Saturday, January 27, 2007

Can I stop paying premium on my Living policy?

Dear Mr Tan

One of my living policies has been in force for 18 years. The total premium paid is $22,356. But the cash value is only $21,221.1, less than the total premium paid and cannot even breakeven. I am rather disappointed. Due to my age, I may not be able to continue paying for the premium, Mr Tan, what is your advice??

Mr Tan, I understand that you are leaving INCOME on 1 Apr 2007. You have done a lot and lot for the policy holders. especially the extra bonus every 5 years.

I would like to take this opportunity to thank you and wish you well, healthy and every successful in your future endeavours.



Dear EN

The Living policy has a large coverage (ie death and 30 dread disease). This explains the reason for taking a long period to break even.

At any time, you have the option to stop paying the premiums, and keep it as a "paid up" policy with a reduced sum assured, or to cancel the policy and get the cash value (in which case the insurance coverage ceases).

My advice is to keep the Living policy up to age 70 and terminate it at that time. You can pay the premium out of your past savings. However, if it runs out, then you can consider the "paid up" or "surrender" options.

The good news is that the bonus rate for the Living policy will be increased this year.

Tan Kin Lian

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