Monday, November 27, 2006

How to overtime the Time Bomb

Two years ago, a journalist wrote about the "time bomb" in several investment-linked products. The key feature of these products is the higher cost of the life insurance cover as each year passes by. At some stage, the cost of the cover is more than the monthly premiums.

The products sold by NTUC Income do NOT have this feature. If you have invested in the products of some other insurance companies that have the "time bomb", this is what you can do.

- Ask your insurance company to confirm that you are allowed to cancel the life insurance cover at any time. In most cases, this is allowed.

- Check the premium rates for the life insurance cover for the future years, until you reach age 65.

- Compare the total premium with the low-cost term insurance cover offered by NTUC Income for the same sum assured and number of years. You will probably find our premium rates to be (perhaps) 30% lower.

If your insurance company insists that the life insurance cover cannot be terminated separately, you can consider to terminate the policy entirely and re-invest your money in our Flexi-Link plan.
Flexi-Link

You can buy the term insurance separately.

Low cost Term Assurance
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2 comments:

william said...

Hi Mr Tan,

Is the premium for i-Term fixed for the entire period of the term policy at the rate based on date of inception? The FAQ on the Income web site stated that the premium is depends on the gender, age of entry, sum assured and term and is guaranteed for the term of the policy. However, the i-Term brochure and application form has a conflicting statement saying that "The policy is renewed automatically unless we are told
otherwise, up to age 79 last birthday. Premium payable
upon renewal will be based on prevailing age and premium
rates at the time of renewal".

Thanks for clarification.

Francis

November 28, 2006 5:52 PM
Tan Kin Lian said...

I am sorry about the delay in replying to this question. The premium for i-Term is now fixed for the duration of the policy.

The brochure that you refer to could be for another plan.

December 11, 2006 10:06 AM

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