Career whole life policy by ntuc income

[port]

Hi,

I hv a whole life policy(career plan) bought from ntuc when i was in NS. premium is 40/mth for coverage of 50k. premium is fixed and guaranteed till 85 yrs old.

annual premium is 480 while bonus declared for 2012 was 800+. cash value is abt 12k+ while premium paid to date is slightly more than 10k.

Would it be advisable to terminate this plan and use the cash value to buy a term plan for 50k or more coverage?

Thanks.

[Porkbelly]

Hi,

I hv a whole life policy(career plan) bought from ntuc when i was in NS. premium is 40/mth for coverage of 50k. premium is fixed and guaranteed till 85 yrs old.

annual premium is 480 while bonus declared for 2012 was 800+. cash value is abt 12k+ while premium paid to date is slightly more than 10k.

Would it be advisable to terminate this plan and use the cash value to buy a term plan for 50k or more coverage?

Thanks.

I do not know how to determine the returns for insurance, in that:

- is $800+ a good percentage?
- cash value of $12,000
( assuming you have been paying for 20yrs+)

But I would ask:

- what is this policy for?
- how much is 'sufficient'?

My opinion is that 50K is sufficient for the purpose of giving my survivors 1 year to grief and get moving with their lives.
Besides, there would be CPF,residual cash in bank, and perhaps Dependant's Protection Scheme. It is not sufficient if you have housing debts to pay.

Consider also the very important fact that beyond retirement at 65 ( or worse if unemployment starts earlier!) the premiums would still need to be paid. So, from 65 to 85 years old, its $480 x 20 = $9,600. Of course you may have the option of using your bonus to off set the premiums.

Ultimately, if you are still alive at 85... you get perhaps $75K. But do not forget that insurance is never an investment... its risk management.

[Bibi]

I assume $40/mth covers only death? What do u mean by premiums are guaranteed till 85yrs old? Does that mean beyond 85 yrs old, the premium might changed? I think it should be premiums are payable till only 85 years old right?

If your policy covers CI, my adviser told me b4 that old CI policies are worded not as specific as new CI policies and hence might be easier to claim. U might like to take that into account b4 u terminate an old CI policy.

Nowadays the life and endowment policies' returns are smoothen to prevent drastic drop in payout during a recession period. Hence if u do not need the money in a hurry, u might like to wait till recession then terminate the policy and transfer the returns to stocks investment for a higher return. It is advisable to purchase a term plan b4 u terminate the policy if u need the 50k coverage.

[port]

this policy has been with me for more than 20yrs.

is it the norm that annual bonus is more than annual premium?

annual bonus is calculated by (1.5% of assured sum of 50k)+(1.5% of accumulated bonus).

housing loan is covered by CPF home protection scheme till age 65 while dependent protection scheme covers till age 60.

one thing I like is premium of 40/mth is fixed till 85yrs old.