Last Updated on 31, August 2015
Question: I am coming to 25 years old this year. What do you think of Aviva SAF Group Term Life?
Answer:
For $400,000 sum assured, it is better not to buy the Aviva SAF Group Term Life. Using comparefirst.sg, you can see that DIRECT – AXA Term Life cost $431 (guaranteed) a year covering death/TPD until 65 years old. On the other hand, the Aviva SAF Group Term Life of the same sum assured cost $51.20 a month (or $614.40 year) of which the premium is not-guaranteed. This is a whopping 42% more expensive!
For $1,000,000 sum assured, the Aviva SAF Group Term Life cost $128 a month (or $1536 a year) which is not guaranteed. On the other hand, the comparefirst.sg shows that the cheapest $1,000,000 term comes from AXA Term Protector costing just $911 a year. This means the Aviva SAF Group Term Life is 69% more expensive!! Even Aviva’s own MyProtector-Level Plus cost just $969.60 in annual premium for the same coverage and until 65 years old!
Another factor that Aviva SAF Group Term Life is not recommended is because it is a group insurance. I dislike group insurance. See Aviva SAF Group Insurance can be terminated without prior notice
Nevertheless there are circumstances which getting Aviva SAF Group Term Life is still recommended. When my son goes to National Service, I would buy the Aviva SAF Group Term Life of maximum sum assured of $1,000,000 for him. A 19 year old may not be able to buy such a high sum assured elsewhere because of financial underwriting. When he starts working and assuming no health problem, it is better to replace the Aviva SAF Group Term Life with a cheaper and better alternative as during that time, he may be able to pass the financial underwriting.
Note: This is not an endorsement on AXA Life’s products and nothing in this article should be interpreted as providing any financial advice to you. Please seek professional financial advice when purchasing any life insurance.
Update 31 August 2015:
I was asked also to compare critical illness coverage. The SAF Living Care which covers critical illness only covers up to $300,000. This Critical Illness coverage does not reduce the sum assured of the main plan. Hence, to ensure apple-to-apple comparison, I use another product which covers $1.3 million and with a $300,000 accelerating CI rider.
| Product | Annual premium | Remarks |
|---|---|---|
| SAF Group Term Life Insurance $1m | $1,536 | Covers death/TPD |
| SAF Living Care $300,000 | $360 (below 46); $810 (at 46) and increasing every subsequent until $4110 (at 65) | Critical illness coverage. Does not reduce the coverage in the main plan. |
| Product X | ||
| Product X - $1.3m | $1,104.92 | Covers death |
| Product X’s $1.3 m TPD | $156 | Covers TPD |
| Product X’s Accelerating CI | $424.80 | Covers CI. Will reduce the death/TPD benefit. |
Annual premium for Product X = $1685.75.
Annual premium for SAF Group Term Life ($1m) + SAF Living Care $300,000 = $1,896 increasing starting at 46 annually until $5,646 at 65.
From the above exercise, it can be seen that the SAF Group Term Life + SAF Living Care is terribly expensive!!
Like this article? Subscribe to my newsletter below for more.
Hi Wilfred, can i say that its more like the competitors are getting cheaper rather than SAF G is getting more expensive. if we use compare first, perhaps only AXA is the one showing they live up to no commissions amongst the rest of them.
Hi Kyith,
Aviva’s own product is also cheaper than AViva SAF Group Term Life and not just its competitors being cheaper.
Aviva SAF Group Term Life has no commission. By right, it should be similar to the Direct Purchase Insurance pricing.
I’m more inclined to agree with Kyith here. The SAF Group Term Insurance has been around for more than a decade at least and their pricing has only been adjusted once due to changes in terms. With the introduction of websites like CompareFirst.sg by the government, consumers have easier access to Direct Purchase Insurance policies and make comparisons. This will eventually increase competition and put pressure on SAF to get Aviva to improve their Group Term Insurance pricing.
Thanks Wilfred for spending time to do the research and writing this article.
Aviva’s own product Myprotector has already slashed its pricing long ago even before comparefirst.sg. Myprotector has been cheaper than the SAF Group Term for sometime.
I suspect its not easy to reduce the SAF Group insurance premiums because of the large pool of SAF regulars it is insuring. The pool is of very high risk in nature.
Just to check. Aviva SAF Group Term Life covers for accidental death from SAF training activites be it ops duty or ICT. It also covers events of war. Not sure if other insurance companies group term insurance includes these too.
Coverage for accidental death and death due to war is not unique to Aviva SAF Group Term. If in doubt whether your policy covers death due to war, consult your own financial adviser.
All I can say is that SAF/MINDEF rather bochap about going out on a limb to squeeze commercial companies to get the best deal for servicemen. I mean US armed forces can get much higher coverage (typically USD1 million, even for normal infantry private [ok ok I know they are paid damn well]), for lower premiums per dollar coverage. And they are definitely a million times more high risk than SAF.
I think the post is obsolete. Aviva SAF IS the cheapest now.
Thanks for informing. I did not know Aviva SAF Group Term reduced their pricing. I will look out for it once their website is updated.
Thanks Jimmy and Wilfred.
I just took a look at their respective websites and can confirm that AXA Term Lite ($431.48 p.a.) is cheaper than Aviva SAF ($614.40 p.a.) *provided* you share the OP’s profile (i.e. 25 years old, presumably male non-smoker).
The tipping point occurs when you are about 35 years old: Aviva SAF is then cheaper than AXA Term Lite ($627.20 p.a.)
It looks like the young sponsor the old under Aviva SAF’s unique pricing model.
How is it taken in totality with Living Care for CI and Living Care Plus for early CI? Seems quite abit cheaper compared to other term plans with early CI, but I think the number of illnesses covered for early CI seems lesser than normal early CI plans, hence the much cheaper price.
One thing that is not considered in Wilfred’s calculation is the annual rebate given by Aviva. Because all policy holders (like me) get a rebate of premiums every year depending on the profits made (which in turn depends on the claims incurred).
And yes, Aviva Group Insurance covers military training death and disability. Which many others dont.
The policy holder for SAF term is Mindef itself. In event of claim, the policy is paid out to Mindef. My question is , is Mindef contractually obliged to pay out to the insured’s family?
The insured person has no contractual rights since the group insurance is a contract between Aviva and MINDEF. You may wish to write to MINDEF what is their legal obligation with regard to paying claims to the estate of the insured person.
Hi Wilfred,
Thank you for your analysis on the Aviva SAF Group Term Life. As you may be aware starting from 1 Oct 2016, the Mindef & MHA scheme will replaced the Aviva SAF Group Term Life. I am sure many of us will appreciate if you could share your views on the product.