Should I Surrender My AIA Insurance Policy?

Last week, when news of the possible collapse of AIG reached Singapore, many AIA policy holders were fearful of losing their hard earned money. Despite the announcement that the US government was providing a US$85 billion (S$121.3 billion) lifeline loan to AIG in exchange for a 79.9% equity stake, many policyholders queued up to surrender their policies last week.

Now, after many assurances from AIA and MAS, many of these policyholders are re-instating their policies without penalty or cost to themselves, courtesy of AIA.

Last week, a few clients of mine called me if they should terminate their AIA life insurance policies. I advised them that they should not terminate their policies.

Why?

5 Reasons Why You Should Not Terminate Your AIA Policies

1) What was your objective of buying the policy in the first place? Has your objective been met? Is your insurance coverage still applicable to your present and future needs? If yes, keep it.

2) Are you still healthy now? Yes? Are you sure? All existing illnesses whether you know it or not will be excluded upon a claim, subject to the actual terms and condition of the new insurance policy. If you are not sure and have not done a full body medical check up, keep it.

3) Are you willing to pay higher premiums? The policy that you bought 15 years ago when you were a young adult will be a lot cheaper than if you were to buy one now at the same amount of insurance coverage. If you are not willing, keep it.

4) If you are using this "crisis" as an excuse to get rid of your policy, please reconsider as you may regret it if something unfortunate were to happen to you after you surrender your policy. If you are still the responsible adult, keep it.

5) If your policy matures next year, and you think that you have made some profit and feels that it is OK to get out now. STOP! You will lose all the "Maturity Bonus" which will kick in at the end of the policy term!!! This amount can be quite substantial, so do not be rash. If you want to reap a good return on your savings for the past 20 years, keep it.

If you are still not convinced, call me for a FREE review of your insurance policies so that I can give you a better picture of your insurance planning.