Seth’s Blog on Finance

Aviva New Whole Life Policy – MyLifeChoice

Aviva is introducing MyLifeChoice, a new participating whole life insurance policy that features a Minimum Protection Value (MPV) and Guaranteed Extra Protection (GEP) option amongst other new features. Aviva MyLifeChoice replaces IdealLiving, Aviva’s previous whole life offering, and marks the extinction of guaranteed premium rates for critical illness coverage in the market.

MPV has been a feature offered by notably Manulife, Tokio Marine and NTUC Income, Aviva enters the fray with an MPV of up to 275% (depending on age) of the sum assured. Whole life insurance are typically quite expensive per dollar of sum assured which MPV seeks to alleviate, somewhat like having a term policy on top of your whole life policy only that it is integrated into the latter itself. If you have purchased a sum assured of $100,000 and have an MPV of 200%, the coverage payout will be $200,000 if a claim is admitted during the tenure of the MPV. MyLifeChoice has an MPV period of 20 years.

GEP allows one to increase his coverage upon certain life stages such as change in martial status (marriage or divorce), having a new born or legally adopted child, or graduation from tertiary education without health underwriting.

Further to the above, MyLifeChoice has other features like Advance Cash Withdrawal (ACW) option which allows the policyholder to withdraw a lump sum amount after the person assured turns 65 (age next birthday) onwards. After withdrawal, the basic policy will become a pure protection policy which does not participate in future bonuses or accrue with cash valuse. Also, there is a Waiver of Interest Benefit (WIB) which helps a policyholder pay overdue premiums without interest due to inability to pay as a result of being retrenched or unemployed.

There are definitely a lot of acronyms and features with this plan. Aviva also claims to have the most competitive guaranteed and projected cash values in the market against its two keen competitors within this product class.

An illustrative example of MyLifeChoice for a 30-year-old man of $150,000 sum assured on Death, Critical Illness and Total & Permanent Disability (minimum payout of $300,000 for the first 20 years of the policy due to MPV) costs $336.20 per month payable for 20 years to obtain whole of life coverage.

For the precise terms, conditions and exclusions of these plans, please refer to the relevant policy contract. You should seek advice from a qualified financial adviser representative before making a commitment to purchase any insurance plan.