Calling all NS personnel in Singapore: Here’s what you need to know about Group Term Life Insurance with Aviva

Pros and Cons: Is the Group Term Life Insurance with Aviva worth it?
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Last Updated on by Tree of Wealth

Hey NS officers, do you know that you can opt for Aviva’s  Group Term Life insurance even after you’ve ORD-ed? Instead of paying for costly insurance plans, the Singlife-Aviva Group Term Life insurance offers comprehensive coverage at affordable premium rates.

It’s not just National Servicemen who can purchase this insurance. Any public officers working with the Ministry of Defence(MINDEF) or Ministry of Home Affairs (MHA) are eligible for this plan under the MINDEF & MHA Group Insurance Scheme.

You might be wondering whether this scheme is worth it. Let’s review some of the pros and cons of Singlife-Aviva Group Term Life insurance.

What is voluntary group term life insurance coverage?

Group term life insurance is term life insurance offered to all members of a certain group, which in this case are all National Service personnel (both regular and voluntary staff) and employees of MINDEF and MHA. Since the insurance is calculated at a group rate, it is generally more affordable than purchasing similar coverage individually.

This insurance is not the same as corporate insurance, payable by your employers.Instead, Singlife-Aviva offers a voluntary scheme for eligible members to top-up their insurance protection. You can choose the protection you need, add on riders, and even add your family members. Check whether you are eligible to purchase the Singlife-Aviva Group Term Life insurance in its product summary here.

Pros of Singlife Aviva Group Term Life insurance

In summary, these are the features of the insurance:

  • Affordable flat-rate premiums up to age 65 even if you are no longer serving or left MINDEF or MHA.
  • No medical underwriting requirement
  • Features include daily hospital cash benefit, TPD, death and terminal illness, as well as 24/7 worldwide coverage
  • Spouse is covered if insured passes away

The premiums offered by the Singlife-Aviva Group Term Life insurance is the most competitive rate in the market. For a coverage amount of $100,000, you pay $4.10 per month or $49.20 annually, which is fixed until you turn 65. You can also extend the coverage to your spouse and dependent. Using the Comparefirst website by CASE Singapore,  similar insurance coverage for a 35-year-old non-smoker, for instance, is $60 annually for Etiqa Term Life. Therefore, the Singlife-Aviva Group Term Life insurance offers an affordable premium advantage. Besides, even if you have retired from MINDEF or MHA or no longer serve National Service, you can continue enjoying this plan’s protection benefits.

In addition, no medical check-up and underwriting are required for up to S$250,000 coverage. For NS personnel who feel they require a higher sum assured, the good thing is that if your medical grading (at the time of employment or enlistment) is PES A or PES B or its equivalent, you will not require medical underwriting. You will need to apply for this plan within the first 30 days of employment or enlistment to qualify. This saves time because you don’t have to get a medical checkup just to purchase this plan.

It also offers a 100% sum assured payout for coverage amounts above $250,000 if the insured suffers from a total and permanent disability (TPD) or if the insured passes away in an accident. Similarly, for higher amounts, should the insured be diagnosed with a chronic illness that may lead to death within 12 months, an advance payment of 100% of the sum is assured. In addition, the coverage is worldwide. This means that if an unexpected event overseas leads to the insured’s disability or death, the insurance still covers it. So even if you have not purchased personal travel insurance for your overseas postings, you can be assured that Singlife-Aviva Group Term Life insurance will still cover unexpected expenses. There is also a daily $30 hospital cash benefit from the 11th to the 30th day if you are hospitalised.

Additionally, if you want to extend your coverage to your spouse and children, you may do so. The coverage benefits extend to your spouse and children at the same flat rate, until your spouse is 70 or your children turn 25 or get married, whichever comes first.

Cons of Singlife Aviva Group Term Life insurance

Here are some disadvantages of this plan that you can consider:

  • No long-term cash accumulation
  • No cash payout for premature termination
  • No surrender value
  • No hospitalisation cover
  • No critical illness cover without rider
  • No guaranteed on premiums amount
  • No control over the policy as you cannot nominate a beneficiary
  • Medisave not available for premium payment

If you are looking for an insurance plan that also offers some cash accumulation benefits, then this plan might not be suitable for you. As it has no savings nor investment feature, there is no cash payout when it ends or surrender value should you wish to terminate prematurely.

Furthermore, while the plan offers a hospital cash benefit, there is no hospitalisation cover. A  health insurance plan is still one of the most fundamental basic plan one can have. If you think that you might need additional coverage for hospitalisation expenses such as consultation fees and medicine.There is no critical illness coverage unless you purchase an additional rider. You will have to add on its Living Care rider that covers up to 37 critical illnesses including cancer, heart attack and kidney failure at an additional $2.40 monthly for $100,000.

For premiums, unfortunately, what you see in the Group Term Insurance are not guaranteed.

These premium amounts can change depending on the insurer or if the organisation, ie MINDEF or MHA wants to revise it. Therefore, should that be an epidemic, the insurer might revise the premiums. In comparison, private life insurance plans may have guaranteed premium plans, which will help you budget adequately for the future. Take note that you will not be able to use Medisave to pay premiums for this plan.

Finally, claims might be difficult to settle. This is going to be a challenge if you suddenly pass away and your family needs the money to settle any hospitalisation, funeral, or other outstanding bills.   Note that under this plan, you are not the policy owner. Therefore, you cannot nominate a beneficiary to benefit from the sum assured paid out. The Nomination of Beneficiary frame does not apply to group insurance schemes, so claim proceeds are distributed by the intestate law in Singapore if the insured dies. This can cause a family dispute if the claim proceeds are delayed, or when the family is unhappy about the monetary decisions made by the next of kin that inherits the payout

Then what happens should your family needs to claim from this insurance when the unfortunate happens? In the event of a death benefit, the first $150,000 is paid to the proper claimant, defined under Section 61 of the Insurance Act as the ‘widower, widow, parent, child, siblings, nephew or niece of the deceased (with proof of relationship). The payout of the balance is decided by a Court. For a TPD benefit, the policy will first pay a lump sum of $200,000 and pay the remaining sum assured in three annual instalments.

If the deceased had written a Will, the beneficiaries will have to engage a lawyer to apply for a Probate in order to access the payout. This process may take up to 6 months.

However, without a will, the family has to engage a lawyer to apply to the Court for a letter of Administration, which may a few years to resolve. As such, if you are using this policy to cover any unexpected events and you are the sole breadwinner in the family, this might not be the best plan to cover immediate liabilities such as mortgage loans.

Should I purchase the Singlife-Aviva group term life plan?

Overall, we think this plan is an excellent way to ensure you are covered in case an unexpected event happens. As a first insurance policy for those who just served their two years of compulsory National Service and are usually starting their first jobs or continuing with higher education, it’s an affordable plan. Besides, it helps to start building your health and income protection portfolio as early as possible. This plan offers a good starting point for those who have little savings when starting out.

 Refer to us for more help on financial matters!

Insurance matters can be confusing when you are new to the working world. Before you panic, let us tell you that adulting isn’t so hard!

We can help you get started to grow your tree of wealth. Whether you are a fresh graduate, a  newly ORD NS man, or just need more help planning your finances, our dedicated financial advisors are ready to work with you. We bring our wealth of experience and know-how of local policies to guide you through the most complex financial matters. Contact us for a non-obligatory consultation now!

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