Last Updated on 15, April 2014
Today, TM Asia Life launch a new product called TM Peace of Mind (CancerCare). The plan offers to pay out on diagnosis of an "early stage" cancer. The product summaries for male and female can be downloaded at these link: TM Peace of Mind (CancerCare) for male and TM Peace of Mind (CancerCare) for female respectively. Existing TM Asia Life customers can get 5% discount on the premium (throughout the premium term) and 10% of if purchase of the CancerCare is done concurrently with another TM Asia Life series policy. In my preliminary reading, I got a shock to notice that female pay 45% more than male! This is my commentary on this new product:
Analysis of insurance product goes by the basic rule: analysis based on needs and necessity. This CancerCare product only provides 10% of the sum assured for death benefit. Since the maximum sum assured per life is $300,000 it implies that the maximum death benefit possible is only $30,000. Based on this small amount, we can automatically rule out the usage of this product for survivors in the event when the insured dies. In other words, the CancerCare cannot be used for death benefit.
Secondly, the coverage is very specific to Cancer. Moreover, the product is marketed as providing a payout for Early Cancer. However, this Early Cancer payout is only 10% of the sum assured. Granted that one can claim up to 5 times for repeat of Early Cancer claim but the repeated claim must not be due to the same organ. What is the probability of having another early cancer due to a different organ? It will be good if the product also cover the relapse from the same organ. Thus, in my opinion a realistic payout due to Early Cancer is only 10% sum assured or maximum $30,000. If $30,000 is meant to reimburse hospitalization surgery and cancer treatment therapy, than a more suitable plan is a good as-charges shield plan. One shield plan provides a yearly reimburse limit of $500,000. Such a shield plan is a better hedge against medical cost. If the CancerCare is used as a hedge against the lost of income, than any prudent person should have at least six to 12 months of liquidity. Thus it mean that the hedge against temporarily lost of income is not necessary although it is “nice to have.” However, insurance should be bought on necessity – not “nice to have.” For those who are worried that there could be potentially longer duration of lost of income, a disability income insurance is more appropriate as it is not restricted to a narrow cause of lost of income.
Third point of analysis: upon diagnosis of Level 2 Major Cancer, the entire sum assured (or the reduced sum assured if previously an Early Cancer payout has been made) will be paid out. This is more interesting as the payout can be large depending on the sum assured purchased. However, I checked – the definition of Level 2 Major Cancer definition appears to be identical to the LIA’s standardized Major Cancer definition. If this is the case, than this CancerCare’s Major Cancer definition is the same as those in traditional whole life plan. If this is going to be the same as the traditional whole life plan – why not get the whole life plan instead since it also covers another 29 critical illness?
Conclusion: TM Peace of Mind (CancerCare) is nice to have but not a necessity.
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