The quickest way to look at insurance is that everyone pays their premium which accumulates into a pool of money. This pool of money will, in turn, be used for anyone in the group that ends up having the need to claim for whatever the policy is intended for.
When it comes to insurance, getting the Aviva MINDEF/MHA Group Insurance is probably the first time most Singaporean guys purchased a policy for themselves. A lot of us will go on to decide if we should cancel the policy after we ORD. We are not really sure if that is the right decision and did our little bit of research.
During your term of service since 1 July 2016, the MINDEF/ MHA Group insurance is provided for personnel serving their term of National Service. After which, when they ORD, they have the option to continue coverage under the Voluntary Scheme.
The Voluntary scheme comprises of Group Term Life Insurance and Group Personal Accident, with a few available riders to choose from.
How they both work?
Group Term Life
The insurance pays for all forms of death (except suicide within the first year of insurance coverage), total and permanent disablement or permanent partial dismemberment due to illness or accident. NSmen and their spouses to continue to be covered up to the age of 70, long after the NSman leaves employment with SAF, ORD or completes serving his NS liabilities.
Benefits Of Group Term Life Under Voluntary Scheme
100% payout of the sum insured for Death and Total and Permanent Disability Benefit.
100% up to $400,000 for Advance Payment Benefit in an event an Insured Person suffers from any diseases which may lead to death within the next 12 months.
$30 per day Hospital Cash Benefit from 11th to 30th day of hospital stay.
Coverage And Premium Rates
Group Personal Accident
Personal Accident provides financial help if you suffer an injury, disability or die from an accident.
Benefits Of Group Personal Accident Under Voluntary Scheme
150% payout of coverage if Total and Permanent Disability is due to an accident.
Insured for simple fracture or fractures due to an accident.
Reimbursement of ambulance cost.
$10,000 of mobility aid upon Accidental Total and Permanent Disablement. $10,000 of Home Rehabilitation Renovation Expenses.
$250 Accidental Hospital Recuperation Benefit.
All these are covered worldwide, 24/7.
A Quick Comparison
With this, we go for the lowest coverage of $100,000 for each.
Assuming a 27 years old non-smoker who is not looking at coverage for Critical Illness at the moment.
We will be looking at
($4.10 + $1) x 12 months = $61.20 yearly
Using Comparefirst, the cheapest premium for Term Insurance with coverage of $100,000 is at $184 per year, which provides less coverage and no Personal Accident coverage. Hence, the Aviva MINDEF/MHA Group Insurance might just be the most affordable term insurance in the market.
If one chooses the maximum coverage of $1,000,000 for the Group Term Life Insurance under the scheme, he is only looking at a monthly fee of $41. The lowest on Comparefirst for the same amount of coverage is at $55 per month.
Given its coverage, it is also the most value for money in the market.
Why Is The Premium So Affordable Compared To The Rest?
There are a few factors which might have resulted in the cheaper premium when compared to some of the policies out in the market.
- The Aviva MINDEF/MHA Group Term Life Insurance does not cover Critical Illness unless you purchase a rider.
- The policy is an initiative by the government to recognise the efforts of National Service, hence, part of the premium is subsidised by the government.
- As mentioned in the first paragraph, this policy has one of the largest pool of people in Singapore, covering all NS men. This is probably why they are able to come out with such a competitive pricing.
This group insurance also gives out rebates on premiums from time to time which means that the cost is actually lower than what was stated.
Given the value for money of this plan, we believe that there might be a high possibility that this policy will fit into your plan as a whole.Like Seedly on Facebook, and be part of our journey as we bring you more timely and unbiased content on lifestyle and personal finance.