Sunday, November 4, 2012

Update on my favourite life insurance plan (Aviva SAF Group Term Life) for Singaporeans

Last year, I wrote about my favorite life insurance (Aviva SAF Group Term Life) for Singaporeans. It is still my favorite today and I just got an update that the maximum coverage allowable has been raised to SGD1 million. This will cost SGD1536.00 annually and I signed up for it with little hesitation. Based on my personal experience, I seldom need to pay the full premium each year because Aviva gives partial refund of the premium at their discretion.

For Singaporean NSmen with dependents, this is a no-brainer if the objective is to use minimum sum of money to provide maximum protection for the family. This plan is open only for NS men and I am not aware of other cheaper plans. Fortunately, the policy holder can buy protection for his spouse at even lower cost probably because the wife has no risk of death from military accidents. This is the only plan I know of that protects against military mishaps. Singaporeans who have been through NS will know that this risk is not really that low.

Much of what I wrote in my first article for this insurance plan still applies. So, I shall not repeat here.

By the way, I will bet very few insurance agents or fee-based financial advisers will recommend this product. This product is so value-for-money that there is hardly any room left to pay for commission. I do not get paid a single cent for recommending this product.

For more details, please refer to the Aviva brochure and judge for yourself.

PS: I do not collect any commission from Aviva. In fact, I have never collected any commission for my product reviews. Just a happy customer who wants to share with fellow Singaporeans on the kind of protection that they should have to protect their own family.


  1. hi hyom, i wonder what is your rationalisation that you need 1 mil in coverage. did you cover the critical illness portion?

    1. Hi Drizzt,

      I just dropped a mail to you to wish you happy birthday!

      My goal is to protect my family in the event of my death (no critical illness portion). It serves as protection for my children, relief of burden for my wife and compensation for my parents, parents-in-laws and a relative who looked after me since I was an infant.

      $1m is not really that much when the money is to be distributed across 8 or more people.

      This may sound blunt. I think it is irresponsible for people with dependents not to buy life insurance. If something goes wrong, I want to make sure I do not leave shit behind. Also, peace of mind is very valuable for me. I do not mind paying for it. This is why I did not hesitate much when I upgraded my SAF Group insurance to $1m.

    2. hi hyom!

      thanks for the well wishes. i think i see insurance as some form of responsibility. but can't help but feel we have to balance the expectations.

      having said that i sometimes feel why things are cheap is because of the probability. the gamification comes when human beings are getting more illnesses at a young age.

    3. Hi Drizzt,

      When it comes to investment, I think in terms of probability. However, when it comes to insurance, I do not think in terms of probability but more in terms of the consequences. If a person were to think in terms of probability for insurance, then most likely he will end up buying too little insurance because the probability of bad events happening are usually very low. If the probability of the bad event is too high and obvious to the actuary, the insurance premium will become prohibitively high.

      I buy insurance for protection against events which I cannot afford to have them happen. If the premium is reasonably priced, it is like taking an affordable 100% loss to buy peace of mind as well as protection against an unaffordable disaster. I cut losses regularly in my investments. Buying insurance to me is akin to taking prudent small-sized losses to protect against more serious big-sized (or even fatal) losses.

  2. Hi Hyom,

    Thanks for the sharing. What you have found is gold. I would consider buying one for myself too.

    Death is a certainty. Therefore, you will definitely get the $1m. But if the insurance company goes bankrupt before your death then your $1m payment is not certain anymore. Anyway, with only $1536.00 annually, that policy is a steal. I have calculated that you need an interest rate of 8.5% and 50 years to turn your annual payment of $1536.00 to $1m with some change.

    I think that an annual interest rate of 8.5% for 50 years is very hard to get in SGD saving or deposit accounts. Therefore my conclusion that the policy is a good one.

    I use 50 years because i can expect my life to end at 80 years old, also a conservative estimate.

    However, $1m now is not the same as $1m 50 years later. With inflation, the $1m 50 years later will have less buying power than $1m now.

    Once again, thanks HYOM.

    1. Hi Andreas,

      The insurance policy covers until age 65 after which coverage drops to SGD100k to the age of 70. The insurance stops after age 70. As you said, death is certain. No insurer will cover a high probability event unless the premium is ridiculously high.

      The policy is really for protecting my family. By the time I am 65, my elders should be dead and my children grown up. There is no need for this policy anymore. Why should I bother leaving a $1m fortune to my children if they can take care of themselves?

    2. Hi HYOM,

      Using my age of 30, to turn the premium payment to $100k in 40 years would need interest rate of 2.4%. I guess this is still ok considering the benefits of the peace of mind and the $1m payment should anything goes wrong in that 40 years.

      I also use insurance policy to protect my young family. To be honest, once my first baby is born, I am scared of not being able to support my family. Especially my death or, even worse, permanent disability. My death would leave my family financially worse off. My permanent disability would make a financial armageddon.

      Fortunately, there is an insurance policy to cover these two events. I suggest to any of my friends with young family to take these policies with enough coverage to pay for their kid's living & education expenses to university.

      And don't forget to select a good insurer which should last longer than you do.

    3. Pogis may be a better alternative for public service staff- by NTUC. More competitive rates till age 50, thereafter Saf term is better. As for CI, no clear winner....

  3. Hi hyom hyom,

    Sounds like a good deal!

    I wonder if I am eligible for this as I do not have reservist liabilities.

    I just bought a $440K 10 years term life policy from AXA to cover death and permanent disability. This costs me $800+ a year.

    This is in addition to other life and endowment policies which I already have. You might wonder if I really need this $440K coverage since I already have other policies.

    The $440K additional coverage on my life is really for my housing loan which I hope to pay up in full within the next 10 years. However, in case I should kick the bucket in the next 10 years, my family would still get a debt free asset. :)

    I have been hearing of too many cases of people in their 40s dying quite suddenly lately... o_O

    Rounding up to the nearest thousand, a total cost of $9k for a $440k coverage over a 10 years period sounds ok, doesn't it? Some told me it sounds expensive.

  4. Hi AK71,

    This insurance policy is open to all NSmen. As long as you have served NS, you are eligible even if you have completed all your reservist duties.

    I remembered I had insurance protection for my HDB loan. If something bad happens to me, the insurance will pay off my housing loan. Not sure if you can find the same kind of insurance for your housing loan.

    The Aviva SAF Group insurance insures up to age 65. This should be better than most 10-year period term insurance plan for middle-aged people. On top of that, there are cash rebates in good years. There is also hospital cash benefit (up to $120 per day) after the 10th day of hospital stay.

    I do not know the details of your AXA plan. So far, the most value-for-money life term plans that I know of are Aviva SAF Group Term and NTUC Term Life insurance.

  5. Hi hyom hyom,

    Ah, I bought from AXA as a friend is an agent there. I decided that I should get a term life policy that is equivalent to the value of my remaining mortgage for the next 10 years and asked him to do the necessary. I don't usually like it when insurance agents try to sell me something. If I know what I want, I will call insurance agents. ;p

    I know all HDB owners are automatically covered by a mortgage insurance. Unfortunately, for private properties, the only insurance is a fire insurance which the bank which provides the loan makes us buy. Hence, the 10 year term life policy.

    I have never served a single day as a reservist and I have just been discharged after turning 40 last year. I did serve 2.5 years as a NSF though. So, does that make me eligible for Aviva SAF Group insurance?

    1. Hi AK71,

      I am sure you are eligible for the SAF Group insurance. You are a true blue native Singaporean who has sacrificed 2.5 years of his best years for the country like me. If you are not eligible, I will complain big-time to the government Reach forum. Please tell me if you are not eligible.

    2. Hi hyom hyom,

      Thank you very much for this. :)

      I will go take a look although I probably do not need additional insurance coverage now. Then again, how much coverage is considered too much? Haha.. ;p

    3. Hi AK71,

      If you think SAF group insurance is better for you, you can consider terminating your existing term insurance and replacing it with the SAF group insurance. Of course, I am assuming that you do not have serious pre-existing conditions.

      One thing good about term insurance is that one can terminate them without financial penalty.

    4. Hi hyom hyom,

      I have a history of asthma and although I have not had a relapse in many years, it is troublesome having to do health declarations etc each time I buy a policy.

      I have looked through the Aviva SAF Group Insurance. I must admit that it looks good. I would also save almost $200 a year in premium compared to what I recently bought from AXA. Over a 10 years period, that would be almost $2,000 in savings.

      However, the thought of having to go through the application process again is off putting. Then, I think about how my friend would lose out on his earnings. I do trust him to do the right thing in the event that something untoward should happen to me. Hopefully, my trust is not misplaced.

      Thanks so much for this blog post and for taking the time to reply to my comments. :)


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  8. You are right that few insurance agents will ever recommend this policy. They don't earn any comm for this. They would rather sell their own products. This is more or less a government product for ns men to buy to take care of themselves and their families. I think its very good especially if u buy it for your wife and kids. Its only $10 per month per $100k coverage.

    And by the way I posted on HWZ as bloodsucker haha

    1. Hi TS,

      I remember you on HWZ. Was wondering why you chose such a nick. You don't sound like a bloodsucker. I think you share more than you suck :)

  9. My wife who is Singaporean has Aviva has her policy. Its' to see it validated here as the right one!

  10. bamboo investments, aviva sells tons of different policies. The one we are referring to is the SAF Group Term Life. If u are not singaporean and your wife doesn't serve in the defence sector I doubt she'll be able to buy that..

  11. One thing that you definitely have to consider when buying life insurance quotes is the price that they all may cost. Thoroughly research the price of the insurance program that you’re going to buy and find out how much you’ll need to pay every month.

    Audrina Jackson

  12. Just to share with everyone here that all is not rosy with this policy. My husband bought this Group Term Life policy from AVIVA (not from SAF, but another government body). He passed away 9 months ago, and I filed the claims about 8 months ago. To date, I have not received any payment, and all attempts made to contact them by phone (was put on hold by a machine for over an hour each time) and email (totally no reply) was unsuccessful. When something sounds too good to be true, it probably is.

  13. You have a good point there, Audrina. Taking time to review the insurance quotes would give you an idea which policy could fit your needs, and to your budget as well.

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  16. I agree with the terms and conditions of your insurance policy. Compare life insurance quotes is very important to determine these facts like how much money will be needed each year but also for how many years it will be needed. If survivors are young when the insured dies, a substantial amount of money may be required to cover their living and educational expenses until they are able to begin a career.

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  18. The great thing about shopping for life insurance nowadays is you can compare the best companies locally. That's where you usually get your best deals. Thanks for sharing your positive experience!

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