Monday, June 15, 2015

SAF Group Term Life Insurance Rebate

Since I reinstated my SAF Group Term Life (GTL) insurance plan after I started working, this has been the first full year that I've been covered by them, and therefore eligible to receive the cash rebate that they give back every year!

As a recap, I am insured with the SAF GTL underwritten by Aviva for $200k and it costs $25.60 monthly or $307.20 annually.

Now, here is the letter of my rebate:


As you can see, the rebate is $40.47.

That reduces my basic term life insurance cost from $307.20 to just $266.73 a year. That is a reduction of 13%!

I have actually been waiting for the cash rebate to come out so that I can calculate the real cost of my term insurance.

As a recap, I also have 2 of the SAF-Aviva riders, which is Living Care (50k) and Living Care Plus (50k). They cost $5 and $1.50 a month respectively.

This bring my total insurance cost of covering death / TPD / CI and early CI to $28.73 a month.

Now that I know this, I can finally start doing my math and see if I should switch insurer (the SAF GTL and their riders are annual pay-as-you-go plans, which means you are not locked in) because of costs or benefits.

With the launch of the comparefirst website, I think it is much easier for consumers like me who are more financially savvy to manage their own insurance needs cheaply, clearly and without the need of an agent.

I am thinking of doing a post to show how I compare this plan with what is on comparefirst. For now though, I am happy with my insurance with Aviva.

Perhaps I won't even switch insurance, but just add on insurance instead. I think that diversifying insurance isn't too bad of an idea if it convenient to your situation.

I strongly believe that "buying term and invest the rest" is the correct way for me, but that's just my personal stubborn view on insurance. Do I think endowments are sucky? Do I think that whole life insurance is sucky? Yes and yes. But to each their own.

7 comments:

  1. If I'm not wrong, the SAF GTL will cover you up to age 65. Would you then consider having perhaps a $100k sum assured via a Whole Life policy that will last you till you're 99?

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    Replies
    1. Hi LG,

      You are right, the SAF GTL has an upper age limit for coverage.

      It can cover up to $1,000,000 until 65, if coverage is increased before 55 years old.
      From 65 to 70, coverage can only be assured up to $100,000.

      I would not consider a whole life policy because I do not believe that passing my assets to my dependents though an insurance policy is a smart move, since there is no estate tax in Singapore. Once I have enough assets that insurance is no longer needed, I may even discontinue my term insurance policy. This may happen well before the age of 70.

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  2. You guys present there are performing an excellent job.life insurance quote

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  3. Hi, I am a Independent Financial advisor currently and just so happened on your blog while doing my research. I am glad that you are able to do your own financial planning to save on the agent cost. But do note that there are clauses you need to look out for in the SAF Term plans. It's hardly an apple to apple comparison when looking in depth. Things to look out for are no nomination of beneficiaries (lawyer fees), expensive CI coverage for Living Care after 45, and small number of illnesses covered under Living Plus for Early Critical Illness. An Excel spreadsheet will allow you to see the difference in the long run =)

    Cheers!

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    Replies
    1. Hi Ekin,

      Thanks for dropping by.

      I do agree with you that CI under the SAF plan gets increasingly expensive as you get older. I am planning to either replace or supplement my coverage with another policy in the near future. With no dependents, I am still grossly overinsured.

      The main coverage that I am need is cancer coverage, since I have a good family history for that, everything else is almost entirely incidental. While other people maybe be getting CI coverage for those other illnesses, I am not. In my opinion, there's no point to get coverage for 100 illnesses, but no coverage for the illness that you have the highest odds of contracting.

      Lawyer fees can be easily avoided if your asset ownership and will is clean and simple.

      For sure, people with no clue and no experience with anything finance related should approach a financial advisor. I would not advise anyone to do what I have done if they do not know what they are doing.

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  4. Thank you for sharing such great information.It is informative, can you help me in finding out more detail on Life insurance

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  5. I agree that this is informative and a good help for me in finding out details about life insurance. We are interested in St Peter Life Plans.

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