whole life = disability + TPD?

[nahbehism]

hi,

need some expert view here... currently I have a vivocare plan (whole life) and I m paying about 158.5 per month (20years).. 60k early ci and 180k on TPD

I been thinking of cancelling the vivocare plan and take up disability income insurance and add on Aviva nsman TPD (200k coverage)... do any expert here think its a good idea?

 

[NiteX2]

hi,

need some expert view here... currently I have a vivocare plan (whole life) and I m paying about 158.5 per month (20years).. 60k early ci and 180k on TPD

I been thinking of cancelling the vivocare plan and take up disability income insurance and add on Aviva nsman TPD (200k coverage)... do any expert here think its a good idea?

Vivocare provides for early CI coverage and 3x death coverage before age 65, so you will have 180k for death (not tpd)

Adding on term coverage using aviva nsman term is a sound idea. That said, there is no need to cancel vivocare just to take up the term plan and disability income insurance. They cover different things. You should look at boosting your CI coverage as well

 

[Chennie]

hi,

need some expert view here... currently I have a vivocare plan (whole life) and I m paying about 158.5 per month (20years).. 60k early ci and 180k on TPD

I been thinking of cancelling the vivocare plan and take up disability income insurance and add on Aviva nsman TPD (200k coverage)... do any expert here think its a good idea?

If your plan has accumulated some cash value, I would never advise you to cancel it. Check for your break-even point so that you can find out when it would be ideal to cancel or switch. My recommendation is, if its past the 3rd year, it's usually NEVER a good idea to switch.

As for the Aviva section, you may need to speak to an agent who specialises in Aviva. I only deal in AIA (^_^)

 

[chopra]

your equation is wrong.





The under-mentioned is the same old naggy message that i have been posting for years, based on the clueless people whom had asked/post such questions/remarks before. Kindly spend a few minutes reading it. No need thank me.

First, you need to understand what's insurance and what's not insurance.

1. term plan, travel insurance, accidental insurance, medishield / integrated shield plan = insurance

2. life/endowment/savings plan/kids education = insurance plus fixed return investment in bonds etc

3. ilp = insurance plus variable investment in a mixed of bonds and stocks.

Next, the problem...

Only silly-people-who-feel-too-rich buy plans bundled with investment. Hefty commission in terms of paying the insurance agent, other insurance company overheads, HUGE bid-sell spread should you switch fund or surrender policies. If you do not understand all the terminologies of what i have written in this para, then you should see why this is a PROBLEM; signing contracts blindly.

Again, ILP, life, endowment, kids education plan, savings plan are essentially the same thing, with different weightage in bonds and equity. These silly ppl pass money to insurance company to invest -- what you should do is to skip these intermediary channels and DIY.

Remember, there is no free lunch in this world. If you think insurance agent is god-sent to help financially not so savvy people, you are wrong. These silly people will only realise the meagre profit (sometimes huge loss) after 5 to 10yrs of silly committment to the insurance company. They will then start asking their agents for the BENEFITS ILLUSTRATION only to realise what they r trapped. These silly people will either remain disillusional or wake up and start reading up on investment. So why repeat the path that these ppl have had taken? Spend 15min a day to read the money mind subforum in hwz and you will be enlightened in a year. Get off your lazy bum and be hardworking now!

Also, some agents will ask you to pm and discuss because they dont want you to know the truth. Again, be cautious, be skeptical. Your loss is their gain. The conflict of interest is and will always be there.

Buy term insurance and integrated shield plan and maybe accidental plan, and invest the rest. There's no financially not savvy ppl, only lazy people.

Good luck.

 

[IFAadvisor]

hi,

need some expert view here... currently I have a vivocare plan (whole life) and I m paying about 158.5 per month (20years).. 60k early ci and 180k on TPD

I been thinking of cancelling the vivocare plan and take up disability income insurance and add on Aviva nsman TPD (200k coverage)... do any expert here think its a good idea?

Hi,

You will need to know your what risk do you want to cover. NTUC Vivocare is a life with early CI coverage plan. There is only 2 companies in the market that is providing such coverage.

Disability income insurance as its name says, provide you income when you lose the ability to go back to work. The definition is usually proven by a doctor that you are unable to work for a continuous period of 30 to 90 days (depending on contracts). Though it may meant it will cover you when critical illness strikes, but do note illnesses like open heart surgery, SLE, angioplasty, kidney failure, may not apply because you still has the ability to work a profession.

Aviva Term plan is the cheapest group level term in the market till 65 but their CI grows exponentially after age 42.

So if you are thinking of increasing your coverage via term due to lack of budget or some life events, I felt it is alright, but don't miss out on the CI portion.

If you are just thinking to reduce for the sake of reducing, try not to, since you really can't save a lot from $150 per month since you may only save $60 per month (a ballpark figure) if you convert, $720 per year in 20 years is about $14400, even with good return of investment per annum, I don't think you will be very much well off.

 

[tiny]

At 1 camp, there are people bashing "whole life insurance with so called investment fixed returns". You so sure u can DIY and hit above 5% annualized returns every single year? My whole life plans are doing fine and I look forward to cashing it out progressively at ages 60, 70, 75.

 

[Chennie]

At 1 camp, there are people bashing "whole life insurance with so called investment fixed returns". You so sure u can DIY and hit above 5% annualized returns every single year? My whole life plans are doing fine and I look forward to cashing it out progressively at ages 60, 70, 75.

Sadly a lot of people do think they can DIY and hit above 5%. The reason is that the market is always portraying the success stories of people making millions as glamorous.

Good life policies will never keep you paying forever. Limited pay, with decent cover, decent prospective returns and the rest I cover using term (this is actually what I did for myself before starting).

 

[chopra]

At 1 camp, there are people bashing "whole life insurance with so called investment fixed returns". You so sure u can DIY and hit above 5% annualized returns every single year? My whole life plans are doing fine and I look forward to cashing it out progressively at ages 60, 70, 75.

show me a whole life with 5percent guaranteed.
cpf sa 4percent. compounding.

 

[Chennie]

show me a whole life with 5percent guaranteed.
cpf sa 4percent. compounding.

All whole life in the markets are sitting at 4.75% (best case scenario projection).

However, from what I've noticed of the return trend. They will generally return you the 4.75% UNLESS something horrible happens in the market and lasts for more than 5 - 6 years. The reason for this is dividend smoothing. Presently if the fund makes more than 4.75% (say 8%) they will return you 4.75% and keep the rest (this amount is compounded as well). This is so they can continue to return 4.75% even in bad years (where they make less or negative returns).

CPF SA will give you 4% compounding, however withdrawal is a problem. You must still leave the minimum sum inside CPF. Presently if I have 100k in CPF, I can only withdraw $5,000.

If I had a life policy instead, I might be able to surrender for the cash value which would have covered the premiums paid and given some excess cash on top of that.

These are important things to consider. Always find your break-even point with a life policy and find out how quickly it starts making you cash. During this period, it is an ASSET and you are basically getting protection for free. You do not need to pay until you die (unless you choose a plan that does this).

 

[Aerial86]

The only company that ive heard which have been giving out projected returns on 4.75%, previously 5.25%, is only tokio marine which over the last 65yrs have been honoring this.. This does not mean anything for the future but it is always good to have a track record to rely on.

 

[Michyeosseo]

You are from Tokio Marine?

 

[Chennie]

AIA is now at 4.75%, same with Pru and GE, soooo generally everyone offers 4.75%

AIA has also honoured their 4.75% though pre-GFC, every company offered much higher than 4.75% which proved to be unsustainable in a crisis situation, 4.75% is more reasonable since the funds usually perform at 5% or better. This allows them to store up for the big crisis.

 

[Aerial86]

You are from Tokio Marine?

Nope I'm from an IFA.. Chennie when I mean giving out in higher %, I mean their cash value accumulation have been accumulating at the higher %.. Of cause I know all insurer shows 4.75% in their projected returns which is a regulation set out but that does not mean all insurer is able to give at that %..

A search on the net will find you more details on what I've said.. You might also want to find out why MAS decided to drop the projected returns down to 4.75% across the board.. I'm only being transparent in what I know..

 

[bigmice]

AIA is now at 4.75%, same with Pru and GE, soooo generally everyone offers 4.75%

AIA has also honoured their 4.75% though pre-GFC, every company offered much higher than 4.75% which proved to be unsustainable in a crisis situation, 4.75% is more reasonable since the funds usually perform at 5% or better. This allows them to store up for the big crisis.

project return rate 4.75% is give by MAS, normally insurance company will follow this rate (but no guaranteed). I you buy policy before2013, will still get 5.25% return.(same as shown on BI),but new policy will follow 4.75% .

 

[Chennie]

Aerial is right. Though I can't verify for other insurers, at present AIA has honoured that % since our par fund has done relatively well. But of course, for any considering a policy now, past wouldn't mean much. Whether or not that can be sustained, becomes the issue

 

[nahbehism]

Wow.. thanks for all the replies..

When I first buy the plan.. my idea was more on protection and since it provide a cash value I tot it was a good deal..

However as I progressively read.. I begin to find cheaper alternative to protection such as aviva nsman.. of cos their ci coverage is really ex after 42.. tats when I see the disability plan..

even though its true tat ppl who had angioplasty is still able to work.. Ntuc early ci pay out is not high enuff to help ensure tat the person no longer needs to work

 

[Chennie]

Even with disability you must be careful of definitions. Some plans will not pay out if you can still do some work, but other than that, it's good to be thinking of the right plan for you.

 

[Aerial86]

Wow.. thanks for all the replies..

When I first buy the plan.. my idea was more on protection and since it provide a cash value I tot it was a good deal..

However as I progressively read.. I begin to find cheaper alternative to protection such as aviva nsman.. of cos their ci coverage is really ex after 42.. tats when I see the disability plan..

even though its true tat ppl who had angioplasty is still able to work.. Ntuc early ci pay out is not high enuff to help ensure tat the person no longer needs to work

Do take note that for Aviva CI, they only cover 10 types of CI compared to other insurer who have 30... That explains a lower premiums as compared to the rest.. But the basic plan is good for coverage before 65...

 

[Chennie]

Wow, only 10 CI. I guess that's the advantage of IFA, you know what the others have. That's quite little.

 

[Aerial86]

Wow, only 10 CI. I guess that's the advantage of IFA, you know what the others have. That's quite little.

It's not really an advantage.. IFA or agent, both can be equally knowledgable in terms of product.. It's only whether the effort is being spent to understand things better so as to benefit my clients during the whole planning process.. Self upgrade is important to keep in touch with the fast moving market..

Most product details could be easily found in the net for consumers to be more clear about each individual product..