Getting started with insurance

[soneat]

May I ask how much is the expenditure if one is hit by CI ?

It depends on which CI. The common one is cancer. The fact is while H&S insurance can usually cover the medical and surgical cost, there are situations where certain (essential) treatment are neither covered nor subsidised, even if u go in as a subsidised patient. In such cases (which is getting more prevalent), the cost typically run well into the 6 digits by the time the patient pass on.

 

[hardwarezoner2]

It depends on which CI. The common one is cancer. The fact is while H&S insurance can usually cover the medical and surgical cost, there are situations where certain (essential) treatment are neither covered nor subsidised, even if u go in as a subsidised patient. In such cases (which is getting more prevalent), the cost typically run well into the 6 digits by the time the patient pass on.

Perhaps the patient could have passed on earlier ?

By the way, are you a financial advisor ?

 

[soneat]

Perhaps the patient could have passed on earlier ?

By the way, are you a financial advisor ?

I am not agent.

When you are sick, you do not have much choice. It's not as simple as you would just want to opt out of treatment due to the cost. In times of crisis, you would want choices - and insurance may provide you with some choices.

 

[boredboiboi]

Coverage is 250k. Until age 70 the amount starts to drop. Then it increases again a few years later (why?)

Yes it's a Prulife Multiplier flex plan. So there is multiplier (although I dunno what it really means).

Ya that is to boost ur coverage before age 70. U can screenshot the first few pages and share it and blankout ur particulars

This payout is to let u have a sum of money for lost of income during your working life. Hospital plan will covers your hospital bill.

 

[soneat]

Bottomline is the purpose of insurance is to provide financial protection against certain events (death, tpd, Co, eci, di, adl, etc) at certain life stages.

How much, for what and for how long.

Your prudential policy provides u with $ x, against death, tpd, ci, for your whole life.

If that's what u r looking for, u bought the right thing. Else if u r just looking at only the cash value near the end, then I think you bought the wrong product.

 

[hardwarezoner2]

I am not looking for DI as I think it rarely happens in reality.

My present Whole life policy has a CI rider attached.

I think I'm unnecessarily insured for Death as I have no dependents. As for TPD, I think it rarely occurs in reality as mentioned so I was not looking for that also.

So, I am only interested in CI.

My agent said that CI is available as a term policy by itself but I compared the premiums payable for the term policy vs my present whole life policy with CI rider (although the premium vs surrender value break even is around age 75), the latter seems to lose less money at age 70. So, I think it's still more cost effective to get the latter.

TBH, I really dislike the idea of insurance, especially term policies, cos you get back nothing if nothing happens.

 

[BBCWatcher]

I am not looking for DI as I think it rarely happens in reality.

Isn't that precisely what insurance is for: to help you (and/or your beneficiaries) cope with a rare but genuinely catastrophic event that you cannot possibly cope with on your own that a monetary payout would make better?

TBH, I really dislike the idea of insurance, especially term policies, cos you get back nothing if nothing happens.

That means the catastrophic event didn't happen -- your legs and arms still work, for example. It means you won! Would you really prefer experiencing the catastrophe?

 

[hardwarezoner2]

As much as I dislike it, the fact remains it's necessary cos otherwise the financial burden might be too much to bear for the individual and may lead to a big problem in society. So even the govt is having it on a compulsory nationwide level.

Insurance is an expensive game of chance. It is completely useless when nothing happens and the $$ will be like charity to the company and agents. It's more suitable to be played by people with dependents cos there is more liability. If you have little liability, I think you can consider not to be insured.

Imagine when you are in your 50s and 60s and healthy, your pay might not be so high as before...you need money to pay the bills and survive... there's a large sum sitting inside your insurance account (if you bought whole life).. if you are desperate, you would surrender the policy, which is what some people are doing. Whenever you surrender the policy, you would lose tens of thousands of dollars ! (refer to surrender value table)

So if you are a generally healthy person such as myself, would you want to give up your money like this ?

I feel that it'd be better that instead of pouring , I mean pouring hundreds of thousands of dollars away, why not put in the best effort to stay healthy? If something unfortunate does happen, I guess it's just God's will. Perhaps then, all the money you could have paid might be equal to all the medical bills added up?

 

[peacefulday]

As much as I dislike it, the fact remains it's necessary cos otherwise the financial burden might be too much to bear for the individual and may lead to a big problem in society. So even the govt is having it on a compulsory nationwide level.

Insurance is an expensive game of chance. It is completely useless when nothing happens and the $$ will be like charity to the company and agents. It's more suitable to be played by people with dependents cos there is more liability. If you have little liability, I think you can consider not to be insured.

Imagine when you are in your 50s and 60s and healthy, your pay might not be so high as before...you need money to pay the bills and survive... there's a large sum sitting inside your insurance account (if you bought whole life).. if you are desperate, you would surrender the policy, which is what some people are doing. Whenever you surrender the policy, you would lose tens of thousands of dollars ! (refer to surrender value table)

So if you are a generally healthy person such as myself, would you want to give up your money like this ?

I feel that it'd be better that instead of pouring , I mean pouring hundreds of thousands of dollars away, why not put in the best effort to stay healthy? If something unfortunate does happen, I guess it's just God's will. Perhaps then, all the money you could have paid might be equal to all the medical bills added up?

how about doing vc cash top up into cpf, once RA formed the remaining oa/sa act as a 'Term' coverage or bond, saving etc...

 

[Okenba]

As much as I dislike it, the fact remains it's necessary cos otherwise the financial burden might be too much to bear for the individual and may lead to a big problem in society. So even the govt is having it on a compulsory nationwide level.

Insurance is an expensive game of chance. It is completely useless when nothing happens and the $$ will be like charity to the company and agents. It's more suitable to be played by people with dependents cos there is more liability. If you have little liability, I think you can consider not to be insured.

Imagine when you are in your 50s and 60s and healthy, your pay might not be so high as before...you need money to pay the bills and survive... there's a large sum sitting inside your insurance account (if you bought whole life).. if you are desperate, you would surrender the policy, which is what some people are doing. Whenever you surrender the policy, you would lose tens of thousands of dollars ! (refer to surrender value table)

So if you are a generally healthy person such as myself, would you want to give up your money like this ?

I feel that it'd be better that instead of pouring , I mean pouring hundreds of thousands of dollars away, why not put in the best effort to stay healthy? If something unfortunate does happen, I guess it's just God's will. Perhaps then, all the money you could have paid might be equal to all the medical bills added up?

This is why it makes sense not to over insure, and also why many here would recommend term life over whole life (if you even need life insurance at all).

Insurance is the lock on your front door. Most of us have a simple lock, some have a front gate and lock that too. Some have the whole hog of security alarms connected to Cisco and maybe a safe at home as well.

If you don't get robbed. All of it is completely useless. That's why it makes sense not to just go out and get what everyone else is getting, but to actually know why you are getting it.

 

[hardwarezoner2]

With the introduction of Careshield life that provides lifetime payout (as compared to the soon to be replaced Eldershield) together with Medisave Care and even Elderfund, is Disability income still necessary ? Is TPD still a relevant feature in private insurance?

 

[hardwarezoner2]

how about doing vc cash top up into cpf, once RA formed the remaining oa/sa act as a 'Term' coverage or bond, saving etc...

U can voluntary contribute but u cannot take the money out of CPF means if you need money urgently one day...

 

[hardwarezoner2]

This is why it makes sense not to over insure, and also why many here would recommend term life over whole life (if you even need life insurance at all).

Insurance is the lock on your front door. Most of us have a simple lock, some have a front gate and lock that too. Some have the whole hog of security alarms connected to Cisco and maybe a safe at home as well.

If you don't get robbed. All of it is completely useless. That's why it makes sense not to just go out and get what everyone else is getting, but to actually know why you are getting it.

The fact remains that for term policies, the $$ u put in goes to the company if nothing happens to u. So in that respect, whole life plan makes more sense. However, it will make even more sense to buy it early. As the surrender value will then break even with premium payments at an earlier age. So you can surrender the policy and get the money when you get older (when you might be earning less than before)

 

[Okenba]

The fact remains that for term policies, the $$ u put in goes to the company if nothing happens to u. So in that respect, whole life plan makes more sense. However, it will make even more sense to buy it early. As the surrender value will then break even with premium payments at an earlier age. So you can surrender the policy and get the money when you get older (when you might be earning less than before)

Question. Do you know the difference you pay for whole life versus term life for a similar coverage?

Did you know that if you bought term and invested the rest in a simple world index you would have earned much more than what your whole life would have returned you?

If nothing else, I think you should find out the difference you pay between whole life and term life. You may also want to read up more about DII since many of us have mentioned several times that it is different from TPD.

 

[hardwarezoner2]

Question. Do you know the difference you pay for whole life versus term life for a similar coverage?

Frankly, you don't sound very open to a discussion, in which case, not much point wasting words. For someone who doesn't seem to have read up very much on insurance, you seem very sure of your opinions.

If nothing else, I think you should find out the difference you pay between whole life and term life.

Yes I am aware. So your point is ?

 

[Okenba]

Yes I am aware. So your point is ?

It's okay. I edited my previous post as I think I can be kinder in my words. In any case, do what you please. I think I've said enough.

I spent way too much money on whole life for many years and I wish someone had told me about term life earlier. (I paid >8x my current Term Life Premiums for half the coverage.)
Perhaps you're different. Shrug.

Edit: For illustration.
https://blog.moneysmart.sg/life-insurance/life-insurance-singapore/#whole-life-premium

If I compared the more expensive Term Life ($840/yr) vs the less expensive Whole life ($10k/yr).
If you took the $9k+ difference in premiums, and put it into a Savings Account (not even invested) that yields 1% interest. At the end of 30 years, you would have roughly $320k in your bank account.

At 2.5% (OA interest, if you could somehow get it into OA. Accrued interest maybe), it would be about $400k.

At 4% (SA interest. Not really practical as you can't RSTU past FRS. But just to illustrate.), it would be $515k.

S&P past 60 years avr returns is 8% pa. That would give you slightly more than $1m.

Maybe that's less than your surrender value. I dunno.

 

[hardwarezoner2]

It's okay. I edited my previous post as I think I can be kinder in my words. In any case, do what you please. I think I've said enough.

I spent way too much money on whole life for many years and I wish someone had told me about term life earlier. (I paid >8x my current Term Life Premiums for half the coverage.)
Perhaps you're different. Shrug.

Edit: For illustration.
https://blog.moneysmart.sg/life-insurance/life-insurance-singapore/#whole-life-premium

If I compared the more expensive Term Life ($840/yr) vs the less expensive Whole life ($10k/yr).
If you took the $9k+ difference in premiums, and put it into a Savings Account (not even invested) that yields 1% interest. At the end of 30 years, you would have roughly $320k in your bank account.

At 2.5% (OA interest, if you could somehow get it into OA. Accrued interest maybe), it would be about $400k.

At 4% (SA interest. Not really practical as you can't RSTU past FRS. But just to illustrate.), it would be $515k.

S&P past 60 years avr returns is 8% pa. That would give you slightly more than $1m.

Maybe that's less than your surrender value. I dunno.

My current whole life plan covers Death, TPD, TI and CI (as a rider)

I'm only interested in CI so my agent told me it is available as a term policy but the premiums are only only $100 different for the same coverage.

The only thing that bugs me now is that the break even surrender value is quite late around 75 cos I bought it late.

 

[Okenba]

My current whole life plan covers Death, TPD, TI and CI (as a rider)

The last few pages of the 50 page policy document compared between buying a whole life plan vs buying a term plan. The costs are only $200 different.

I'm only interested in CI so my agent told me it is available as a term policy but the premiums are only only $150 different.

The only thing that bugs me now is that the break even surrender value is quite late around 75 cos I bought it late.

Is your best effort really to just trust the entity that has the most to gain by getting you to buy Whole Life instead of Term Life? Even at $200/mth difference, you realise that is almost half price. But I don't think it is just $200/mth difference. (Disclaimer: Not an insurance agent.)

250k coverage at 450/mth yes?

I'm not an insurance agent, but here's a simple comparison you can make.
https://www.aviva.com.sg/en/mindef-and-mha/group-term-life/

For Term Life: $10.25/mth for 250k coverage
For CI (41-45yo): $24.75/mth for 250k coverage
Total: $35/mth for equivalent coverage.

MINDEF Term life isn't for everyone though. I'm sure there are proper agents in the forum who can do you a quote for term life if you want to make some comparison.

 

[hardwarezoner2]

Is your best effort really to just trust the entity that has the most to gain by getting you to buy Whole Life instead of Term Life? Even at $200/mth difference, you realise that is almost half price. But I don't think it is just $200/mth difference. (Disclaimer: Not an insurance agent.)

250k coverage at 450/mth yes?

I'm not an insurance agent, but here's a simple comparison you can make.
https://www.aviva.com.sg/en/mindef-and-mha/group-term-life/

For Term Life: $10.25/mth for 250k coverage
For CI (41-45yo): $24.75/mth for 250k coverage
Total: $35/mth for equivalent coverage.

MINDEF Term life isn't for everyone though. I'm sure there are proper agents in the forum who can do you a quote for term life if you want to make some comparison.

MINDEF ? I have finished my reservist.

Sorry I made some edits in my previous post. The difference is only $100 for the same coverage. Or maybe I should lower my coverage to 100k instead.

 

[hardwarezoner2]

It's okay. I edited my previous post as I think I can be kinder in my words. In any case, do what you please. I think I've said enough.

I spent way too much money on whole life for many years and I wish someone had told me about term life earlier. (I paid >8x my current Term Life Premiums for half the coverage.)
Perhaps you're different. Shrug.

Edit: For illustration.
https://blog.moneysmart.sg/life-insurance/life-insurance-singapore/#whole-life-premium

If I compared the more expensive Term Life ($840/yr) vs the less expensive Whole life ($10k/yr).
If you took the $9k+ difference in premiums, and put it into a Savings Account (not even invested) that yields 1% interest. At the end of 30 years, you would have roughly $320k in your bank account.

At 2.5% (OA interest, if you could somehow get it into OA. Accrued interest maybe), it would be about $400k.

At 4% (SA interest. Not really practical as you can't RSTU past FRS. But just to illustrate.), it would be $515k.

S&P past 60 years avr returns is 8% pa. That would give you slightly more than $1m.

Maybe that's less than your surrender value. I dunno.

How is it that you could have paid more for the whole life plan and yet get less coverage ???