How much insurance is enough

[davidtanwei]

Hi all,

I had this aia investment unit trust insurance. I brought it about 23 years already. I was paying like $100 every month. All in all, I found that if I surrender this policy that includes it accumulated revisionary bonus of about $2000 plus. I did not make a major loss. Probably some plus profit side.
Now every month, I putting in 100 dollar and aia put in 5 dollar. So in total, $105
Goes to my unit trust. It seem in early years, alot goes to admin fees.
If surrender, maybe about $25k. However, my coverage is also like 25k. Is it possible? So if any thing happen, I get 25k compensation and my 25k still no touch... The reason I want surrender is abit piss by my agent.
Last time say Investment will grow. Talk dragon phoenix untill good investment. Say got bonus and next time can used. Now I want take bonus only, ask him to do. Go say don't take unless really need. Put there better interest.
What would u guy do? Surrender better?

I already got one whole life every month 250 dollars.. Then some what some gold shield.. What rider plan.. Some use medishield to deduct. Some little cash...

 

[blurpandasg2014]

Mayb u can summarise how much coverage u are having for life insurance so we can advice better.

Also list down if u have any dependents

 

[Geeezz]

sounds like ilp lai de

it's better if u can list dwn all the coverage u hv first

 

[davidtanwei]

Yes.. Its is ilp... Its been 20 year already... Just thinking of surrendering this policy...

 

[glenlaw]

For ILP, as your age increases, the mortality charge will increase as well. Affecting the cash value. It would be advisable to reduce the sum insured after 40.

 

[davidtanwei]

What mortality charge.. Its still every month 105 dollar. Averaging the price. I already 44 years old. What you mean reduced the sum insured

 

[Geeezz]

in general, it make sense to use the money that yields little int (bank savings acc) compared to money that yields higher int (investments) so what ur agent says make sense.


for coverage I personally use 10 times my yearly expenses including inflation


if you just dun like ur agent, go to a roadshow and meet another agent then change ur policy to that agent lor, aia gt sho many roadshow nowadays

oh and in the long run, ilp will always lose money just saying

 

[havetheveryfun]

need to pay until how long? 25 years ?
or till you die ?

 

[davidtanwei]

No lock... My policy gone through two financial crisis cycle. Now still can end up on plus side.... If don't surrender now... Most probably have to continue another 12 year if there is a crisis

 

[havetheveryfun]

No lock... My policy gone through two financial crisis cycle. Now still can end up on plus side.... If don't surrender now... Most probably have to continue another 12 year if there is a crisis

just do what u wanted to do in the first place? just withdraw the bonus and keep the policy running ?

since after u have paid for so long, it seems like it is already able to pay for itself.. no point to stop it. if ur agent doesnt want to help you withdraw the bonus, can always go down to the headquarters to do it yourself.

 

[zeroX26]

No lock... My policy gone through two financial crisis cycle. Now still can end up on plus side.... If don't surrender now... Most probably have to continue another 12 year if there is a crisis

How is it a plus when you have paid $100 a month for 23 years (276 months) for a total sum of 27600 and only to get back 25k upon surrender

 

[davidtanwei]

I can't remember exact year and month.
That time I see the letter and do some calculation based on if surrender. Its was
Not negative

 

[tangent314]

Ok this is what happens when you make your monthly premium payment of $100 into the ILP. AIA gives you a 5% bonus (after the 10th year IIRC). However there is a 5% bid-offer spread, so you only receive 0.95 * 105 = $99.75 worth of UTs.

After your monthly contribution is used to purchase the UTs, AIA then deducts the mortality charges from your UT holdings. This is used to pay for your life insurance portion, and the price goes up with your age.

The UTs internally also charge all sort of fees, and total up to about 1.5% per year.

ILPs in generally a terrible products. You will do much better by purchasing a term life insurance, and then invest in ETFs with low annual fees instead of UTs.

 

[coconut1]

I was in the same situation as you and I had 2 ILPs with AIA, paying about $200+/month/policy. The coverage was $500k x 2 for life, PA and critical diseases.

When I was 43 years old, I surrendered one policy and reduced the coverage to the other to $200k However, 1 year prior to surrendering, I purchased Mindef Aviva Group Term Insurance, with coverage life $1m, PA $600k, critical diseases $300k and premium was about $200+/mth.

The rationale:
As you pass 40 years old, most of the money you pay to AIA goes to insurance component and almost none for investment. This is in contrast to younger years 20-40, where most goes to investment and you can get high coverage relatively cheaply and also instil a disciplined regular investment plan and therefore almost able to get cheap/free insurance with its returns.

Hi all,

I had this aia investment unit trust insurance. I brought it about 23 years already. I was paying like $100 every month. All in all, I found that if I surrender this policy that includes it accumulated revisionary bonus of about $2000 plus. I did not make a major loss. Probably some plus profit side.
Now every month, I putting in 100 dollar and aia put in 5 dollar. So in total, $105
Goes to my unit trust. It seem in early years, alot goes to admin fees.
If surrender, maybe about $25k. However, my coverage is also like 25k. Is it possible? So if any thing happen, I get 25k compensation and my 25k still no touch... The reason I want surrender is abit piss by my agent.
Last time say Investment will grow. Talk dragon phoenix untill good investment. Say got bonus and next time can used. Now I want take bonus only, ask him to do. Go say don't take unless really need. Put there better interest.
What would u guy do? Surrender better?

I already got one whole life every month 250 dollars.. Then some what some gold shield.. What rider plan.. Some use medishield to deduct. Some little cash...

 

[SBC]

Should not get any ILP in the first place.

I had surrendered mine about 10 years into my first ILP. Made some profit though but not specular.

 

[maple96]

Hi all,

I had this aia investment unit trust insurance. I brought it about 23 years already. I was paying like $100 every month. All in all, I found that if I surrender this policy that includes it accumulated revisionary bonus of about $2000 plus. I did not make a major loss. Probably some plus profit side.
Now every month, I putting in 100 dollar and aia put in 5 dollar. So in total, $105
Goes to my unit trust. It seem in early years, alot goes to admin fees.

If surrender, maybe about $25k. However, my coverage is also like 25k. Is it possible? So if any thing happen, I get 25k compensation and my 25k still no touch...

If u surrender, u get 25k surrender/cash value, policy terminates, no more insurance cover, ie if anything happens after, no compensation.

What does the policy cover - death, tpd, critical illness ? Do u still need this insurance cover for your dependents? Do u have other insurance policy to cover these?


The reason I want surrender is abit piss by my agent.
Last time say Investment will grow. Talk dragon phoenix untill good investment. Say got bonus and next time can used. Now I want take bonus only, ask him to do. Go say don't take unless really need. Put there better interest.
What would u guy do? Surrender better?

I already got one whole life every month 250 dollars.. Then some what some gold shield.. What rider plan.. Some use medishield to deduct. Some little cash...

See my comments above. If u confirm u will get 25k if u surrender now and it is nore than the premiums u paid to date, u dun need the insurance anymore or have other insurance policy to cover your needs, then I would choose to terminate and invest the money elsewhere. If u dun need the money, consider topping up your CPF SA which gives u guaranteed 4% (as of now) which is much better.

If the stock market is going for a downturn, then there is a possibility u might lose money in this ILP.

What is pass is past, look forward to explore how u can make that 25k make more money for u.

 

[davidtanwei]

I just ordinary guy... The ilp is 25k dead, 25k critical illness and 25k something. I don't really want my agent advice.. Because of that little thing I ask... I just ask that I want take bonus... Then talk untill something say in the end... If I really need... Go their main office to do.
Do u guy know if upon dead, if a person have several policy.. Is it all the dead amount for each policy add up? Or only the higher amount can claim.
Does our medishield already automatically
Got insurance for us?
I about 90% make up my mind to surrender all instead of take bonus only.
Thanks everyone contribution for ordinary man...

 

[Geeezz]

in the event of death, all the death benefit from all policies will be paid out.

fr full coverage shield plan, we can claim the full bills

fr basic medishield, we need to pay a co payment n deductibles the rest can claim.

i would say keep ur shield plan n change ur servicing agent