AIA Prime Life.
Yup, my Basic Sum Assured is S$50K.
I'm paying $744 / Year for Basic Plan, excluding the CI.

3. For the CI replacement, I've brought other Term Policies last year, the CI Sum Assured are much higher than this AIA Prime Life. Since Term Policies are normally cheaper than Whole Life Policy.
3i. I heard, the older days Term/Life CI definitions are very wide, much easier to qualify for claim than newer Term Policies. So very wasted to surrender older CI plans. You guys have same experience?

3ii. Yes, I'm very comfortable to achieve much higher than 4% return, on my own investment. So, the AIA Prime Life's 3.8% is not attractive to me.

Thanks.

 

[everyoneall]

Most resellers wouldn't buy because they also aiming for the 20th bonus. I am likely the only 1 who will take in but at a low rate.

https://ibb.co/02csLDj

So, you interested to buy this AIA Prime Life? I'm 47 years old now.
If yes, please pm me on your buy price, as I considering to surrender it, these few days.

Thanks.

 

[soneat]

Bingo, you seems very familiar with AIA Prime Life.
Yup, my Basic Sum Assured is S$50K.
I'm paying $744 / Year for Basic Plan, excluding the CI.

3. For the CI replacement, I've brought other Term Policies last year, the CI Sum Assured are much higher than this AIA Prime Life. Since Term Policies are normally cheaper than Whole Life Policy.
3i. I heard, the older days Term/Life CI definitions are very wide, much easier to qualify for claim than newer Term Policies. So very wasted to surrender older CI plans. You guys have same experience?

3ii. Yes, I'm very comfortable to achieve much higher than 4% return, on my own investment. So, the AIA Prime Life's 3.8% is not attractive to me.

Thanks.

I would say that u are already pretty clear what you want to do. =)

 

[everyoneall]

I would say that u are already pretty clear what you want to do. =)

As far as the Returns aspect of the AIA Prime Life, I'm very clear - Surrender and invest on my own.


>> 3i. I heard, the older days Term/Life CI definitions are very wide, much easier to qualify for claim than newer Term Policies. So very wasted to surrender older CI plans. You guys have same experience?

But, for the Whole Life / CI aspect of the AIA Prime Life, I'm not clear. Are the older days Life policies really much beneficial than the newer policies? That even I get a new Term Policy, it can't match the older days Life Policies definition? Heard the newer Life/Term Policies definitions are very restrictive from mid-2020 onwards? Is that a big concern that I should be bothered?


Thanks.

 

[soneat]

As far as the Returns aspect of the AIA Prime Life, I'm very clear - Surrender and invest on my own.


>> 3i. I heard, the older days Term/Life CI definitions are very wide, much easier to qualify for claim than newer Term Policies. So very wasted to surrender older CI plans. You guys have same experience?

But, for the Whole Life / CI aspect of the AIA Prime Life, I'm not clear. Are the older days Life policies really much beneficial than the newer policies? That even I get a new Term Policy, it can't match the older days Life Policies definition? Heard the newer Life/Term Policies definitions are very restrictive from mid-2020 onwards? Is that a big concern that I should be bothered?


Thanks.

So your Prime Life has the CI rider? If so, you have an additional consideration then.

Usually, agents etc will advise that older CI plans are more lax and hence easier to meet the claim criteria. Also, as the policies have been in-forced for quite a while, the insurer is less likely to challenge the claim. My opinion is that while this sounds logical, it is not cast in stone.

 

[Value.Matrix]

https://ibb.co/02csLDj

So, you interested to buy this AIA Prime Life? I'm 47 years old now.
If yes, please pm me on your buy price, as I considering to surrender it, these few days.

Thanks.

Not buying over as my minimum yield is 4.5%. My investors are paying me to get 4%. Anything lower than 4.5% i have a huge risk.

 

[everyoneall]

Not buying over as my minimum yield is 4.5%. My investors are paying me to get 4%. Anything lower than 4.5% i have a huge risk.

Thanks for your prompt reply.