Difference between personal and group plan

Dear Mr Tan

I enjoy reading your blog daily, especially topics on money markets and term insurance.

I recently bought the NTUC Income family insurance plan with living benefit rider for protection against 30 critical illnesses. I am paying a premium of about $24 per month for the term insurance. The plan will cover me till 64 years old with possibilty of further renewal.

NTUC Income came up with a new living plan for union members. The deluxe plan covers 30 critical illness as well but it seems to be cheaper.

Which product will you recommend?

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REPLY:

The coverage under a group insurance plan is subject to change on each yearly renewal. The premium may increase or the coverage may be withdrawn. Sometimes, the premium depends on the age in each year, and may be increased when you get older.

Generally, it is better to have a personal plan that provides guaranteed coverage.

My advice: Buy a basic amount of coverage under a personal plan (in spite of the slightly higher premium) and to take the additional coverage under a group plan.