Investment-linked policies, or colloquially know as ILPs, are policies that combine both protection and investment. Financial advisers (or at least errant ones) often promote these to consumers as a way to have the best of both worlds. It’s a controversial plan, with plenty of threads on forums cautioning people of its lack of utility.
In the previous comprehensive list of ILPs in Singapore, we briefly reviewed NTUC Income’s ILP offerings – VivoLink and VivaLink. In this article, fundMyLife takes a closer look at one of these two policies, VivaLink and reviews it.
Disclaimer: we are neither endorsing nor hating on these products, nor ILPs in general. We believe that there’s a time and plan for everyone. As such, it is all the more important that consumers are aware of the pros and cons of these products.
What is it?
VivaLink is a regular premium ILP. In the event of death or total and permanent disability (TPD) before age 70, the plan pays the basic benefit or cash-in value, whichever is higher, minus any applicable fees and charges. In the case of death or TPD due to an accident, you will also receive an additional 100% of the sum assured or $100,000. However, the additional money might be lower if certain risky activities are responsible for the accident.
This is a list of selected features of the plan that we thought were interesting/unique.
#1 Guaranteed insurance coverage in the first 10 policy years
A relatively attractive draw, since you’ll never know what might happen to you in the next 10 years.
#2 Additional riders
- Dread disease cover: dread disease is another term for critical illness, and if the insured individual diagnosed with such a disease he or she is paid the sum assured.
- Dread disease premium waver: The rider waives future premium payments for VivaLink if you are diagnosed with any of the dread diseases.
- Payor premium waver: If the insured person is not you – the policyholder and payor – and you die or experience TPD, future premium payments are waived.
- Enhanced payor premium waver: Similar to payor premium waver, except the waiver happens when/if you are diagnosed with dread disease as well.
#3 Benefits when life events happen
One notable feature is the ability to increase coverage without medical assessment when you enter new life events and/or receive additional units for increase in regular premium. NTUC Income defines life events as “turning 21 years old, getting married, purchasing a residential property or becoming a parent.”
There are a few more features that we observed, but were self-explanatory. For example, bonus allocation of units in the 15th and 20th policy year. There’s also a retirement option that allows you to reduce insurance coverage to $0 from 55 years old onwards to maximize wealth accumulation.
We here at fundMyLife love data. As such, it was fortunate that we found information on the yearly insurance charge for death and TPD for each $1,000 insured. Based on the data, it seems like the most important factors are sex and smoking status.
Based on the graph above, the yearly insurance charge for death and TPD becomes exponential after you’re 40 years old. Unsurprisingly, male smokers pay the most, followed by female smokers, male non-smokers, and finally female non-smoker. Female smokers and male non-smokers pay about the same for the annual insurance charge for most of the time.
As observed from the graph above, VivaLink is good for a relatively cheap death and TPD protection for an early part of your life. With the additional riders, you can also enjoy critical illness coverage and premium wavers in case of any mishaps.
The life event feature was interesting because of the acknowledgement that an individual’s needs change over time. This feature is useful because you require additional medical underwriting when you want to increase your insurance coverage. In addition, there’s no change in the monthly premium if you exercise the first option to increase coverage.
The extra dread disease/critical illness rider is useful, but there is no rider for early critical illness. For that, you will have to purchase a separate plan. In general, this plan is a useful plan if you are confident that you will enter/can enter the stated life events.
Fun fact: Muslims can consider NTUC Income’s offerings because NTUC handles Shariah-compliant funds in Singapore. The Takaful Fund invests in global equity markets via Shariah-compliant instruments.
That’s all folks! We hope you found the review useful and sheds more light into what VivaLink is all about.
If you’re still unsure what you need, why not head on over to fundMyLife and ask our curated pool of financial advisers? Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.
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