Tan Kin Lian's Blog: NTUC Income offers the lowest premium for Term Insurance

Thursday, August 31, 2006

NTUC Income offers the lowest premium for Term Insurance

Many Singaporeans are under-insured.

In the past, many people buy endowment and whole life policies. But the premium rate is too high. They are not able to get adequate insurance cover.

To get a higher cover for a low premium, you can buy a term insurance. It provides protection only and does not have any saving or cash value. It covers death and permanent total disablement.

NTUC Income has recently reduced the cost of term insurance. It now offers the most competitive rates for term insurance.

For example, a 35 year old man can insure for $500,000 for 20 years by paying only $760 a year to NTUC Income. The same policy cost $1220 at Great Eastern, $1045 at AIA, $955 at AXA Life, $832 at AVIVA. This comparison was recently reported in the Business Times.

If you wish to buy low cost term insurance to cover your family, call 62 INCOME ( 6246 2663).

7 comments:

globevestor said...: It is a fact term insurance has lowest premium. That is why I am always having difficulties in justifying whole life insurance with major illnesses protection for healthy young grads. Most common reasons for buying whole life insurance are illnesses protection and cash value/investment. But I have doubts. First, is the extra premium for illnesses protection justified if the probability of a healthy youngster being infected with terminal illnesses is statistically insignificant? Second, is it cheaper to invest in broadly divesfied unit trusts regularly than to pay extra premium for cash value/investment in view of the current sales charge for unit trusts is 2.5% and below? Can someone enlighten me? I am more incline to get term life and invest in the saved premium in broadly divesfied unit trusts regularly. You may ask what if you afraid that you cannot commit to regluar investment scheme on your own. My answer is if you are not disciplined, what make you think that you can commit to paying insurance premiums for a long time? Then you may afraid to lose money in your investments. Again, nobody can guarantee future performance, not even the professionals.; September 01, 2006 10:13 AM
Justin Lim said...: Some companies pay TPD via installments. I bet you don't know about that...

Do you know how much you loose if you are insured $500,000? Instead of getting $500k, you get $50k in the first 4 years and the remaning 60% in the 5th year.

If you get $500k in year 1, just invest $300k and if the return is 9% pa, for 4 years, you'll be getting $423k. That's an additional $123k for you.; September 07, 2006 12:08 AM
Tan Kin Lian said...: Justin Lim's facts and calculations are not correct. I do not wish to engage in an argument with him.

I am sure that he will recommend that you pay a higher premium to buy the product from his insurer.; September 07, 2006 5:22 AM
globevestor said...: Since publishing about my dilemma/view in recommending whole life insurance to healthy young grads, I have received a few replies : three replies from insurance professonals and one reply from general public. One said the person need to get both term insurance and whole life insurance because term insurance only covers up to certain age. Two said it depends when the person is going to die. One said a person cannot predict his future, therefore the person must get whole life insurance.

My reply:
My dilemma has two parts : the subject is healthy young grad and the question is whether the person should get term insurance or whole life insurance. The majority of those who reply give much emphasis on the question but not the subject. If one cannot predict the future, of course it is better to be on the safe side. However this approach ignore the fact that healthy young grad has limited financial resources. The person probably has spare cash of a few hundred dollars every month. How do the person allocate this scarce financial resource? I think the sensible solution should address two areas : protection and wealth accumulation. In my view, it would be much cheaper to use insurance policies solely for protection. Therefore the spare cash should be divided into two parts : one for protection, the other one for wealth accumulation. How much should the young grad allocate spare cash for protection? I think it depends on the financial duties of the young grad. If the person do not have debts, wife and children and their parents are not depend on them for retirement, then the only financial duty is cost of funeral. Since they can not predict major illnesses, a small portion of protection cash should go to whole life insurance. The portion of cash to protection of major illnesses is small becasue the risk is relatively low and the need for wealth accumulation is higher.

Warning:I am a financial software developer and not insurance professional.; September 07, 2006 12:17 PM
Justin Lim said...: Kin Lian,

Please do not assume the worse of everyone who gives an alternative opinion.

If my facts are wrong, then it is probably time for NTUC Income to change the Terms and Conditions found on your website. I refer to Para 2a and 2a(ii) of the following document.(http://www.income.coop/forms/insDocument/term.pdf)

I am not interested in selling anyone here any insurance as I make it my professional practise to contact only prospects who are referred by my existing clients.; September 08, 2006 11:15 PM
Justin Lim said...: Instead of just saying NTUC Income has the cheapest premium for Term Insurance, I am simply suggesting that other facts should be included.

This would include the payout method as well as the difinition of TPD (which differs from insurer to insuer).

This is only fair to the consumers and this is how the consumers are then truly educated.

Give them the information and let them make the choice.

You are simply doing what you accuse other of doing. You do not give details and sell by enticing consumers with "lowest premium". That's unethical or unprofessional, in your very own words.

I can be sure this will not get posted.; September 08, 2006 11:22 PM
Justin Lim said...: Hi Kit Leng,

I am not from NTUC Income and thus will not attempt to answer your questions on Kin Lian's behalf. However, I have copied their i-Term Plan Terms & Conditions and posted it below for your reference. If you wish to sight the complete document, you can go to NTUC Income's website at http://www.income.coop/forms/insDocument/term.pdf

"c) Total and Permanent Disability shall mean:

(i) the complete and continuous inability of the Insured at that time and at all times thereafter to engage in any business or occupation or perform any work of any kind for remuneration or profit; or

(ii) the total and irrecoverable loss of sight of both eyes or the loss by complete severance of both limbs at or above the wrist or ankle or the total and irrecoverable loss of sight of one eye and the loss by complete severance of one limb at or above the wrist or ankle will also be regarded as constituting total and permanent disability."; September 16, 2006 10:02 AM