Continue policy beyond age 60?

Dear Mr Tan,

I have a Living policy with a clause which guarantee to pay a yearly amount of about $9000 for 10 yrs and 8000 plus for 15 years, if I were to convert to annuity at the age of 60.

Should I convert to annuity or keep paying for the policy. I have two other life policy from other insurance company. I will have no other source of income when I reached 60 and I have no children. My agent advised me to convert to annuity.

Reply: Ask the agent to find out the cash value of your Living policy at age 60 and the amount of annuity that it can convert to. You can make a better decision when you find out the actual figures. Also find out what the projected cash value of the policy is, when you reach age 65.

I am also thinking of surrendering my other two life policy when I reached 65 as the cover for the critical illness seems to stop at age 65 (not very sure of this - does cover for critcal illness stop at 65) and I will not have any source of income and may not be able to contiue paying for the premium.

Reply: If the critical illness cover is a rider that stops at 65, then this statement is true. If it is a whole life critical illness policy (i.e. like the Living policy from NTUC Income), then the critical illness extends to the whole of lifetime. Before you surrender each policy, ask the insurance company to quote to you the following:

a) Cash value now
b) Cash value in 5 years time
c) Total premiums payable for next 5 years.

You can make a better decision, when you have the numbers.

Read this FAQ:
http://www.tankinlian.com/faq/exist.html