Insurance & Costs of having and raising a child

[opmi]

2. Aviva Group Term: S$192/annum; Coverage (Death, TPD): 125k;
3. AIA (25Y Term): S$452/annum; Coverage: Death, TPD (15k);

AIA one pay more $ for less covered...both term.

suggestion only. read at own risks. not responsible for your actions taken.
consult your own insurance advisor before taking any actions.

If still HEALTHY (no pre-existing conditions), get more AVIVA Group Term & Cancel AIA 25Y term.
I assume AVIVA Group is the AVIVA SAF Group Term.

[NTL]

Have been an avid reader of VB since I discovered it earlier this year, and have to thank all the seniors here for their valuable advice, really opened my eyes to the world of personal finance and value investing.

Lately after reading all these, especially this thread which I've read thru twice by now, decided to take a hard look at my insurance policies. Right now, I have the following coverage, hoping to hear fellow forummers' opinion and advice. Btw, more about my current circumstances, I'm single, 30, non-smoker, and my parents don't need to rely on me for their living expenses.

Policies as follows:
1. NTUC DPS: S$36/annum; Coverage (Death, TPD): 46k;
[just keep, pay using cpf]
2. Aviva Group Term: S$192/annum; Coverage (Death, TPD): 125k;
[just keep, note that the policy owner is SAF, not you]
3. AIA (25Y Term): S$452/annum; Coverage: Death, TPD (15k);
[really ex, look for cheaper term insurance from NTUC, Aviva]
4. AIA (Personal Accident): S$155/annum; Coverage: TPD: 25000 lump sum, 1,500 from year 1-4, 9,000 on year 5; Partial Disability: % of 25,000; Medical reimbursement: up to 2,500/injury, 5,000/overseas; Income replacement: 12,500;
[throw away, cover too little to impact life]
5. AIA (Pink of Health): S$150/annum; Coverage: Hosp. benefit: 50/day, up to 500days (100/day extra if due to accidents); ICU benefit: 150/day up to 30 days; Get well benefit: S$50; Hospital expense reimbursement: 1500/accident or illness;
[throw away if you intend to upgrade your shield plan]
6. HSBC 30CI (ILP): Coverage: TPD: 100k; CI: 150k; Death: 150k;
[ILP, throw away, most waste money kind of policy]
7. Aviva (H&S) MyShield Plan1: S$383/annum;
[upgrade if can afford]
8. GE 25Y Annual Cashback Endowment: S$1205/annum, annual cashback at 5% from year 2 onwards to year 9, from year 10 onwards at 6%;
[throw away, such endowment return very low]
9. HSBC Growth Manager (ILP): S$2400/annum (7Y lock-in)
[ILP, throw away]

First off, I think I really have bought quite a load of crap here, so feel free to scrutinize and offer some advice and opinions.
My thinking is that for Death, TPD, I'm sufficiently covered for someone my age and with no dependents.

For everything else, it seems I've got the wrong policies or insufficient coverage.
CI: Looks like I could get a term CI costing much less than what I"m paying?
H&S: Already looking to upgrade to the maximum I can afford, ie. MyShield Plus Option C Plan 1 (additional S$384/annum cash premium);
DI: zero coverage at the moment;

Additionally, for CI coverage, I've spoken to an agent who mentioned that it is important to get some coverage for early stage CI (mainly things like Stage 1 or 2 cancers), esp. if one goes for regular medical checkups and discover those things in time, otherwise the normal CI policies only cover terminal stages cancer. Appreciate if fellow forummers can share their opinions on coverage for early stage CIs, especially since things like cancers are just getting commonplace in our society today.

For the endowment, it has already in its 10th year already, projected maturity at this stage is 20k (currently all cashback coupons are NOT reinvested). Am considering the option to leave it as it is and just use the annual coupons for passive investing in index funds (Nikko AM STI ETF for now since I'm still quite noobish now);

As for the HSBC Growth Manager plan, i've taken a look at the latest statements and my total balance for all units held is less than the total premiums paid (3 x 2400 = 7.2k) so far. This policy is geared to maximum investment and minimal coverage (6.8k Death). The costs for this plan are just crazy, $130 for $2.4k premiums received in my third year, a good 5% shaved. I'm considering terminating this plan and use the money to do my own investments, though that'll set me back (in terms of premiums paid) by a good 5.3k.

All these have been bought in good faith from friends who were agents, sigh... but at least I'm glad I've found VB and can start to re-organize my policies and learn more about value investing. So, sorry for my long winded first post here, but appreciate if fellow forummers can offer some advice on how to improve my current coverage. Thanks!!

See above in [] for my comments. Shall write more when I have time.

[Contrarian]

Reply from Mr Tan Kin Lian, the ex-NTUC Income CEO, an insurance veteran!!!

Alex Long asked:
Mr. Tan, my son completing his U soon and has been offered a job. What advice u have for him in term of insurance coverage and others etc.,? Thanks you.

REPLY
Buy a 25 year term insurance policy, or the SAF policy, and invest the savings in the STI ETF.
Give him this book, www.c-opal.com/pdfbook/33.
Ask him to join FISCA (www.fisca.sg) and attend the financial planning talks, targeted at consumers.
Avoid buying any life insurance policy (other than a 25 year term insurance policy) and give away 40% of the accumulated value to the insurance company. (Only idiots will fall for the trap).

[CityFarmer]

There is a DIY website on insurance in Singapore. I got the info from the latest issue of The Edge.

It might be useful for those intent to do comparison among insurance policies in Singapore.

http://www.diyinsurance.com.sg/portal/home/index.jsp

(no vested interest)

[AlphaQuant]

I thought a letter to the ST forum today makes a good read and some discussions:

http://www.straitstimes.com/premium/foru...s-20140626

I reproduce the letter below in case the url gets ineffective subsequently.

The writer (Mr Martin Lee) also has a decent post on his website:

http://www.martinlee.sg/time-drop-integr...ield-plan/

Personally, given that details on Medishield Life has yet to be released and the impacts on the IP plans, I think advise to people to drop their IP plans is rather premature. Other than the mean-testing that the writer writes abt, I think people will also have to consider further evolutions of the medishield plans, future capacities of B1/C wards among other factors to decide if one should drop the IP plans.

===============

THE advice given to readers last Saturday ("Medisave sum 'goes further in new plan'") was that if a person required only subsidised care (staying in B2 and C wards), then MediShield Life alone should be sufficient.

Anyone considering dropping his private Integrated Shield Plan (IP) because he is thinking of going for only subsidised care should also consider whether he is impacted by means testing.

With means testing, a person earning more than $3,200 a month or is unemployed but living in private property would receive a lower subsidy for his bill. The extra unsubsidised portion of the bill would not be covered by MediShield or MediShield Life.

I urge everyone to consider all the factors carefully before rushing to cancel their IP.

[NTL]

I thought a letter to the ST forum today makes a good read and some discussions:

http://www.straitstimes.com/premium/foru...s-20140626

I reproduce the letter below in case the url gets ineffective subsequently.

The writer (Mr Martin Lee) also has a decent post on his website:

http://www.martinlee.sg/time-drop-integr...ield-plan/

Personally, given that details on Medishield Life has yet to be released and the impacts on the IP plans, I think advise to people to drop their IP plans is rather premature. Other than the mean-testing that the writer writes abt, I think people will also have to consider further evolutions of the medishield plans, future capacities of B1/C wards among other factors to decide if one should drop the IP plans.

===============

THE advice given to readers last Saturday ("Medisave sum 'goes further in new plan'") was that if a person required only subsidised care (staying in B2 and C wards), then MediShield Life alone should be sufficient.

Anyone considering dropping his private Integrated Shield Plan (IP) because he is thinking of going for only subsidised care should also consider whether he is impacted by means testing.

With means testing, a person earning more than $3,200 a month or is unemployed but living in private property would receive a lower subsidy for his bill. The extra unsubsidised portion of the bill would not be covered by MediShield or MediShield Life.

I urge everyone to consider all the factors carefully before rushing to cancel their IP.

After reading the short letter, I don't think he is advising people to cancel their IP plans. He is asking everyone to think thoroughly first.

There are also people around me that have been talking about Medishield Life, and with the implementation, is an IP plan is still needed. Guess the news is getting people excited. For me, I will wait for further details regarding how the plan works, and what are the private insurers prepare to offer above it before considering.

[AlphaQuant]

After reading the short letter, I don't think he is advising people to cancel their IP plans. He is asking everyone to think thoroughly first.

I did not suggest the writer was advising people to cancel their IP plans - on the contrary i thought he made some good points to people of further factors to think abt before cancelling their plans prematurely. It's a pity the letter was published online and not in print as well.

[egghead]

Yes, there is a lot more to work out.

We also need to recognize that Medishield Life is a national program to extent insurance cover to those uninsurable, with pre-existing illness exclusion, etc. Therefore it is a program that will result in majority people paying more.

[NTL]

After reading the short letter, I don't think he is advising people to cancel their IP plans. He is asking everyone to think thoroughly first.

I was not suggesting the writer was advising people to cancel their IP plans - on the contrary i thought he made some good points to people of further factors to think abt before cancelling their plans prematurely. It's a pity the letter was published online and not in print as well.

Thanks for clarifying. I interpret your message wrongly. Apology for that.

[martinlee]

I thought a letter to the ST forum today makes a good read and some discussions:

http://www.straitstimes.com/premium/foru...s-20140626

I reproduce the letter below in case the url gets ineffective subsequently.

The writer (Mr Martin Lee) also has a decent post on his website:

http://www.martinlee.sg/time-drop-integr...ield-plan/

Personally, given that details on Medishield Life has yet to be released and the impacts on the IP plans, I think advise to people to drop their IP plans is rather premature. Other than the mean-testing that the writer writes abt, I think people will also have to consider further evolutions of the medishield plans, future capacities of B1/C wards among other factors to decide if one should drop the IP plans.

===============

THE advice given to readers last Saturday ("Medisave sum 'goes further in new plan'") was that if a person required only subsidised care (staying in B2 and C wards), then MediShield Life alone should be sufficient.

Anyone considering dropping his private Integrated Shield Plan (IP) because he is thinking of going for only subsidised care should also consider whether he is impacted by means testing.

With means testing, a person earning more than $3,200 a month or is unemployed but living in private property would receive a lower subsidy for his bill. The extra unsubsidised portion of the bill would not be covered by MediShield or MediShield Life.

I urge everyone to consider all the factors carefully before rushing to cancel their IP.

Hi everyone, I am the writer of that forum letter. To give an example (this was edited away):

The payable amount on a $20,000 bill at 80% subsidy is $4000. This amount would then be accessed under the Medishield Life claim limits.

A person impacted by Means Testings under the worst case scenario might only receive 65% subsidy. In that case, the payable amount becomes $7000 with the extra $3000 not claimable under Medishield Life.

I will be writing another article to talk about the other dimensions other than Means Testing.