Thursday, October 21, 2010


Hi Mr Tan
My husband and I were recently approached by an agent to buy this policy - we are in our mid 30s and the agent suggested that we get covered for $160,000 and pay the premium of $350 monthly for the next 28 years. (She wanted us to pay the premium annually but we didn't see the sense of that, except that she gets to enjoy her commission quicker.) 

She had initially also wanted us to sign up for $350,000 coverage with premiums paid till we are 84 but the premiums are far too high for us to afford for such a long period of time. 

We hope you can help shed some light on whether this policy is worth buying. Reason why I'm asking is because my husband recently gave me your book on financial planning and you warned against buying whole life insurance. Before I ring the agent to stop the policy, I just wanted to make sure that we are making the right decision.

In the product summary, it states that Vivolife is a participating regular premium whole life plan that covers death, total and permanent disability, and dread policies. Vivolife combines the best of insurance coverage and long term financial planning. Vivolife is ideal for those seeking high insurance coverage and the benefit of regular savings.

We would really appreciate if you could help us, and we will pass this information onto our friends who are also planning for their retirement and children's education.


Get the benefit illustration and calculate the two indicators show in in this FAQ:

I have seen a previous benefit illustration which showed that the policy provides a poor yield. But it is better that you compute it from the benefit illustration. You can send th benefit illustration for me to confirm your calculation.


Unknown said...

why does one need to insure till 84?likely one is already dead or is financially independent?

Wa Lau Tan

zhummmeng said...

High coverage? long term saving plan?
Better switch off your mobile and tell the agent to fly kite.
$350 monthly for $160K coverage is high coverage?.I think you are a professional and you need 5 times your salary,let say $300K coverage and a term plan might cost less than $100 a month. The $250 can be saved in a regular saving plan with easy return of 6-8%.(BEWARE!!!don't be conned into buying the vivolink...)
Separating insurance and saving is the best way to approach your needs.You don't get trapped and be held for ransom for life and at the mercy of the insurer.
Vivolink is too expensive as risk management product and lousy saving plan (projected return only 2.5% after 25 years. In real term it is LOSS).It has NO financial planning value.

Spur said...

Based on female, last b-day 36, $160K sum assured, $333.70 per month premium.

Effect of deduction after 25 years range from 33% to 36%.

Yield after 25 years range from 0.6%pa to 1.8%pa.
The yields are not guaranteed.

Frankly I don't remember the figures being so bad when I looked at them last year. I doubt if senior mgmt of NTUC will even want to buy if they see this figures, even after factoring the 5% premium discount that NTUC staff gets.

For your husband, the figures are even worse. As cost of insurance is higher for guys.

Tan Kin Lian said...


The benefit illustration for the Vivolife policy showed a deduction of 33% and 36% of the accumulated premium (based on the two assumed yields) at the end of 25 years. The deduction is too high.

A good policy should take away not more than 20% of the accumulated premium at the end of 25 years.

It is better for you to buy term insurance (if you really need the cover for your children) and to invest in a low cost investment fund.

The total deduction for the term insurance and fund fees should not exceed 20%. It should be much lower.

This will give you more money at the end of 25 years, and more flexibility in case you need the money earlier for other purposes.

A life insurance policy penalises the policyholder who needs to change this financial plan.

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