Shall I continue Eldershield?

Dear Mr Tan

I need your frank advice. Should I continue with Eldershield? I read a letter in the Straits Times that the claim rate is very low, and that the insurance company is making a lot of profit.

Your advice, please.

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REPLY:

The claim rate is low now, because most of the insured people are still young. The experience in other countries show that the claim rate under this type of insurance will increase sharply after age 70 or 80 years.

You are only required to pay premium up to age 65, and you will be insured for a lifetime (without paying any more premium).

If the insurance company (ie NTUC Income or Great Eastern Life) make a profit of this scheme, they are required to give a refund of 50% of the profit every 5 years.

I suggest that you should continue to participate in the scheme.