SAF Group Insurance and CI coverage.

I received an email from a reader, B, and he has agreed for it to be published in the hope of getting more ideas from other readers here:

Dear AK,

Thanks for your ever inspiring and encouraging blog posts for our daily living.

I would like to seek your advice (or what would you do if you were in my shoes) on some insurance matters.

As a background, I am a 27 year old working professional working for around 2+ years, just married, received my BTO flat and planning to have kids next year or the following. I owned a few income producing shares like REITS (not surprising as I am a regular reader of your blog).

I do not own a Investment linked insurance policy nor an endowment. I do have the SAF Group term insurance (Assured for $300,000) as well as the MyShield Plus (the hospitalization plan plus full rider).

I received a letter from SAF Group insurance, asking me to add 2 riders to my term insurance:

1) Supplementary Living Care  - For 30 critical illnesses, Sum Assured $300,000, monthly premium of $30.00

2) Living Care Plus - For common early critical illnesses, Sum Assured $200,000, monthly premium of $20,00

FYI, I am currently paying monthly premium of $38.40 for the SAF Group Term Insurance. 

More info on the 2 riders can be found below if it is useful:

http://www.aviva.com.sg/pdf/SAF_Living_Care_Product_Summary.pdf

http://www.aviva.com.sg/pdf/SAF_Living_Care_Plus_Brochure.pdf
 

 

AK's reply:

Hi B,

I enjoy reading your email because from the looks of things, you are doing things right and doing well. Happy for you. :)

I firmly believe that we need CI (critical illness) coverage. So, I would encourage that you take up the rider. I am not so sure about early critical illness coverage though. I suppose for people who might not have a lot of money put aside for emergencies (or do not have meaningful passive income), this would provide peace of mind.

I like to look at the annual cost instead of monthly cost so as not to be lured into an illusion of cheapness.

$30 x 12 = $360 a year. For a $300,000 coverage, it is inexpensive.

$20 x 12 = $240 a year. For a $200,000 coverage, it is also inexpensive.

If you do not yet have a CI plan, you should give the above serious consideration.

Genuine and constructive comments are appreciated, as always. Thank you.
-------------------------

Update: 13 September 2016.
A reader received this:

Value for money!

Complete table: here.

Related posts:
1. Graduating soon? Steps towards financial security.
2. Free Investment Linked Policies or Term Life Policies?

Tea with Jean: Improving personal cash flow.

The following guest blog is contributed by a reader, Jean:

I have done some search from internet and see whether got any way to get return slightly more than FD and also receive some amount of return in the future.

 

Here's what I have done and for sharing purposes:-

 

First, I open an 360 saving account at OCBC.

www.ocbc.com.sg/personal-banking/accounts/360-account.html

 

If I qualify, I will get 3.05%pa for 50K saving.

 

2nd, I just need to change my current giro payroll to this 360 saving a/c 

 

3rd, I also applied a credit card called OCBC Cashflo (with Great Eastern logo at the top right), which would be useful for my 4th point below.

www.ocbc.com/personal-banking/Cards/GE-Cashflo-Mastercard.html

 

4th, I bought an insurance plan called Family Three from GELA for three of my children. I just need to pay for 10 years and the return will run till my children pass away and still got a lump sum for my grandchild, if any. I make use of the credit card above to make the payment by instalments to enjoy the yearly rate for the premium, which is cheaper if compare to monthly premium. As I bought three policies thus my monthly instalments is more than $400, which make me qualify for the 3rd criteria of the 360 saving a/c.

www.greateasternlife.com/sg/en/pdf/brochures/Family3.pdf

 

In order to fully enjoy the 3.05% interest of 360 saving a/c, I need to meet one more requirement, ie pay any three bills using OCBC online or Giro. So, I use this a/c to pay the above credit card bill, tel co bill and utility bill.

 

Good point for the 360 saving a/c is.....I can withdraw any amount any time freely which FD cannot. But.... ceiling is 50K. :(

 

Pertaining to the insurance......I have bought the similar type in Malaysia, which introduce this plan few years earlier than Singapore, and now I enjoy the return...... use for travelling and service other present policies. If I rich enough, I may buy more so that can get more guarantee return in the future, provided GELA never got financial problem in the future. And in order to enjoy the lower premium...one must have CHILDREN.

 

Hmmm.....I am not insurance agent, not work in OCBC bank and also not a credit card promoter. This is just purely for sharing only.

 

In an email to me, Jean said, "I also hope to receive some comments that can improve my plan." So, please feel free to leave comments for Jean. Thank you.

 

Related post:
Getting paid more while waiting for opportunities.