NTUC term insurance discussion

[OngHuatHuat]

Brief background about myself and my wife:
32 male non smoker and 31 female non smoker

Currently I am a NTUC union member and have CPF dependent protection scheme as well, so both me and my wife are covered for 40 k sgd under NTUC GIFT scheme:

https://www.ntuc.org.sg/wps/portal/... development/099f248044db7b668217cb69abd7f4b8

There are 2 NTUC income insurance available for members:
1. http://www.income.com.sg/insurance/life-insurance/term-life-insurance/luv

Pro: can extend coverage to wife, free hospitalization cash back if sum assured is 200 k

2. http://www.income.com.sg/insurance/life-insurance/term-life-insurance/plus!-term-life-insurance

Con: needs to be a plus! Visa debit card member and pay 24 sgd per annum, no critical illness coverage

I intend to sign up for the NTUC LUV deluxe cover with 200 k sum assured after I cash out my prudential limited pay WL. Any comment on this?

@Soneat

 

[soneat]

Brief background about myself and my wife:
32 male non smoker and 31 female non smoker

Currently I am a NTUC union member and have CPF dependent protection scheme as well, so both me and my wife are covered for 40 k sgd under NTUC GIFT scheme:

https://www.ntuc.org.sg/wps/portal/... development/099f248044db7b668217cb69abd7f4b8

There are 2 NTUC income insurance available for members:
1. http://www.income.com.sg/insurance/life-insurance/term-life-insurance/luv

Pro: can extend coverage to wife, free hospitalization cash back if sum assured is 200 k

2. http://www.income.com.sg/insurance/life-insurance/term-life-insurance/plus!-term-life-insurance

Con: needs to be a plus! Visa debit card member and pay 24 sgd per annum, no critical illness coverage

I intend to sign up for the NTUC LUV deluxe cover with 200 k sum assured after I cash out my prudential limited pay WL. Any comment on this?

@Soneat

I am afraid I wouldn't be able to give you a very thorough opinion without knowing the details. Some food for thought for you though....

What everyone is seeking is to grow wealthy in a systematic and proven way, and hence the portion on financial planning comes into the picture. Financial planning consists of many aspects: defensive: insurance planning, offensive: investment/Retirement planning and also legacy planning. Along our life journey, potentially we will also encounter many life events-marriage, new born, buy car, buy house, buy more house, retirement etc. It is very important for an individual to understand what one truly one's to achieve in life, before even thinking about planning. In summary, always have the end in mind and if you are able to bump into a trusted wealth mentor in life, then your wealth mentor might change your outlook and accelerate your progress. Note: Wealth mentor is not financial planner/agent.

For your existing Prudential WL limited pay, you need to ask yourself what are the events it cover and if you need those events to be covered for your entire life. Consider carefully. If you do think you do not need those coverage for your whole life, the next question is how many years is your premium payment term and how long have you paid. If you are about to pay finish or has paid finish, I suggest keeping it as an emergency cash or treat it as part of your war chest. Chances are the policy will continue to yield at 3+%, not great but acceptable to me.

Ok now for the question on Term-CI, despite your age (young), I feel we don't really need that much of a CI. S$200k is probably sufficient. But if you are thinking of e.g. S$300k CI, then you might want to consider:
i) S$200k CI with Aviva Mindef/MHA (basically you will continue from now and drop once it is more expensive than Income's)
ii) S$100K CI with Income Plus!
So in this sense, you have crafted your own combo of decreasing term. Again...this is just bouncing an idea - just one possibility. Not suggesting this is the optimum solution for your case.

One additional perspective is that these non-direct CI covers 37 conditions. Compared to the one under Direct which covers only 30 conditions, one of the item is "Loss of Independence". It is similar to Eldershield's claim criteria (3 ADLs) except that it probably has a longer waiting period.

 

[Mecisteus]

I remember you were glorifying limited pay WL policies. How it is such a good plan to pay more upfront and getting a lifetime protection after the payment period is over.

So why cashing out now?

 

[OngHuatHuat]

Thanks for the reply.

Actually my limited pay prudential is already more or less paid up since I can convert it into fully paid anytime. Perhaps I should wait for them to declare next bonus in May before I decide on whether to keep it. If I chose to convert it into fully paid up, sum assured is around 65 k sgd(this is not the surrender value).

For the NTUC LUV, I intend to take up coz of the low premium payable and they have hospitilisation cash back as well.

I am afraid I wouldn't be able to give you a very thorough opinion without knowing the details. Some food for thought for you though....

What everyone is seeking is to grow wealthy in a systematic and proven way, and hence the portion on financial planning comes into the picture. Financial planning consists of many aspects: defensive: insurance planning, offensive: investment/Retirement planning and also legacy planning. Along our life journey, potentially we will also encounter many life events-marriage, new born, buy car, buy house, buy more house, retirement etc. It is very important for an individual to understand what one truly one's to achieve in life, before even thinking about planning. In summary, always have the end in mind and if you are able to bump into a trusted wealth mentor in life, then your wealth mentor might change your outlook and accelerate .

 

[OngHuatHuat]

Later you say I hao lian if I tell you the real reason

I remember you were glorifying limited pay WL policies. How it is such a good plan to pay more upfront and getting a lifetime protection after the payment period is over.

So why cashing out now?

 

[soneat]

Thanks for the reply.

Actually my limited pay prudential is already more or less paid up since I can convert it into fully paid anytime. Perhaps I should wait for them to declare next bonus in May before I decide on whether to keep it. If I chose to convert it into fully paid up, sum assured is around 65 k sgd(this is not the surrender value).

For the NTUC LUV, I intend to take up coz of the low premium payable and they have hospitilisation cash back as well.

Yup. I know what you mean - Convert to RPU (Reduced Paid Up).

Personally, I would advise against converting to RPU because if I am not mistaken, once you covert to RPU, it would not take part of future bonus distribution.

 

[OngHuatHuat]

Sure about this? Think I better email them and ask about it.

Yup. I know what you mean - Convert to RPU (Reduced Paid Up).

Personally, I would advise against converting to RPU because if I am not mistaken, once you covert to RPU, it would not take part of future bonus distribution.

 

[soneat]

Sure about this? Think I better email them and ask about it.

Read your policy contract first before you call them up.

 

[OngHuatHuat]

All right, thanks for the advice.

Read your policy contract first before you call them up.

 

[soneat]

All right, thanks for the advice.

Maybe different era policies have slightly different wording.

AIA one says:
Reduced Paid Up Insurance - to continue this policy in force as non-participating paid-up insurance for a reduced amount payable on the same date and under the same conditions as the Face amount.

Income one says:
...converted to a paid-up policy for a reduced Sum Assured, upon which no further premiums will be payable.The paid-up policy will participate in subsequent Bonus distributions in repsect of the reduced Sum Assured only.

Sorry dunno how to show image.

 

[Mecisteus]

Later you say I hao lian if I tell you the real reason

Because it is already BE and sum assured is too low.

It should not be a good reason to cash out. You should just increase your coverage.

 

[OngHuatHuat]

I go back read up first.

Maybe different era policies have slightly different wording.

AIA one says:
Reduced Paid Up Insurance - to continue this policy in force as non-participating paid-up insurance for a reduced amount payable on the same date and under the same conditions as the Face amount.

Income one says:
...converted to a paid-up policy for a reduced Sum Assured, upon which no further premiums will be payable.The paid-up policy will participate in subsequent Bonus distributions in repsect of the reduced Sum Assured only.

Sorry dunno how to show image.

 

[OngHuatHuat]

I think it will affect reversionary bonus since it is based on sum assured.

And it will affect performance bonus as well based on the table shown if I terminate it early.

Maybe different era policies have slightly different wording.

AIA one says:
Reduced Paid Up Insurance - to continue this policy in force as non-participating paid-up insurance for a reduced amount payable on the same date and under the same conditions as the Face amount.

Income one says:
...converted to a paid-up policy for a reduced Sum Assured, upon which no further premiums will be payable.The paid-up policy will participate in subsequent Bonus distributions in repsect of the reduced Sum Assured only.

Sorry dunno how to show image.

 

[soneat]

I think it will affect reversionary bonus since it is based on sum assured.

And it will affect performance bonus as well based on the table shown if I terminate it early.

Urmm. This is the BI not the Policy Contract.

 

[OngHuatHuat]

They got show how to calculate the bonus.

Wait....

Urmm. This is the BI not the Policy Contract.

 

[soneat]

They got show how to calculate the bonus.

Wait....

The BI is usually not a legally binding document. The exact wordings for RPU option is in the Policy Wording, not BI.

 

[OngHuatHuat]

Urmm. This is the BI not the Policy Contract.

 

[OngHuatHuat]

You are right. They will stop adding in bonus.

The BI is usually not a legally binding document. The exact wordings for RPU option is in the Policy Wording, not BI.

 

[soneat]

You are right. They will stop adding in bonus.

You might also want to clarify will they be stopping just the annual bonus alone or both the annual and terminal bonus. If they will still give you your terminal bonus, is it going to based on the year you converted to RPU or the actual event date.

 

[OngHuatHuat]

You might also want to clarify will they be stopping just the annual bonus alone or both the annual and terminal bonus. If they will still give you your terminal bonus, is it going to based on the year you converted to RPU or the actual event date.

Actually i still left with 4 more years to pay only. if really so troublesome, maybe i will just continue.

terminal bonus? My policy will never expired one i think, so no terminal bonus.