Daniel Lee
Things you didn't know about Aviva's MINDEF Group Insurance (v.s. private term insurance)
Updated: Oct 20, 2020
This article will help you address the question of whether you would be better off getting private term insurance or Aviva’s Mindef group insurance for your coverage needs.
A crash course on Aviva's Mindef Group Insurance
Pros
Cost is cheap for death and personal accident insurance coverage till the age of 65
Policies are accumulative and not accelerative (e.g. claim in CI coverage will not reduce the sum assured of death coverage)
Cons
Coverage only last till the earlier of when either your spouse reaches the age 70 or your children reaches the age 25 or get married
Early Critical Illness coverage is not comprehensive - only 10 conditions.
Low claim limits for early and late-stage critical illnesses – which may not be enough
Premiums for critical illness coverage are not leveled and increases with age
Maximum claim/coverage limits:
Death: $1,000,000
Personal accident: $600,000
Early-stage critical illness: $300,000
Late-stage critical illness: $350,000
Premium behavior
Mindef Group insurance vs Term life insurance
From the chart above, it is evident that:
Mindef Group insurance is not a sustainable option after the age of 45
Based on the total cost of policy from purchase age till age 65, purchasing private insurance will always be cheaper than mindef group insurance
Basis of comparison:
Male, non-smoker
Coverage duration from age 21 to 65
Coverage: Death: $1,000,000 & Late stage CI: $350,000
ECI and Personal Accident plans will be removed from consideration as they are not an apple-to-apple comparison.
Long Story Short
Aviva's Mindef Group Insurance is good for their death coverage given the cost payable and benefits receivable.
As to the use of Mindef Group Insurances for Early and Late-stage critical illness coverage, it is not beneficial to you as:
Cost increases based on age band
ECI coverage is not comprehensive
Personally, I would prefer the use of private term insurance as:
Coverage is more comprehensive
Cost is leveled and calculated based on the age of entry
Flexibility in selecting your insurance duration – ability to tailor to your needs
Let’s not forget that we have yet to consider the option of whole-life insurances.
For analysis between Investment-Linked Products vs Whole-life vs Term-life insurance, you can read the article I wrote here.
If you are considering your options for your insurance planning, you can reach out to me to:
Tailor an insurance portfolio that provides the coverage you need over-time
Compare the insurances that are suitable based on your situation
Restructure your insurance portfolio and make it more cost-efficient
Receive all the information you need with ease by working with me instead of spending weeks trying to figure things out on your own.
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Daniel is a Licensed Independent Financial Consultant with MAS and a certified Associate Wealth Planner that provides advice in the following areas:
for investment and portfolio management advice - find out more here
for insurance planning and portfolio optimization advice – find out more here
for retirement planning advice– find out more here
Disclaimer:
This article is meant to be the opinion of the author and is for information purposes only.
This article should not be seen as financial advice
This advertisement has not been reviewed by the Monetary Authority of Singapore
