RATING: AVOID

This policy is for a male age 38. it covers death, permanent total disability and critical illness that occurs before age 75. If the policyholder survives without making a claim at age 75, the cover expires, and the total premium paid is "lost".

The annual premium for a cover of $100,000 is $2,296. Read the PDF below for more details of the cover provided by the policy.

The benefit illustration showed that the distribution cost is $1,700 for the first year and $599 for each subsequent year. This is the amount that is taken away from your premium to pay the commission to the agent and and other marketing expenses each year. It is quite a large sum for you to pay yearly.

The table below shows how much your annual premium will accumulate to age 75 at various rates of interest.

Annual premium | Interest rate | Term | Accumulated amount |

2296 | 3% | 37 | $156,494 |

2296 | 4% | 37 | $195,092 |

2296 | 5% | 37 | $245,005 |

If you can earn 3% interest a year, the total premium will accumulate to $156,000 when you are 75. It is $245,000 if you can earn a yield of 5% per annum (which is possible when you invest in blue chip shares.

To evaluate if this policy is worth buying, you should ask - what is the chance of making a claim before age 75? Is it more or less than 50%? I suspect that it is less than 50%.

If you are really worried about the chance of death or critical illness before age 60, it is better to buy a short term policy, where the premium rate is much lower. If you have already accumulated sufficient savings, there is no need to buy an expensive policy to cover critial illness.

TIP: Read the PDF to understand what is exactly covered under critial illness and the definition of the cover. I find it to be quite difficult to understand most of the covers. I prefer to ask the question - what percentage of people will make a claim, and the answer is probably quite low.

Tan Kin Lian

RATING: AVOID

This policy is for a male age 38. it covers death, permanent total disability and critical illness that occurs before age 75. If the policyholder survives without making a claim at age 75, the cover expires, and the total premium paid is "lost".

The annual premium for a cover of $100,000 is $2,296. Read the PDF below for more details of the cover provided by the policy.

The benefit illustration showed that the distribution cost is $1,700 for the first year and $599 for each subsequent year. This is the amount that is taken away from your premium to pay the commission to the agent and and other marketing expenses each year. It is quite a large sum for you to pay yearly.

The table below shows how much your annual premium will accumulate to age 75 at various rates of interest.

Annual premium | Interest rate | Term | Accumulated amount |

2296 | 3% | 37 | $156,494 |

2296 | 4% | 37 | $195,092 |

2296 | 5% | 37 | $245,005 |

If you can earn 3% interest a year, the total premium will accumulate to $156,000 when you are 75. It is $245,000 if you can earn a yield of 5% per annum (which is possible when you invest in blue chip shares.

To evaluate if this policy is worth buying, you should ask - what is the chance of making a claim before age 75? Is it more or less than 50%? I suspect that it is less than 50%.

If you are really worried about the chance of death or critical illness before age 60, it is better to buy a short term policy, where the premium rate is much lower. If you have already accumulated sufficient savings, there is no need to buy an expensive policy to cover critial illness.

TIP: Read the PDF to understand what is exactly covered under critial illness and the definition of the cover. I find it to be quite difficult to understand most of the covers. I prefer to ask the question - what percentage of people will make a claim, and the answer is probably quite low.

Tan Kin Lian