Question: I am coming to 25 years old this year. What do you think of Aviva SAF Group Term Life?
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.
|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 - $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.