Wednesday, June 22, 2016

Free SAF Aviva Group Term Life Insurance? Changes are coming!

Of course you would have seen it by now, it's been plastered in the newspapers today. The SAF will be providing free TPD and PA insurance to national servicemen. The amount is $150k.

Honestly, this is a good thing. It's a rather decent coverage level to provide, but I do think that it makes NSFs, as well as their families, lazy to think about other or additional insurance coverage. It would be foolish for families to expect that whatever coverage the SAF takes out for their sons is enough. I'm sure if you browse around social media, confirm plus chop there will be anti-SAF trolls saying "$150,000, is that how much 1 Singaporean is worth? TOO CHEAP", but... screw these trolls and their sub-functional level of IQ. This insurance should not and does not remove the personal responsibility of having your own insurance, but sadly I am sure it would encourage some to be even further distanced from thinking about insurance.

Anyway, the more interesting aspect of this news isn't the free coverage extended to NSFs and NSmen during training, but it is also the revamp of the voluntary scheme, which is currently the SAF GTL provided by Aviva. They will be rolling out a new scheme soon.

I have recently praised Aviva for their very competitive term insurance rates, however their critical illness and early CI riders leaves much to be desired, especially from the premium (cost) standpoint.

From reading the Today's article (which actually has a lot more useful information than all the other sources that I've seen), they are looking a premiums for $100k TPD to drop drastically from $12.80 to just $5.10! When you count the rebate that Aviva is currently giving out, the cost of $100k coverage is about $7.80, which is in itself already very cheap coverage. This drop to $5.10 is really sticker shock (in a good way)! (Btw, does anyone know where exactly they pulled the $5.10 figure from?)


It is going to be insanely cheap. A million dollars worth of coverage is going to cost merely $51 a month!

What is very interesting to note is that if you are covered under the SAF GTL scheme now, your insurance will be ported over to the new scheme, which is cheaper, at least for the plain vanilla TPD coverage. How the CI and early CI riders will fare and if their premiums would drop and be more in line with market premiums now, it is hard to say.

One very interesting point to note is that the new VS does not require medical check-ups for amounts under $250k, which might be a godsend to certain people.

Personally, I'm covered for $200k now, but I am very tempted to increase my coverage to $500k before the switch to the new plan. This is because any increases in the future would subject me to medical check-ups. It's not that I have any hidden medical problems to keep secret, I am just lazy to go for a health check-up mandated by an insurance company when I already going for my own health screenings.

In all honesty, I'm already paying $13.75 a month to AXA to be covered for $100k. Is it that expensive to pay $51 a month under the new scheme to be covered for $1 million? In fact, it's crazy cheap. You know what? I might even go for $1 mil considering how cheap it is to be covered. Insurance is one of the few things that it is okay to have more of, especially if you can afford it. If you can't afford it, then that's a whole different situation.

I will lurk around and see what other bloggers and maybe even the peeps in the forums think about these changes, but to me, it seems very positive and I am likely to increase my coverage to at least $500k, if not, 1 mil, before the current scheme gets ported over.

A penny for your thoughts?

7 comments:

  1. I was tempted to cancel my current SAF GTL scheme in light of this but I noticed that the new core scheme introduced only covers NS personnel during training periods (in my case, during my ICTs), so decided against it. I am not sure how they will work out the new voluntary scheme to fit existing policyholders though...

    ReplyDelete
    Replies
    1. Hi Anon,

      From what I understand by talking to someone at Aviva, existing policyholders will be automatically ported over under the new scheme. That means from 1 Oct onwards, our premiums will drop and we would be able to increase our coverage to the new limits.

      Delete
  2. You may check out the premiums here.

    http://www.aviva.com.sg/MINDEFandMHA

    ReplyDelete
    Replies
    1. Hey Weijie, thanks for that comment!

      I checked out the premiums already. I'm gonna max out $1mil GTL and $600k PA coverage. It's gonna be less than $50 a month for that kind of extreme coverage!

      I will be using it a big compliment, and not an entire replacement, just to be prudent.

      Delete
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    ReplyDelete

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