A Good Deal? – Incomeshield Plan Upgrade with NO underwriting

By Paul on May 28th, 2009

Recently, NTUC has launched a promotion on a Free upgrade for their IncomeShield Plan. You can find more about it here.

Mike has also blogged about it briefly here with a summary.

Well, as with all good deals, it spurred me on to find out more so I emailed by financial advisor about it. This is what she said. (she’s excellent and very responsive!)

—–

This exercise benefits few and selective people.

Criterias:

1. below age 30

2. no claims

I have only one person in my whole client base who could make use of this. A 9 years old child with no claim history. In fact, it was automatic. I just received the e-policy.

Objectively assessing this offer, NTUC chooses the good apple (young and no claim history) and provide NO underwriting to upgrade.

This helps NTUC to reach people from their database that their FA neglected.

It creates an immediate boost of “sales revenue” by bringing healthy people who are paying for Incomeshield B to Enhanced Incomeshield Basic. These people who has no claim history meaning healthy people.

For healthy people, even if they were to submit for underwriting, they should breeze through.

By bringing these healthy pool to higher plan. It magnifies future income as medical plans are age banded i.e. someone paying Incomeshield B, now pays EIS Basic and would increase further with age.

Aid publicity.

Risk to NTUC?

Cases where there is hereditary diseases and has not manifested and therefore no claim to-date.

Statistically there will be some, but percentage would be low and it would have been taken into consideration by acturial.

Who does it help and how?

It helps family whose parents are so busy or ignorant that they left their children’s policy on the old sublimit plans.
It helps children or young people (below age 30) who may have hereditary problem that has not show up yet.
It helps young adults who has not met any FA to boost their coverage.
It helps family whose FA has left and they are left with no servicing agent (or the new assigned person not quite interested to spend time to do medical plan as reward is not justifiable)

This is what I could see. No harm to allow the auto-upgrade but individual should seriously consider a plan that fit their long term need. I would advocate take the best/higher plan if a person is young and healthy. Don’t be complacent and stop at this free upgrade.

—–

Any thoughts?

Passive Income for Life