Last updated on January 28th, 2019 at 05:01 pm
Many forumers believe it to be one of the most cost-effective insurance that you can purchase in the market.
What are the pros and cons?
I have done a throughout analysis on the plan for you to consider covering yourself and family members with this group plan.
In July 2016, the MINDEF/MHA Group Insurance replaced the current SAF Group Term Insurance. The insurer remains as AVIVA Ltd.
For simplicity of this article, let’s refer it as SAF Group Term life plan.
With this new grouping (and perhaps some backend negotiation), the insurance premium rates have been further lowered.
The Group Term Life premium is indeed cheap but only up to age65
At $4.10/month for $100,000, it’s really hard to beat. This is pure death + TPD coverage.
However, at age of 66, premium jumps up by 20x!!
This table for the brochure cannot be found now. All applications are online here with this link.
In addition, $250,000 worth of sum assured can be bought without need to provide evidence of insurability.
I bought a $100,000 coverage for myself.
In the event I am unwell, I will likely increase the coverage amount to $250,000.
Do note that no death benefit is payable under if it is caused by any pre-existing condition unless the Insured Person has already been insured continuously for 12 months under this policy.
IE, this is an exclusion clause for death due to pre-existing conditions within 12months of policy.
Critical illness (CI) coverage is capped at $350,000 only
If you are thinking about the critical illness coverage from the SAF Group Term plan, it may not be the best idea.
This can be bought by the Living Care Rider.
$350,000 is not likely sufficient for all your critical illness needs?
Let’s run through an example that anyone can relate to.
– Loans for car or house of $100,000
– $2,000/mth expenses to cover over 25 years
That’s possibly $700,000 needed for critical illness coverage.
Hence, it is important to plan critical illness coverage with a personal plan.
Living Care Plus Rider has a very limited scope!
If you are looking to cover comprehensively, this rider is very limited.
It covers 10 early CI conditions. A personal early CI plan will likely have more than 70 early and intermediate conditions these days.
The cap for the Living Care Plus Rider is $300,000 and at some ages, it can be even cheaper that the Living Care Rider.
Critical illness (CI) coverage by the Living Care rider is likely expensive
As shown in the table below, the premiums are on an escalating scale.
It almost doubles at each age band from ages 31-35 onwards.
I pulled up MyMultipay CI plan which is also issued by AVIVA as a personal CI plan for comparison.
Premiums are at $94.60/mth for male age 31 covering $300,000 for Critical illness.
Firstly, it is cheaper on a average premium basis.
Secondly, it offers a much more comprehensive coverage than the Living Care rider with payouts for early critical illness and cancer relapses.
You may read our analysis on AVIVA MyMulitpay CI III plan here.
More importantly policies are underwritten individually and I feel it gives greater certainty in premium stability.
- Do note that even for personal CI plan, premiums can be level but non-guaranteed.
Critical illness (CI) wordings for “exclusion” seem to be different from a personal plan CI
I have some further concerns. In the “Living Care rider” policy wordings for exclusions:
“No benefit shall be payable under this policy in respect of any CI DIRECTLY OR INDIRECTLY, WHOLLY OR PARTLY CASUED by or arising from or contributed to by ANY of the following:-ANY condition or illness which is existing (whether or not the insured person is aware of the same) or the cause or the symptoms of which are existing or are evident or ANY condition or illness which the insured person is suffering….”
I’ve checked against those from my personal term plans which have more stringent underwriting.
The policy wordings for exclusions only state“pre-existing conditions that is not communicated to us (unless the condition has been declared and accepted by us)”
Premiums for the SAF Group Term plan is non-guaranteed.
Will the policy wordings prevent claims when we need it in future?
Even if it is as claimable as a personal plan, will the loose underwriting result in excessive claims down the years?
These are some questions to perhaps consider the SAF Group term plans to be a complementing part of your portfolio.
Premium rates are non-guaranteed.
Some claims will be from policy holders who were not healthy yet gotten coverage.
AVIVA has the right to easily raise premium rates for the whole group to compensate.
Group personal accident (PA) coverage is cheap
The SAF Group PA plan covers for accidental death, TPD due to accident and Total&permanent dismemberment due to accident.
Personal PA plans are more slightly expensive in comparison.
If you are active in sports, consider buying a personal PA plan as it is more holistic in coverage.
It will cover your medical treatment/TCM/scans/MC due to accidental injuries.
Click here to read more: BEST PERSONAL PA PLAN
Recommendations for you
This MINDEF plan is a form of group insurance.
The rates are similar to group plans that are offered by big corporations.
The pros and cons have been highlighted above and do note the premium changes at different ages.
If you are looking a professional assessment on your insurance, contact me at the bottom above.
The views and opinions expressed in this article are those of the author and do not represent the views of any other organisation.