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Is A Wholelife Plan Really Better For Your Newborn?

In this article, you'd see calculations for insurance coverage ideas for your newborn. 

We'd be comparing between 3 AVIVA plans: AVIVA MyEarly CI vs MyMultipay CI III vs MyWholelife plan III.

The comparison is really for illustrating the insurance concept. Hope it helps you in your decision making.

If your child is already a toddler or a pre-schooler, don't worry, the comparison points still hold.

Recap again on why you may want to cover critical illnesses for your child

It is true that because your baby is not a breadwinner, getting critical illness insurance coverage is debatable. 

I did buy one for my boy.

If he gets a critical illness, I believe the claim payout will come in handy to give the family less stress. In any case, buying coverage now creates a first layer of insurance and locks in premiums rates at a lower amount.

So if you are also on board with insuring your child, here goes the comparison points...

Covering with AVIVA MyEarly CI Plan

If you prefer term plans to reduce financial outlay, consider the AVIVA has a specialised Early CI plan.

The term duration is flexible and Early CI coverage means all stages of CI will entitle to a claim payout.

Below is a premium for an infant. Just $923.40/y to cover for $100,000 for a term of 70years.

Many insurers have early CI plans.

Once claim is paid, coverage stops. Death payout amount is only $5,000 and is not the focus of the plan.

Covering with AVIVA MyMultiPay CI III

AVIVA MyMultiPay CI III is also a term plan.

It lets you claim for 300% if it is a CI condition diagnosed.

In addition, they allow you to claim twice for early CI if it is a different  with NO waiting period.

Hence, coverage is much more than MyEarly CI plan and claim amount is bigger in many ways.

Surprisingly, premium amounts are lower. Only $725/year for $100,000 sum assured.

If it is CI claim, payout is $300,000 and plan does not stop. Premiums are waived as benefits are still entitled in "layer 3" and "layer 4".

Without a doubt, MyMultiPay CI Plan III would be better value to you over the Early CI plan.

Covering with AVIVA MyWholelife Plan III

Wholelife plans have a lot of customisation points. Like how many years to finish premium and how many times multiplier effect (termed as additional cover in this plan).

The limited pay function is really a strong benefit of a wholelife plan structure. Finish payment and transfer to your child the plan fully paid.

In the example below where Early CI is claimable at $99k and total CI claimable is at $300k ($99k Early CI Advance Cover III and $201k Critical illness advance cover III). There is a 200% additional cover.

The 10years premium plan works out to be $2,558.55/year.

It is the closest design for comparison against the MyMultipay CI III.

From the point of total premium, MyWholelife Plan III would be $25,585.50 vs the MyMultipay CI III which will be at $50,750.

Of course, time factor of money applies and that the MyMultipay CI has layer 3 and layer 4 for further claims.

Conclusions

The choice between MyMultipay CI III and the Mywholelife III plan is a personal one and depends on what you value: Investment cash-flow for yourself or the convenience to leave a fully paid plan to your kid.

The Mywholelife III plan can actually add on Multipay CI II as a rider.

In such a plan structure, whatever claimed on MyMultipay CI III does not accelerate sum assured from the main plan in such an instance. It has been popular with some of my private clients.

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Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://theastuteparent.com/josh-tan Practising financial planner with Promiseland Independent Pte Ltd. EXPERIENCE: More than 13years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.

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