Should i keep my NTUC foundation policy or AVIVA SAF?

[Jarlaxle]

thank you very much

that is indeed more tedious than usual esp after the 150k

 

[Chua Zhiming]

i am currently paying $67/mth for 75k sum assured for the NTUC foundation policy since 1995.

and i have a aviva SAF policy $16/mth for 125k sum assured.

i m considering to surrender the NTUC policy since I have to pay more for lesser sum assured.

am i missing something out here? since this foundation policy has been there for 16 years.

I need some advice please because i don't think i need both policies.

Same scenario. Now i am only keeping my $12.80 a mth 100K aviva policy.

i was paying $55/mth for a 50k sum assured started since 1992...foundation policy too, but i surrendered last year. Take note they remove the entire bonus amount, meaning surrender = loss. The foundation policy have 2 special areas though, u can surrender while in tertiary education or when u get married and they will pay u 125%, meaning u get back a little bit more $$. But overall profit is still at a pathetic 2-3% only.

If u are thinking of surrendering, go talk to their CSO at any of their branches and do your own calculations to see how you can get back more $$$. Dont let them shortchange you more then they already have. good luck.

 

[catachan]

Hi catachan,

Aviva is a term policy. It provides financial compensation in the events something happen to the life assured during the term. If no claims is filed during the term, the policy expires without any cash value. Eg is travel insurance and car insurance, they are like term insurance.

Income Foundation is an endowment policy, a saving plan. I had an enquiry from someone wanting to sell his foundation policy, think it's maturity date is 2042.
It's a old (how did you get this policy?? probably by vesting from your parent, very long term (almost like whole life) saving plan with special payout for tertiary education.

An endowment accumulates cash value(which you can surrender unlike a term) and gives you a lump sum upon claim or maturity. If a claim is filed, this policy will pay your beneficiary 75K plus bonus. If no claim is filed and upon maturity, it'll give you 75K plus bonus, a figure which constitute a part of your retirement savings.

For 83 dollars a month, you have an endowment (>75K at maturity) and a protection of > 200K, that's very decent.
Unless you can find work out something better, in terms of similar coverage, risks and returns, you need both.

They are for different purposes:
Shield plans for hospital bills,
Whole life, terms ILP to cover death, TPD, TI, Criticall illness
(low premium, higher coverage, but no or low/slow cash value)
Savings (steady accumulate your wealth, preserve, low risk)
Investment (aim for higher returns, higher risk)

You can use some good financial planning from the guys here.

regards
Micky Neo

thanks alot for your help, the foundation policy was from my dad last time. i already took out the 125% bonus but i was thinking abt doing a fully paid up foundation policy now (as suggested by the other forumer) as i m not able to pay the full premium as a student.

 

[catachan]

Same scenario. Now i am only keeping my $12.80 a mth 100K aviva policy.

i was paying $55/mth for a 50k sum assured started since 1992...foundation policy too, but i surrendered last year. Take note they remove the entire bonus amount, meaning surrender = loss. The foundation policy have 2 special areas though, u can surrender while in tertiary education or when u get married and they will pay u 125%, meaning u get back a little bit more $$. But overall profit is still at a pathetic 2-3% only.

If u are thinking of surrendering, go talk to their CSO at any of their branches and do your own calculations to see how you can get back more $$$. Dont let them shortchange you more then they already have. good luck.

ya i was thinking surrendering quite wasted coz already paid for so long... so i decided to convert it to fully paid up instead

 

[Keny_tan]

my AIA endowment is 70 per month but only 10k for sum assured.

 

[Financial Guru]

my AIA endowment is 70 per month but only 10k for sum assured.

How many years is your endowment plan duration?

 

[Cashcow]

my AIA endowment is 70 per month but only 10k for sum assured.

Endowment is more for savings rather than for protection.

If you want more for protection, you can buy a term plan which can cover you for at least 300k.

 

[Keny_tan]

its for 25 years

 

[Financial Guru]

its for 25 years

Can verify what I'm calculating?

If you're paying $70/mth, that makes $70 x 12 mths x 25yrs = $21,000
How can your sum assured (10K) be less than the total premiums you're paying?
What's the projected maturity benefit?

 

[Cashcow]

Can verify what I'm calculating?

If you're paying $70/mth, that makes $70 x 12 mths x 25yrs = $21,000
How can your sum assured (10K) be less than the total premiums you're paying?
What's the projected maturity benefit?

It's confirmed 25yr endowment plan la.

 

[Keny_tan]

its at abt 28k at maturity. but because i can choose to take cashback every year if i want (i guess thats why its low)

 

[Financial Guru]

its at abt 28k at maturity. but because i can choose to take cashback every year if i want (i guess thats why its low)

Ahh...no wonder...have you withdrawn any money from the endowment plan so far?

If not, then I calculate that if AIA returns you 28K at the end of 25 years, your yield on your endowment plan is 2.15% PA.

Is this yield something you're comfortable with or are you looking for something more? (with of course more risk)

 

[Keny_tan]

Ahh...no wonder...have you withdrawn any money from the endowment plan so far?

If not, then I calculate that if AIA returns you 28K at the end of 25 years, your yield on your endowment plan is 2.15% PA.

Is this yield something you're comfortable with or are you looking for something more? (with of course more risk)

2.15% is quite lil. considering its 25 yrs. no meh?

 

[HandsTied]

2.15% is quite lil. considering its 25 yrs. no meh?

There are many rubbish policies and sellers of such policies around.

 

[henrylbh]

Ahh...no wonder...have you withdrawn any money from the endowment plan so far?

If not, then I calculate that if AIA returns you 28K at the end of 25 years, your yield on your endowment plan is 2.15% PA.

Is this yield something you're comfortable with or are you looking for something more? (with of course more risk)

Must make clear that 28k is not guaranteed.

My 14 yrs endowment just matured last month fell far short of projected and I got 3.25% instead of 5.75%.

This month my 10 yr single premium policy also fell short of projected yield and I got 2.99% instead of 5.03%.

 

[Keny_tan]

Must make clear that 28k is not guaranteed.

My 14 yrs endowment just matured last month fell far short of projected and I got 3.25% instead of 5.75%.

This month my 10 yr single premium policy also fell short of projected yield and I got 2.99% instead of 5.03%.

but ur returns are quite high compared to mine. but is there a possibility that insuance company dun pay the non guaranteed? and is project returns calculated at guaranteed+non guaranteed.

 

[Financial Guru]

but ur returns are quite high compared to mine. but is there a possibility that insuance company dun pay the non guaranteed? and is project returns calculated at guaranteed+non guaranteed.

I've not seen any insurer which does not declare some non-guaranteed bonus over the term of the endowment plan, though most of the time, the bonus declared will not hit the high watermark level of LIA's 5.25% investment return.

Yes to your 2nd question of projected returns = guaranteed + non-guaranteed returns

 

[henrylbh]

but ur returns are quite high compared to mine. but is there a possibility that insuance company dun pay the non guaranteed? and is project returns calculated at guaranteed+non guaranteed.

The returns are disappointing when viewed against the projected returns. I paid the premium with fund from CPF OA. One would be much better off transferring the amount from OA to SA.

 

[Cheepoozz]

does the SAF term plan covers Critical Illnes? or TPD?
any good budget recommendation for term plans?

 

[Financial Guru]

does the SAF term plan covers Critical Illnes? or TPD?
any good budget recommendation for term plans?

Please check out: http://www.aviva.com.sg/customer-care/faqs/index.html#saf

There is no agent to help you with anything though, you'll have to DIY for both application and claims.

If you want to see other competitive term plans, just PM me.