AIA Prime Life

[everyoneall]

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.

- Consideration 1: Year with Big Jump in Surrender Value
My AIA Prime Life Policy has long passed the breakeven year at 20th Year. So, the big jump in Surrender Value was already credited into my account, several years ago.

So, based on the Post Sales Policy Illustration table, my policy will not have any big jump in Surrender Value, in the near future year. So, there's not much difference to surrender my policy at whichever subsequent year.

- Consideration 2: Can I achieve better returns than this policy?
Based on AIA Statement dated 7 Jul 2020:
- For next 5 years, the Projected Yield for Surrender will be ard 3.81%
- At 18th years, the Projected Yield for Surrender will drop to 3.39% instead.

So, if I can achieve > 4% pa return comfortably from my own investment, then I can consider to surrender this old Life Policy.

- Consideration 3: Older Life Policy has less restrictive CI coverage definitions
For the consideration on older Life Policies - its coverage definitions are typically less restrictive for claims: the Critical Illness (CI) coverage in AIA Prime Life, is a late-stage CI. So, it'll be more beneficial, if I use that money, to get a new Life/Term Policy on Early Critical Illness instead.

Above is just my own conclusion for my AIA Prime Life policy.

Do your own due diligence for your policies accordingly.

 

[alvincy]

Would like to seek any kind advice on my AIA Prime Life bought in 2003. Premiums $187.58 monthly

I'm 42 yrs old.

Details as follow:

Prime Life Coverage $100k (Premium $132)
====================================
APWP/Basic Coverage $100k (Premium $0)
====================================
WP on APWP Coverage $132 (Premium $0)
====================================
ECL Special Coverage $80k (Premium $36.80)
====================================
ECL/WP Special Coverage $26.40 (Premium $1.80)
====================================
EADD+MR Coverage $60k (Premium $16.83)
====================================
TPD on EADD Coverage $600 (Premium $0)
====================================
Medical Reimbursement $6k (Premium $0)

Accumulated Reversionary bonus ~$15k

I just calculated premium paid YTD ~ $40k
Surrender Cash Value from Website ~ $25k

How much long do i have to keep this policy until break even?

Thank you very much.

 

[soneat]

Would like to seek any kind advice on my AIA Prime Life bought in 2003. Premiums $187.58 monthly

I'm 42 yrs old.

Details as follow:

Prime Life Coverage $100k (Premium $132)
====================================
APWP/Basic Coverage $100k (Premium $0)
====================================
WP on APWP Coverage $132 (Premium $0)
====================================
ECL Special Coverage $80k (Premium $36.80)
====================================
ECL/WP Special Coverage $26.40 (Premium $1.80)
====================================
EADD+MR Coverage $60k (Premium $16.83)
====================================
TPD on EADD Coverage $600 (Premium $0)
====================================
Medical Reimbursement $6k (Premium $0)

Accumulated Reversionary bonus ~$15k

I just calculated premium paid YTD ~ $40k
Surrender Cash Value from Website ~ $25k

How much long do i have to keep this policy until break even?

Thank you very much.

Get an updated BI from AIA website .
For AIA, usually 20 years is the time where there is a bigger jump in the terminal bonus.
For this Prime Life, looking at the year you bought this, I believe a 150% terminal bonus on the RB is awarded from Year 20 onwards.

As you have a lot of riders attached to the policies, the surrender value MAY or MAY NOT breakeven. From the above figures you have provided, my gut feel is you will breakeven but not by a lot.

Btw, what was your objective of buying the policy? If your objective is to get $ returns, then buying a whole life insurance with CI riders attached is not ideal. In fact, insurance core purpose should be to provide financial protection against certain life events (e.g. death, tpd, ci, eci, ...).

 

[davidtanwei]

The bonus is already included in the surrender value. Initially, I thought the surrender value shown in their aia mobile app is not included of bonus. However, when I make appointment go change nomination. They told what you see is what you get. It's that little..
I can't remember...it started in the 2000 something where my insurance agent ask you to sign your initial insurance package again. They breakup your initial monthly into sub sub. So some sub is your money cannot get back. I was con into it because I told him whatever I put in...I want get back same or little less...all say ok. Worse part is tell me premium holiday money can take out to use for holiday.

However, I ask them if I take out all the surrender money and still continue monthly payment. They said the policy payout no affect it...still remain as it is

 

[davidtanwei]

So terminal bonus for most policy have after 20years

 

[alvincy]

https://photos.app.goo.gl/7PJraVMxjR4SHu8bA
Year 20 onwards will break even.
The CI is causing the SV to be lesser than the principle i think.

 

[soneat]

https://photos.app.goo.gl/7PJraVMxjR4SHu8bA
Year 20 onwards will break even.
The CI is causing the SV to be lesser than the principle i think.

The base plan provides a death cover. Premium paid for the base plan participate in the par fund and hence there are returns.

Riders accelerate the protection from the base plan by adding additional trigger conditions. E.g. CI riders will allow base plan protection value to be triggered when CI occurs. Premium paid for riders are pure expenses.

I won't say "the CI is causing the SV to be less than the principle" due to the explanation I have provided above.

 

[a4973]

The base plan provides a death cover. Premium paid for the base plan participate in the par fund and hence there are returns.

Riders accelerate the protection from the base plan by adding additional trigger conditions. E.g. CI riders will allow base plan protection value to be triggered when CI occurs. Premium paid for riders are pure expenses.

I won't say "the CI is causing the SV to be less than the principle" due to the explanation I have provided above.

So one should only use base plan premium against the SV to calculate the returns? Thanks

 

[Prataman08]

Whatever you do, DO NOT CANCEL THIS. For the premium you pay, you can’t get an equivalent insurance anywhere else

 

[soneat]

So one should only use base plan premium against the SV to calculate the returns? Thanks

There is no hard and fast rule on how to calculate returns. I am just stating the fact that riders are 100% expenses so if one expects returns from the rider premium, then the person will be disappointed and he probably is not familiar with insurance.

 

[oceanicmanta]

So one should only use base plan premium against the SV to calculate the returns? Thanks

you can always compute both, with and without effects of riders

not too difficult, just add extra columns, to reflect the different yearly cash flows

more importantly, pay close attention to the projected maturity value every year (not just the annual bonus) ... annual bonus my be smoothed, but the cuts in terminal bonus can still happen

in fact, in bad years, it is more likely that bonus are maintained but terminal values are cut

I also do sensitivity tests on my plan's returns on varying the bonus/annual cash withdrawals & terminal value ... for shorter plans, like 15-20yrs, the terminal value have a much more significant effect on returns than the yearly bonus

as pointed out in another thread, over the past year, some insurers may have marginally increased the projected maturity values of their plans ... I am waiting to review mine

 

[m0n0n0ke]

Is prime life a kind of saving plan?

 

[a4973]

Hi everybody, for those very familiar with Prime Life, when should one review the BI for any bonus update, changes etc? Would it be the :
1. Policy anniversary ?
2. End of calendar year ?
3. End of AIA financial year ?

Many thanks

 

[boredboiboi]

Hi everybody, for those very familiar with Prime Life, when should one review the BI for any bonus update, changes etc? Would it be the :
1. Policy anniversary ?
2. End of calendar year ?
3. End of AIA financial year ?

Many thanks

Policy anniversary

 

[boredboiboi]

Is prime life a kind of saving plan?

Nope. Its a wholelife plan

 

[soneat]

Hi everybody, for those very familiar with Prime Life, when should one review the BI for any bonus update, changes etc? Would it be the :
1. Policy anniversary ?
2. End of calendar year ?
3. End of AIA financial year ?

Many thanks

The earliest u can review each year is right after AIA announced their bonus for the preceding year. This is usually during June/July.

 

[a4973]

Hi Prime Life experts, I've recently been diagnosed with a condition that currently does NOT meet the CI definition in my prime life policy. Thus I would like to ask about this scenario : say my condition advances and at some point it does meet the CI definition however if I do not need the money from the CI payout and I do not initiate the CI claim process what will happen? Asked another way even if one does not need the CI payout money does it make sense NOT to claim the CI? Thank you

 

[boredboiboi]

Hi Prime Life experts, I've recently been diagnosed with a condition that currently does NOT meet the CI definition in my prime life policy. Thus I would like to ask about this scenario : say my condition advances and at some point it does meet the CI definition however if I do not need the money from the CI payout and I do not initiate the CI claim process what will happen? Asked another way even if one does not need the CI payout money does it make sense NOT to claim the CI? Thank you

It totally dont make sense not to claim, u wan to continue pay the premium for what then? Give the insurer free money? What is the point of buying and dont claim when u can?
Use the payout to grow the money.

even if u fully paid the plan. U would be better off with the payout to grow the money than the value inside growing. Surely the payout is way higher than ur cash value inside.

 

[a4973]

It totally dont make sense not to claim, u wan to continue pay the premium for what then? Give the insurer free money? What is the point of buying and dont claim when u can?
Use the payout to grow the money.

My thinking is that that there's still death and tpd coverage and the bonuses will continue to be accrued. It's not that I don't want the payout. Thanks again

 

[boredboiboi]

My thinking is that that there's still death and tpd coverage and the bonuses will continue to be accrued. It's not that I don't want the payout. Thanks again

You are welcome.

If ur death/tpd still got balance after payout. U will be paying lesser premium after claim. If death/tpd and ci is the same coverage, then why wait till death/tpd when u already can claim on ci?