Switching term insurance carrier

[lancer6238]

I currently have a HDB loan with DBS. When I took the loan about 2+ years ago, I also bought Manulife's ManuProtect Term insurance (with terminal illness and TPD) as recommended by the banker as he said it's a requirement by the bank.

I just learned of another term insurance by AXA that has an annual premium of almost $200 cheaper, with the same coverage. Is it possible for me to switch to AXA (not sure if the loan is tied to the insurance in any way)? If anyone has done this, is it troublesome?

Also, for term insurance, is premium the only thing I should look out for?

 

[BBCWatcher]

I currently have a HDB loan with DBS. When I took the loan about 2+ years ago, I also bought Manulife's ManuProtect Term insurance (with terminal illness and TPD) as recommended by the banker as he said it's a requirement by the bank.

The banker was probably fibbing and collected a sales commission. DBS distributes that particular insurance product. Oh well.

I just learned of another term insurance by AXA that has an annual premium of almost $200 cheaper, with the same coverage. Is it possible for me to switch to AXA (not sure if the loan is tied to the insurance in any way)? If anyone has done this, is it troublesome?

Yes, just get the new policy first then cancel the Manulife policy second. But before you decide on a new policy, head over to Comparefirst.sg and comparison shop for direct purchase term life insurance.

Also, for term insurance, is premium the only thing I should look out for?

Obviously the length of the term is important, for example term to age 65 is quite popular and generally a reasonable choice.

If the amount of coverage you're trying to get is more than $500,000, then that policy won't be fully protected by the SDIC and some extra care is required. One solution is to buy two policies. Direct purchase life insurance is available in amounts up to $400,000 per policy, within the SDIC limit.

 

[moejoseph]

Loan will not be tied to insurance, u just have to show the bank ur policy as a prove that u have an insurance for ur loan.

Good thing for term is that u can choose to decrease the coverage next time, or if there's a need to claim, the sum assured can be use to pay off the remaining loan, and any balance can be use for whatever you deem fit (for dependant, final expense etc)

 

[BBCWatcher]

Loan will not be tied to insurance, u just have to show the bank ur policy as a prove that u have an insurance for ur loan.

There's no such requirement. Most probably this episode was just a pushy banker who succeeded in earning some commission on a tied life insurance product sale. It happens a lot, unfortunately.

Are you perhaps thinking of Home Protection Scheme (HPS) mortgage-reducing insurance, which is required if you're using CPF Ordinary Account funds to make mortgage payments on your HDB unit? Or property insurance, which primarily defends the lender's interest against fire risks?

We can debate the wisdom of having or not having term life insurance when one also has a mortgage -- whether it's wise or not depends on one's specific situation -- but required, no. Refer to Section 23 in DBS's mortgage lending agreement, for example.

 

[boredboiboi]

There's no such requirement. Most probably this episode was just a pushy banker who succeeded in earning some commission on a tied life insurance product sale. It happens a lot, unfortunately.

Are you perhaps thinking of Home Protection Scheme (HPS) mortgage-reducing insurance, which is required if you're using CPF Ordinary Account funds to make mortgage payments on your HDB unit? Or property insurance, which primarily defends the lender's interest against fire risks?

We can debate the wisdom of having or not having term life insurance when one also has a mortgage -- whether it's wise or not depends on one's specific situation -- but required, no. Refer to Section 23 in DBS's mortgage lending agreement, for example.

Hps are meant for hdb loan if i not wrong. Once out of hdb loan, dont think you can still get the hps.