Getting started with insurance

[roger595]

Any agents ever requested CBS report ?

Just purchased some insurance , agent say required by insurance company. Wonder why as this should be privileged info and even if required , should be online authorization ?

None ?

 

[boroangel]

Does Disability Income insurance cover you if you are employed and working overseas?

 

[BBCWatcher]

Does Disability Income insurance cover you if you are employed and working overseas?

It depends on the policy, and you need to check the fine print. Great Eastern seems to be the most tolerant of overseas postings, but once you hit the two year mark even they could drop you.

 

[xtwis7]

You can still be covered provided the country that you’re going to be posted in is one of the approved countries in the insurer’s list.

There may be additional loading as well. All will depend on the terms of your employment overseas. Above information is based on GE’s PayAssure.

Does Disability Income insurance cover you if you are employed and working overseas?

 

[linbeh]

I’m considering insurance for my wife at the age of 34 on LTVP. What I read here is ILP is no go. Whole life insurance is 1k more than ILP and ILP is 400 more than term life insurance. We’re definitely getting hospitalization plan on top of either whole life or term life (probably not going for ILP).

While I consider term life insurance, I’m wondering for those who got term life, are you all not worried after say 20 years, when the term life insurance ends, anything along the line of CI happens you have no coverage? How do you all intend to cover after that 20 years end, wouldn’t renewing coverage be too expensive?

We’re expecting a child. I’m covered under whole life, would it be more logical to cover my wife whole life or term life?

My dilemma is whole life is a good 1.4k more than term life. But term life when it ceases, she will be quite old at 55 then renewing would be very expensive i suppose. Please advise. Thank you so much

 

[boredboiboi]

I’m considering insurance for my wife at the age of 34 on LTVP. What I read here is ILP is no go. Whole life insurance is 1k more than ILP and ILP is 400 more than term life insurance. We’re definitely getting hospitalization plan on top of either whole life or term life (probably not going for ILP).

While I consider term life insurance, I’m wondering for those who got term life, are you all not worried after say 20 years, when the term life insurance ends, anything along the line of CI happens you have no coverage? How do you all intend to cover after that 20 years end, wouldn’t renewing coverage be too expensive?

We’re expecting a child. I’m covered under whole life, would it be more logical to cover my wife whole life or term life?

My dilemma is whole life is a good 1.4k more than term life. But term life when it ceases, she will be quite old at 55 then renewing would be very expensive i suppose. Please advise. Thank you so much

Your quote of wholelife is from which company? I am able to help you quote, the premium might be be as high as u gotten, i would max out the multiplier/booster so your premium will be lower than expected. What is the coverage your are looking at for your wife, i can do a soft quote here and post the premium of the wholelife plan quote you have. Am sure that i am able to provide some good quote out for you which i have been doing actively here.

 

[BBCWatcher]

I’m considering insurance for my wife at the age of 34 on LTVP. What I read here is ILP is no go. Whole life insurance is 1k more than ILP and ILP is 400 more than term life insurance. We’re definitely getting hospitalization plan on top of either whole life or term life (probably not going for ILP).

Disability Income Insurance? I feel I ought to shout from the rooftops about that one.

While I consider term life insurance, I’m wondering for those who got term life, are you all not worried after say 20 years, when the term life insurance ends, anything along the line of CI happens you have no coverage? How do you all intend to cover after that 20 years end, wouldn’t renewing coverage be too expensive?

I'm quoting this text because I'm going to try to answer it in a moment. But first....

We’re expecting a child. I’m covered under whole life, would it be more logical to cover my wife whole life or term life?

The amazing thing about children is that they grow up, at least chronologically. Typically they finish their educations, start their careers, and then they've left the nest. Term life insurance lines up beautifully with that typical reality.

Of course I'm concerned about children...and nieces, nephews, siblings, etc. The best thing I can do is try to empower them to be as strong as they can be on their own, because they surely will be on their own at least at some point. Everyone is mortal, after all.

One problem -- and it is a problem -- with whole life insurance is that it's designed to pay out only when I'm gone, which is at some arbitrary point in time that has no association with when children and grandchildren actually need resources. Dogged savings and prudent investing are different and much more flexible. Something else called a life annuity, a.k.a. longevity insurance -- CPF LIFE is the premier example in Singapore -- helps solve the "how do I help my kids and grandkids (with lifelong gifts)" part of the equation.

Whole life insurance is getting less popular. Perhaps it had some more merit in the past when there was no effective, reasonable way for "ordinary people" to invest prudently. Back then an insurance company was about the only choice available, even if it was a high cost choice. Nowadays, the world has changed. Whole life insurance could also make some sense when there really was no term, when men (in particular men) worked their entire lives, or at least tried, died on the job, and left widows. OK then, whole life insurance supported their widows; it made some sense. But now Singaporeans are at or near the top of the global longevity rankings, and they at least plan not to need to work until age 92 or whatever. Demographic realities have changed, too.

What hasn't changed is that the insurance industry salesforce makes a hell of a lot of money selling whole life insurance products. I also allow for some special exceptions (see below), but in general it's an inappropriate product.

My dilemma is whole life is a good 1.4k more than term life. But term life when it ceases, she will be quite old at 55 then renewing would be very expensive i suppose.

Did you know that cash and other liquid assets can do everything an insurance company payout can do? An insurance company payout is only cash. Great Eastern, Prudential, Aviva, AIA, AXA... none of them are paying benefits in the form of human organs, for example. They can only pay cash, if they pay.

So how about taking the S$1,400 per year that you would save on insurance, actually saving it every year, and prudently investing it? Do that for 30 years at even 2% per year compounded annually and you end up with S$58,000 (2050 dollars). Of course you can reliably do better than 2%/year if you're prudently investing -- insert whatever assumption you wish -- but this is just an example.

Now, if you are unable to save doggedly because you simply lack the discipline, and/or if you're going to "invest" your savings at the dog track, OK, maybe you're among the people who need an insurance company's premium bill forcing you to prepare for the future. In that case, maybe "Buy Term, Invest the Rest" is not going to work for you operationally. But in terms of pure financial comparisons, BTIR makes perfect sense.

 

[maple96]

One problem -- and it is a problem -- with whole life insurance is that it's designed to pay out only when I'm gone, which is at some arbitrary point in time that has no association with when children and grandchildren actually need resources.

Fake news! Whole life insurance dun just pay when u die only. Limpeh, U have whole life insurance, u should know this is fake news!

Whole life insurance is getting less popular. Perhaps it had some more merit in the past when there was no effective, reasonable way for "ordinary people" to invest prudently. Back then an insurance company was about the only choice available, even if it was a high cost choice.

Fake news! Some people bought whole life because they want surrender value because insurance is pian chiak, chances are they will survive, so they prefer WL to term, just in case it happens. It was not meant to be an investment at all. It is about effective risk management in life.

What hasn't changed is that the insurance industry salesforce makes a hell of a lot of money selling whole life insurance products.

Fake news! Insurance agents make more money from term life policies than WL policies, go ask an agent willing to share commission rates with u. It was shared in hwz before. In addition, insurers also prefer to selll term than WL due to regulation changes in recent years.

In that case, maybe "Buy Term, Invest the Rest" is not going to work for you operationally. But in terms of pure financial comparisons, BTIR makes perfect sense.

It is an irony when u are told not to mix insurance with investment, yet many are proposing BTIR to recover your cost/expense in Term life policies. High risk high returns when u invest in equities, how can u compare it to whole life which is a bond-type asset, no downside just upside? Worst still they are proposing annuities, u mean such policies insurers/agent dun earn more commissions, and u incur less cost than WL?

To each his own. Do your own due diligence!

 

[tangent314]

I’m considering insurance for my wife at the age of 34 on LTVP. What I read here is ILP is no go. Whole life insurance is 1k more than ILP and ILP is 400 more than term life insurance. We’re definitely getting hospitalization plan on top of either whole life or term life (probably not going for ILP).

Yes, definitely have a hospitalization plan and say far far away from ILPs. Is your wife working? If she is not working, then it is actually more important to increase life insurance coverage for YOURSELF rather than to take up a life insurance on her. If something happens to her, you will be very sad, but you won't be in financial distress. If something happens to you, however, you want to make sure that she will be well taken care of.

While I consider term life insurance, I’m wondering for those who got term life, are you all not worried after say 20 years, when the term life insurance ends, anything along the line of CI happens you have no coverage? How do you all intend to cover after that 20 years end, wouldn’t renewing coverage be too expensive?

CI coverage isn't really all that necessary. If you are unfortunate enough to be hit with a CI, most of your bills will be covered by your hospitalization plan while the remainder is generally affordable and you can draw from your medisave. There's usually no loss of income if you remain within your hospitalization leave entitlement. When your CI coverage ends at 65, you're probably around retirement age already, with a good amount of savings.

We’re expecting a child. I’m covered under whole life, would it be more logical to cover my wife whole life or term life?

Term life of course. When you reach 65, odds are your children will already be graduated and have started working, so if anything happens to you, well, they will be very sad, but they are able to continue on their own.

My dilemma is whole life is a good 1.4k more than term life. But term life when it ceases, she will be quite old at 55 then renewing would be very expensive i suppose. Please advise. Thank you so much

Take term life to 65 or 70. As have been explained, there's usually no real need to be covered beyond that.

 

[BBCWatcher]

Ah, a troll is awake today.

Whole life insurance dun just pay when u die only.

Right, and I used the word "designed." Yes, there's a surrender value...but it's not well designed for surrender. A diligent saver and prudent investor will reliably do better.

The rest of your post mistakenly flows from there.

Insurance agents make more money from term life policies than WL policies, go ask an agent willing to share commission rates with u.

No. Evidently you're not aware that the commission rate is multiplied by...something. (What could that something be?)

 

[boredboiboi]

Ah, a troll is awake today.


Right, and I used the word "designed." Yes, there's a surrender value...but it's not well designed for surrender. A diligent saver and prudent investor will reliably do better.

The rest of your post mistakenly flows from there.


No. Evidently you're not aware that the commission rate is multiplied by...something. (What could that something be?)

Maple96 is right that term commissions rate is higher. And what multiplied do you mean?

 

[tangent314]

Your commission received is rate multiplied by the premium.

A term life plan for $100k coverage will pay you a lot more commission than a whole life plan for $100k coverage, despite the commission rate for term life plan being higher than whole life plan, since the premium for the whole life plan is a LOT higher than that of the term life plan.

 

[BBCWatcher]

So, boredboiboi, I believe you're an insurance salesperson who receives a sales commission when you sell a policy, right? Let's try this exercise....

....Consider a healthy male nonsmoker, age 30 next birthday. Then consider two life insurance policies, both without any special commission-related promotions (such as special incentive campaigns or new product intro commission campaigns), any riders (although we may get to that in a moment), no group policy (such as MINDEF/SAF), no material divergence in carrier quality (not FWD v. Prudential), etc. Just two straight up life insurance policies that differ only in term v. whole. One ends at age 65, and the other doesn't.

* Term life insurance to age 65 with a $200,000 sum assured;
* Whole life insurance with a $200,000 sum assured.

Which of these two products generates a higher sales commission? Not a higher commission rate (a word I did not use), a higher commission, in absolute number of Singapore dollars?

Let me state up front that I don't think there's any particular problem with sales commissions per se as long as the consumer is aware of them and broadly how they work. So let's take this opportunity to educate consumers, shall we?

 

[maple96]

Only the dumb will focus/base their decision to buy an insurance policy on how much the agent will earn as they can't see the forest for the trees.

I am not here to teach u how to manage your own finances, your assets (eg WL) vs liabilities/expense. (eg Term). Good luck to your decision.

 

[xtwis7]

Given a same coverage, a term plan is definitely going to be cheaper than a whole life so in terms of pure commissions, a agent is always going to receive higher commissions from a whole life plan than a term plan.

Commissions are largely dependent on the type of the plans and also the tenure of the plans.

So, boredboiboi, I believe you're an insurance salesperson who receives a sales commission when you sell a policy, right? Let's try this exercise....

....Consider a healthy male nonsmoker, age 30 next birthday. Then consider two life insurance policies, both without any special commission-related promotions (such as special incentive campaigns or new product intro commission campaigns), any riders (although we may get to that in a moment), no group policy (such as MINDEF/SAF), no material divergence in carrier quality (not FWD v. Prudential), etc. Just two straight up life insurance policies that differ only in term v. whole. One ends at age 65, and the other doesn't.

* Term life insurance to age 65 with a $200,000 sum assured;
* Whole life insurance with a $200,000 sum assured.

Which of these two products generates a higher sales commission? Not a higher commission rate (a word I did not use), a higher commission, in absolute number of Singapore dollars?

Let me state up front that I don't think there's any particular problem with sales commissions per se as long as the consumer is aware of them and broadly how they work. So let's take this opportunity to educate consumers, shall we?

 

[linbeh]

Thanks for the advice. Very valuable. Yes i covered myself more than enough perhaps. I have a whole life plan with and disability income one also.

Yes, definitely have a hospitalization plan and say far far away from ILPs. Is your wife working? If she is not working, then it is actually more important to increase life insurance coverage for YOURSELF rather than to take up a life insurance on her. If something happens to her, you will be very sad, but you won't be in financial distress. If something happens to you, however, you want to make sure that she will be well taken care of.

CI coverage isn't really all that necessary. If you are unfortunate enough to be hit with a CI, most of your bills will be covered by your hospitalization plan while the remainder is generally affordable and you can draw from your medisave. There's usually no loss of income if you remain within your hospitalization leave entitlement. When your CI coverage ends at 65, you're probably around retirement age already, with a good amount of savings.

Term life of course. When you reach 65, odds are your children will already be graduated and have started working, so if anything happens to you, well, they will be very sad, but they are able to continue on their own.

Take term life to 65 or 70. As have been explained, there's usually no real need to be covered beyond that.

 

[roger595]

Any agents can advise smoking mechanics for hospitalization plans?

Scenario A
2017: Smoker Ah Tan buy hosp plan as non-smoker as he is considering to quit
2018: Ah Tan acci. informed doctor of smoking status during a ward stay
2019: Ah Tan finally quit smoking
2020: Ah Tan dio lung cancer

Claims likely rejected since smoking status ish on record?
Will it help or is it possible for Ah Tan to change insurance smoking status if he can turn back time to 2019?

Scenario B
2017: Non-smoker Ah Kow buy hosp plan as non-smoker
2018: Ah Kow started smoking due to work stress
2020: Ah Kow dio lung cancer

Reject also?

Coffeeshop talk with fwens but if really in such situation is jin scary

 

[xtwis7]

You’ll be surprised to know that hospitalisation plan doesn’t take into account whether the person is a smoker or not.

Only life insurance factors in the smoking risk as a loading on the base premium.

Could you be referring to the Critical Illness plan where you declare as a non-smoker but then started smoking again?

Any agents can advise smoking mechanics for hospitalization plans?

Scenario A
2017: Smoker Ah Tan buy hosp plan as non-smoker as he is considering to quit
2018: Ah Tan acci. informed doctor of smoking status during a ward stay
2019: Ah Tan finally quit smoking
2020: Ah Tan dio lung cancer

Claims likely rejected since smoking status ish on record?
Will it help or is it possible for Ah Tan to change insurance smoking status if he can turn back time to 2019?

Scenario B
2017: Non-smoker Ah Kow buy hosp plan as non-smoker
2018: Ah Kow started smoking due to work stress
2020: Ah Kow dio lung cancer

Reject also?

Coffeeshop talk with fwens but if really in such situation is jin scary

 

[BBCWatcher]

You’ll be surprised to know that hospitalisation plan doesn’t take into account whether the person is a smoker or not.

Not directly, but it could indirectly. It just depends on whether the claim relates to a pre-existing condition or not as the policy defines it. Here's Prudential's PRUshield definition, as an example:

1.8 What is not covered?
[....]Any pre-existing illnesses, diseases or impairments from which the life assured is suffering from prior to the Cover Start Date of the policy, unless they were declared in the proposal and specifically accepted by us. A pre-existing condition is the existence of any signs or symptoms for which treatment, medication, consultation, advice or diagnosis has been sought or received by the life assured or would have caused an ordinary prudent person to seek treatment, diagnosis or cure, prior to the Cover Start Date of this benefit or the date of reinstatement (if any), whichever is later....

So let's suppose you're a smoker, you're coughing up blood but ignore it, you sign up for an Integrated Shield plan, you're diagnosed with lung cancer requiring surgery, and you file a claim for your surgery. As I read that definition, the claim could be legitimately denied. You were coughing up blood prior to enrolling, and "an ordinary prudent person" should have gone to the clinic, at least, to get that checked out.

This is only an example. Of course it's possible for some smokers to enroll without pre-existing condition exclusions.

 

[xtwis7]

Not directly, but it could indirectly. It just depends on whether the claim relates to a pre-existing condition or not as the policy defines it. Here's Prudential's PRUshield definition, as an example:

In this extreme case yes then it constitutes a pre-existing condition. But for most smokers, whether social or heavy, if there are no signs and symptoms that can raise any alarms with your own body, one is generally safe.

For all we know, the smoker may already have a benign tumour in his lungs which could become malignant but it all depends on the information available at the point of application. If there were no signs and symptoms and no other medical examinations were requested by any doctor, one’s claim will be pretty clearcut. Should it even be rejected, the claim can be appealed against the insurer.