Getting started with insurance

[*adiBOY]

I'm a bit noob when it comes to insurance policies. Is there a good insurance company now which I should get my insurance from (premium to coverage to payout ratio) or every of the insurance company out there offers almost similar products in a particular category?

From what I've read, top priority should be Critical Illness and Hospitalization policies and Whole/ Term Life shall only be purchased if we have dependents?

 

[blackvice]

I'm a bit noob when it comes to insurance policies. Is there a good insurance company now which I should get my insurance from (premium to coverage to payout ratio) or every of the insurance company out there offers almost similar products in a particular category?

From what I've read, top priority should be Critical Illness and Hospitalization policies and Whole/ Term Life shall only be purchased if we have dependents?

Most of the insurer provides competitive and comparable products in terms of pricing and benefits respectively.

That depends on the situation of the individual.(age, work/occupation, dependents) Of course, the generic rule is to get an hospitalization plan first, before anything else. As you know medical costs in sg are high.

 

[Lewis.T]

I'm a bit noob when it comes to insurance policies. Is there a good insurance company now which I should get my insurance from (premium to coverage to payout ratio) or every of the insurance company out there offers almost similar products in a particular category?

From what I've read, top priority should be Critical Illness and Hospitalization policies and Whole/ Term Life shall only be purchased if we have dependents?

C.I is not top priority, it's quite the ways down the list and I would consider it luxury coverage. I would consider a hospitalization policy as top priority.

When to get whole life/term is subjective, but in general it is only needed if you will have dependents or already have dependents. Some choose to get earlier to pay lower premiums over the years (although overall you probably pay slightly more, but then again your coverage starts earlier.)

Also if you're considering whole life, it is better to start earlier as the premium term (10, 15 ,25 years for example) is usually fixed and is cheaper when young.

 

[*adiBOY]

C.I is not top priority, it's quite the ways down the list and I would consider it luxury coverage. I would consider a hospitalization policy as top priority.

When to get whole life/term is subjective, but in general it is only needed if you will have dependents or already have dependents. Some choose to get earlier to pay lower premiums over the years (although overall you probably pay slightly more, but then again your coverage starts earlier.)

Also if you're considering whole life, it is better to start earlier as the premium term (10, 15 ,25 years for example) is usually fixed and is cheaper when young.

What would be the top 3 priority to get then? I’m in my 30s this year.

 

[Lewis.T]

What would be the top 3 priority to get then? I’m in my 30s this year.

There's only two I deem necessary, first being hosp and second being whole life/term coverage (if you need it).

The rest is nice to have but it won't break your bank (too badly) if something happens that isn't covered by the above two.

 

[Crazypoorasian]

Help: Insurance Advice

Need some advice here to decide the most logical personal insurance strategy.

I am 27 y/o. Currently working. Have 2 parents at 58 and 68. Take home pay around 3k.

A year ago, I decided to get some insurance in place for myself. Didn’t know much about insurance.

Was sold an ILP plan as my first insurance plan (didn’t have any except for the mindef aviva coverage).

The agent highly encouraged it(explaining benefits of flexibility and ability to get money back). So, I ended up buying it.

What I got was an AXA flexiprotector plan(ILP). A 200K for Death and TBD coverage with late stage Critical illness.
I am paying 200/month.

Now, hoping to complete my coverage, I went to ask for some advice from the same agent and this is the proposed plan:
AXA 30 years Term plan – $736/yr (1mil coverage)
Early Stage critical illness - $778/yr (100k coverage)
Shield Plan A - $368
Shield Plan A Rider - $412

Feeling that this plan was quite straining on my budget, I consulted a broker who gave a totally different advice: Buy Whole life plan and wait for insurance companies to come up with better co-payment shield offers (after 1st april)
The plan was:
Aviva wholelife plan – 1535/yr (premium term 25 yrs, 200k enhanced cover)
TPD – 100/yr (premium term 25 yrs, 200k enhanced cover)
Early critical illness – 1360/yr (premium term 25 yrs, 200k enhanced cover)

Mainly these questions:
1. Having read so much (negative reviews) about ILP, should I terminate it?
2. Term plan VS whole life plans
3. Good amount of coverage at this point of my life?
4. Early critical illness vs late stage vs no CI coverage?
5. Other advices or opinion?
How should I proceed at this juncture? Seeking other opinions to help me get a clear decision. Thank you in advance to anyone giving me advice here.

 

[moejoseph]

Need some advice here to decide the most logical personal insurance strategy.

I am 27 y/o. Currently working. Have 2 parents at 58 and 68. Take home pay around 3k.

A year ago, I decided to get some insurance in place for myself. Didn’t know much about insurance.

Was sold an ILP plan as my first insurance plan (didn’t have any except for the mindef aviva coverage).

The agent highly encouraged it(explaining benefits of flexibility and ability to get money back). So, I ended up buying it.

What I got was an AXA flexiprotector plan(ILP). A 200K for Death and TBD coverage with late stage Critical illness.
I am paying 200/month.

Now, hoping to complete my coverage, I went to ask for some advice from the same agent and this is the proposed plan:
AXA 30 years Term plan – $736/yr (1mil coverage)
Early Stage critical illness - $778/yr (100k coverage)
Shield Plan A - $368
Shield Plan A Rider - $412

Feeling that this plan was quite straining on my budget, I consulted a broker who gave a totally different advice: Buy Whole life plan and wait for insurance companies to come up with better co-payment shield offers (after 1st april)
The plan was:
Aviva wholelife plan – 1535/yr (premium term 25 yrs, 200k enhanced cover)
TPD – 100/yr (premium term 25 yrs, 200k enhanced cover)
Early critical illness – 1360/yr (premium term 25 yrs, 200k enhanced cover)

Mainly these questions:
1. Having read so much (negative reviews) about ILP, should I terminate it?
2. Term plan VS whole life plans
3. Good amount of coverage at this point of my life?
4. Early critical illness vs late stage vs no CI coverage?
5. Other advices or opinion?
How should I proceed at this juncture? Seeking other opinions to help me get a clear decision. Thank you in advance to anyone giving me advice here.

AXA FlexiProtector, although is an ILP, works differently than the other usual ILP. It gives the flexibility of increasing ur coverage or investment portion according to ur needs. But if u need the cash portion, a word of advice will be to surrender around age 60 - 70 (depending on BI), because the cost of insurance will be increasing sharply. Which is why another plan is required to supplement it, if ur budget allows.

Most people here would agree term life is better than whole life as well, especially when u already have a plan like flexiprotector. Not sure why the broker recommend u a whole life instead.

Am glad the AXA agent is providing sound advice to u

 

[moejoseph]

Need some advice here to decide the most logical personal insurance strategy.

I am 27 y/o. Currently working. Have 2 parents at 58 and 68. Take home pay around 3k.

A year ago, I decided to get some insurance in place for myself. Didn’t know much about insurance.

Was sold an ILP plan as my first insurance plan (didn’t have any except for the mindef aviva coverage).

The agent highly encouraged it(explaining benefits of flexibility and ability to get money back). So, I ended up buying it.

What I got was an AXA flexiprotector plan(ILP). A 200K for Death and TBD coverage with late stage Critical illness.
I am paying 200/month.

Now, hoping to complete my coverage, I went to ask for some advice from the same agent and this is the proposed plan:
AXA 30 years Term plan – $736/yr (1mil coverage)
Early Stage critical illness - $778/yr (100k coverage)
Shield Plan A - $368
Shield Plan A Rider - $412

Feeling that this plan was quite straining on my budget, I consulted a broker who gave a totally different advice: Buy Whole life plan and wait for insurance companies to come up with better co-payment shield offers (after 1st april)
The plan was:
Aviva wholelife plan – 1535/yr (premium term 25 yrs, 200k enhanced cover)
TPD – 100/yr (premium term 25 yrs, 200k enhanced cover)
Early critical illness – 1360/yr (premium term 25 yrs, 200k enhanced cover)

Mainly these questions:
1. Having read so much (negative reviews) about ILP, should I terminate it?
2. Term plan VS whole life plans
3. Good amount of coverage at this point of my life?
4. Early critical illness vs late stage vs no CI coverage?
5. Other advices or opinion?
How should I proceed at this juncture? Seeking other opinions to help me get a clear decision. Thank you in advance to anyone giving me advice here.

You may not required a $1mil coverage at the moment, but CI is important. U may want to see what will be a good coverage amount that u need.

For Shield plan, if u are looking for full coverage till year 2021, u can get them before 29/03. If not, will recommend waiting till April for the new rider, as premium is substantially cheaper

 

[Crazypoorasian]

AXA FlexiProtector, although is an ILP, works differently than the other usual ILP. It gives the flexibility of increasing ur coverage or investment portion according to ur needs. But if u need the cash portion, a word of advice will be to surrender around age 60 - 70 (depending on BI), because the cost of insurance will be increasing sharply. Which is why another plan is required to supplement it, if ur budget allows.

Most people here would agree term life is better than whole life as well, especially when u already have a plan like flexiprotector. Not sure why the broker recommend u a whole life instead.

Am glad the AXA agent is providing sound advice to u

Thanks moejoseph.

I am still beginning to understand what ILPs are actually.

I have been reading some stuff about the Cons of ILPs. I'm starting to get worried.
How much do I have to worry about the performance of the funds?
How reliable is an ILP? Why are people discouraging ILPs?
How should I really use an ILP? Should I continue having it?

Have been reading these:
https:

//forums.hardwarezone.com.sg/money-mind-210/axa-inspire-flexi-protector-4777889.html#post87897794

 

[Crazypoorasian]

You may not required a $1mil coverage at the moment, but CI is important. U may want to see what will be a good coverage amount that u need.

For Shield plan, if u are looking for full coverage till year 2021, u can get them before 29/03. If not, will recommend waiting till April for the new rider, as premium is substantially cheaper

hey moejoseph,

i cant reply your PM cos i just joined this forum, but i'll reply here:

Oh thanks for your reply. just saw this.

After reading a little bit more about insurance, the general view is that hospitalization and shield rider plans are really the first plans one should get. Thus, I am pretty disappointed with the current agent in letting me purchase the ILP as my first insurance plan. so about trusting the current agent.... i am thinking twice about it. lesson learnt, must be well-informed.

Thus I turned to this forum to seek opinion on my current situation. Also including seeking another broker to offer solutions.

At this point after reading multiple point of views, it really does get confusing haha. Im still figuring things out. I guess eventually i'll just have to develop my own POV and proceed with getting the coverage i need. meanwhile i'll try to read more

 

[ahboi95]

Hi guys in regards to travel insurance, if i am currently studying a degree course and am planning to go for overseas internship for 8-9 months, how do i go about purchasing the travel insurance? When i try to do so, it does not allow me to select further dates till December.


Also on a side note, for endowment plans, how are the rates of non-guaranteed returns determined? E.g. Etiqa's ELASTIQ plan after 3 years they mentioned that it will be based on "prevailing rates". Are these rates like SIBOR or something?

 

[oceanicmanta]

@crazypoorasian

- get your hospitalisation plan sorted

- if u r eligible for Mindef GTL, u shld get yourself covered or increase your cover with them ... u can elect to sign up for Living Care cover as well ... the premiums at your age are very affordable, up to age 65. $1m Term Life is just $420 per year, level premium up to 65yo

- You can get insured with the above first while taking more time to research other insurance products.

- look into Disability Income Insurance, if budget permits

- For Critical illness cover, look into MultiPay products eg from Aviva or Tokio Marine if those meet your needs & budget

- Term vs Whole life ... do u really need to be covered for your entire life & keep paying premiums ? Cash values from WL may seem attractive but it takes a really really long time for the Cash values to build (ie over 20yrs before decent returns). Usually, riders are attached to WL plans, resulting in higher total premiums ... but rider premiums r not invested & dont have cash values.

- Don't commit into whole life now if you dont know what you need or what u r getting into ... your insurance needs will change over time as well

- I don't know FlexiProtector. Check if there are any riders attached whose premiums are not being invested. Which fund r you investing in ?
Generally, I dont think ILPs r good ideas given high fees, big spreads, numerous charges etc

 

[BBCWatcher]

- look into Disability Income Insurance, if budget permits

It’s a lot easier to afford DII if you aren’t buying less important or unimportant insurance first.

Hi guys in regards to travel insurance, if i am currently studying a degree course and am planning to go for overseas internship for 8-9 months, how do i go about purchasing the travel insurance?

You don’t. Travel insurance is not appropriate for an overseas internship of 8 to 9 months, not for primary purposes anyway. If you check the policy terms you’ll probably find that you’re only covered for short (e.g. 45 day) trips.

“Travel insurance” is usually a bundle of coverage, often including travel medical insurance (which may or may not cover medical repatriation and medical evacuation), trip cancellation, baggage loss, and travel inconvenience. It’s only the medical coverage that’s particularly important. If you charge the air ticket to certain credit cards (even if it’s somebody else’s credit card offering that coverage, and you pay that person back), then all the rest may already be included. There’s also some airline coverage (some baggage loss compensation for example), and every credit card protects you against airline bankruptcy.

It’s common that you’ll be required to enroll in the destination country’s medical system, or the employer will provide some coverage. What’s the destination country?

Also on a side note, for endowment plans, how are the rates of non-guaranteed returns determined? E.g. Etiqa's ELASTIQ plan after 3 years they mentioned that it will be based on "prevailing rates". Are these rates like SIBOR or something?

No. They’re based on whatever the insurance company can manage to obtain from its investment fund, minus a typically large investment management fee.

 

[Zenest]

Hi guys in regards to travel insurance, if i am currently studying a degree course and am planning to go for overseas internship for 8-9 months, how do i go about purchasing the travel insurance? When i try to do so, it does not allow me to select further dates till December.


Also on a side note, for endowment plans, how are the rates of non-guaranteed returns determined? E.g. Etiqa's ELASTIQ plan after 3 years they mentioned that it will be based on "prevailing rates". Are these rates like SIBOR or something?

Travel insurance is not suitable for your overseas internship as mentioned be BBCwatcher.
The insurance you may be looking for is Student Exchange or Overseas Industrial Attachment insurance. Google for it and you will find various insurers offering such insurance. Check to see if they are suitable.

Insurers invest the premiums they collect in a variety of instruments that may provide guaranteed and non-guaranteed returns for the endowment policies (participating funds) you purchase. In the policy benefit illustration, you should see a guaranteed and non-guaranteed column for your surrender cash values with the projected % returns as column heading. Read the policy summary (pages after all the numbers) for a better understanding the instruments they invest in.
Pls note that the non-guaranteed projected investment % returns are what the insurers get. % returns you get will be lower after the relevant product cost. You can use the projected cash values to work out your % returns.
Eg. The projected investment returns by insurer is 4.75%p.a. Returns to you as a policy holder for every dollar you put into the endowment policy may be lesser at 4%p.a.
Also, projected returns are meant to be a guide. Actual returns may be higher or lower.

Below is a compilation of actual returns achieved by various insurers for their participating funds for your ref.

 

[Zenest]

Need some advice here to decide the most logical personal insurance strategy.

I am 27 y/o. Currently working. Have 2 parents at 58 and 68. Take home pay around 3k.

A year ago, I decided to get some insurance in place for myself. Didn’t know much about insurance.

Was sold an ILP plan as my first insurance plan (didn’t have any except for the mindef aviva coverage).

The agent highly encouraged it(explaining benefits of flexibility and ability to get money back). So, I ended up buying it.

What I got was an AXA flexiprotector plan(ILP). A 200K for Death and TBD coverage with late stage Critical illness.
I am paying 200/month.

Now, hoping to complete my coverage, I went to ask for some advice from the same agent and this is the proposed plan:
AXA 30 years Term plan – $736/yr (1mil coverage)
Early Stage critical illness - $778/yr (100k coverage)
Shield Plan A - $368
Shield Plan A Rider - $412

Feeling that this plan was quite straining on my budget, I consulted a broker who gave a totally different advice: Buy Whole life plan and wait for insurance companies to come up with better co-payment shield offers (after 1st april)
The plan was:
Aviva wholelife plan – 1535/yr (premium term 25 yrs, 200k enhanced cover)
TPD – 100/yr (premium term 25 yrs, 200k enhanced cover)
Early critical illness – 1360/yr (premium term 25 yrs, 200k enhanced cover)

Mainly these questions:
1. Having read so much (negative reviews) about ILP, should I terminate it?
2. Term plan VS whole life plans
3. Good amount of coverage at this point of my life?
4. Early critical illness vs late stage vs no CI coverage?
5. Other advices or opinion?
How should I proceed at this juncture? Seeking other opinions to help me get a clear decision. Thank you in advance to anyone giving me advice here.

1. Different plans have different features that is suitable for different profiles of people.
If you look at ILP as an insurance policy (and not an investment plan), you will realise it is similar to traditional life insurances with high coverage with returns over time. There are pros and cons to the ILP plans.
It's probably suitable for a young person who is comfortable with the volatility of investments, needs the insurance coverage till age 60s, and intend to surrender the plan then and use the accumulated cash values for retirement purpose.

2. a) It may depends on your investment knowledge. If you are very sure that you can derive better returns on your own than what the insurance plans can provide, you may want to consider Term insurance.
If you don't mind accumulate wealth with insurance plans, than you can also consider participating whole life insurance plans.
b) if you have limited budget and high insurance needs, you may want to start with term insurance first as they are cheaper (check out SAF Group ins, if you are eligible to apply).

3. Everybody have different financial liabilities.
a) If you have more assets than you financial liabilities, technically you do not need any insurance cover.
b) A single person with nobody counting on him for financial contribution may just need to cater for his personal financial liabilities. Another with parents or younger siblings counting on him may require more.
Sit down with a financial consultant and ask him to derive your insurance needs. He will go through a series of questions with you to arrive to the insurance coverage required.

4. In order of priority, 1) CI, 2) Early CI (where budget permits).

5. IMHO, the CPF Hospitalisation insurance should be the first insurance plan anybody gets. Its affordable and the premiums for basic plan is paid from CPF Medisave (no cash outlay for a young person).
Co-Payment insurance rider is all but a small part of the whole hospitalisation insurance plan. No need to wait for a better deal because of it.
Get the basic shield plan in place first, add on the rider anytime later.
If you health deteriorates from now till then, you may not be insurable for your existing medical conditions anymore.

How to proceed:
1) Read up from threads what is likely the best shield plans available and get the basic in place asap.
2) Ask people around you that you trust for recommendations of a good financial consultant (FC).
3) Derive your insurance needs with the FC.
4) Discuss with FC your budget and plan preference.
5) FC will come up with his recommendations.
6) No need to sign on first meeting of recommendation if you are not comfortable. Take your time to digest info before deciding on suitable plans. Make sure the premiums you choose are sustainable comfortably long term.

For your consideration.

 

[BBCWatcher]

The insurance you may be looking for is Student Exchange or Overseas Industrial Attachment insurance. Google for it and you will find various insurers offering such insurance. Check to see if they are suitable.

Maybe. It's important to understand what the destination country is first. Countries vary in what they require and provide.

 

[ahboi95]

Travel insurance is not suitable for your overseas internship as mentioned be BBCwatcher.
The insurance you may be looking for is Student Exchange or Overseas Industrial Attachment insurance. Google for it and you will find various insurers offering such insurance. Check to see if they are suitable.

Insurers invest the premiums they collect in a variety of instruments that may provide guaranteed and non-guaranteed returns for the endowment policies (participating funds) you purchase. In the policy benefit illustration, you should see a guaranteed and non-guaranteed column for your surrender cash values with the projected % returns as column heading. Read the policy summary (pages after all the numbers) for a better understanding the instruments they invest in.
Pls note that the non-guaranteed projected investment % returns are what the insurers get. % returns you get will be lower after the relevant product cost. You can use the projected cash values to work out your % returns.
Eg. The projected investment returns by insurer is 4.75%p.a. Returns to you as a policy holder for every dollar you put into the endowment policy may be lesser at 4%p.a.
Also, projected returns are meant to be a guide. Actual returns may be higher or lower.

Below is a compilation of actual returns achieved by various insurers for their participating funds for your ref.

Wow thanks for the detailed explanation! May i know where did you get that image? It doesnt seem to have Etiqa in it :/ also, ive tried reviewing their product’s summary/contract, it doesnt say anything about the estimated returns?l after 3 years, just that at “prevailing rates”?

tiq.com.sg/product/universal-life-insurance-elastiq

Maybe. It's important to understand what the destination country is first. Countries vary in what they require and provide.

Oh i see the one that i would be heading to would be in Hong Kong! At the same time ill check with the my school as well

 

[Zenest]

Wow thanks for the detailed explanation! May i know where did you get that image? It doesnt seem to have Etiqa in it :/ also, ive tried reviewing their product’s summary/contract, it doesnt say anything about the estimated returns?l after 3 years, just that at “prevailing rates”?

tiq.com.sg/product/universal-life-insurance-elastiql

Table from Wen Consulting FB. Data derived from MAS.
https://www.facebook.com/WenConsulting/photos/a.192328897456036/1896707557018153/?type=3&theater

Elastiq is a Universal Life (UL) type plan.
Typically, crediting interest rates for UL type policies are primarily based upon the performance of the underlying investments of insurers, after allowing for the costs incurred by, and profits attributable to, the company. Performance of the underlying investments, and therefore the crediting interest rates, may be affected by any changes in the financial markets and economic conditions which include changes in interest rates, corporate bond spreads and asset default rates.
In simple words, the insurer decides the crediting rates.

For Elastiq, it refers to "Prevailing Market Rates". I could not find any reference of "Market" in their writeup as well. The rate offered by all UL policies in singapore?
Perhaps any bro in the know can chip in here.

 

[m0n0n0ke]

I am still holding an endowment plan. Is it worth?

 

[Zenest]

I am still holding an endowment plan. Is it worth?

Generally, if u check “yes” to the 2 points below, u can consider keeping endowment plan. If “no” to any of the points, further consult a Financial Consultant u trust on the usefulness of plan to u, and consider dropping plan if he cannot convince u otherwise.
Pls note to early termination of insurance plans may result in u losing whole or part of your savings.

1) you want a systematic and organised way of accumulating wealth.
2) u cannot generate better returns than the endowment plan on your own (accounting for early termination losses if applicable).

For your consideration.