The fries to your burger, add-on riders could drastically level up an endowment’s lacklustre insurance coverage. Here, we’ve rounded up the useful ones to look out for.
Endowment plans, an instrument that combines savings and insurance, does not offer much in the way of insurance coverage.
In fact, it’s often advised that we don’t rely on them as our sole cover. On their own, endowment plans do offer some insurance coverage, usually through a death benefit. Other plans may also have added coverage against terminal illness or total permanent disability (TPD) at a minimum of 101% of the total premiums paid.
The scope rarely goes beyond that.
Similar to how you would upsize a meal at your local golden arches, there’s a way to enhance the endowment plan’s coverage to ensure you and your loved ones are sufficiently protected against the unforeseen bumps in the road. This is achieved through a heaping helping of riders. The downside? They may come at the expense of higher premiums due to the added protection.
Why add-on riders are important
Different endowment plans offer different riders, which may ultimately make or break your decision on buying or foregoing the plan altogether. Insurance benefits, after all, is part of the reason why you’re in the endowment market.
Take for example Aviva’s MySavingsPlan. At first glance, it is apparent that the plan’s coverage lacks a TPD benefit, a stark contrast to its peers like GE Flexi Cashback and PRUFlexicash. However, not all is lost — you can purchase that benefit in the form of a rider instead (or you may already have that coverage in your other insurance plans).
How a premium waiver added to your rider could work for you
One of the popular reasons why people buy endowment plans is for their kid’s tertiary education. In the eyes of a parent, insurance riders are instrumental. That’s because a premium waiver in an education-centric endowment plan would ensure continued coverage for your child should misfortune strike, hindering your ability to continue or afford paying premiums.
In short, your kid’s university tuition fees are secured come what may.
Useful riders to boost your endowment plan’s insurance coverage
#1 Cancer premium waiver
A common rider you might find is a cancer premium waiver. This waives your future premiums in the event of a major cancer diagnosis. This is a good one if your financial goal is to save up for retirement as you don’t have to worry about putting a pause on your savings (or worse, lapsing the plan due to inability to continue paying premiums), should you find yourself part of the national statistic. You’ll typically find this add-on rider in most endowment plans.
#2 Critical illness waiver
If you want to be on the extra-safe side, there’s always a critical illness waiver to pair with your cancer premium waiver. This will kick in upon a critical illness diagnosis, allowing you to keep your endowment plan without having to pay premiums. As every insurer covers a different number of critical illness, do check with your insurer of which CI is being covered.
An example is AXA’s PremiumEraser which waives premiums up to the Premium Expiry Date of the Basic Policy, if you’re found to have one of the covered medical conditions.
#3 Early-stage crisis waiver
A good option to have, this rider waives your premiums for a number of years in the event of a medical condition diagnosis that’s still in its early stages. This is pretty niche compared to the more common cancer and critical illness waivers. Not many endowment plans offer this in their add-on rider options.
One standout is PRUFlexicash, which provides an Early Stage Crisis Waiver that covers both early and intermediate stage medical conditions. It enables you to stop paying premiums for five years for the former and 10 years for the latter.
#4 Payor premium waiver
If you’re taking up an endowment plan, this waiver might be on the top of your list. Should death, TPD or critical illness befall you, the premiums shall cease, allowing your family to not have to worry about the outstanding premiums.
Among other endowment products you may find on the market, this is one of the add-on riders offered by Prudential’s PRUFlexicash. Known as Payer Security Plus, its benefit will cover your (the policy holder) spouse and child in the event of your death, TPD or critical illness. This rider’s coverage will last up to the end of the policy term or when you turn 85, whichever is earlier.
#5 Child-related illness rider
For extra assurance — particularly with a long-term endowment plan that stretches decades — you may want to consider a rider for your kid that covers child-related illnesses.
Tokio Marine’s KidAssure GIO Rider provides coverage for 24 conditions under child illness and child hospitalisation benefits. The coverage is valid for children up to 19 years old plus it includes death benefit.
The best part? 80% of premiums paid will be refunded once the child reaches 19 years old — without the need for medical underwriting.
Protected up to specified limits by SDIC.
Note: This is only product information provided. You may wish to seek advice from a qualified adviser before buying the product. If you choose not to seek advice from a qualified adviser, you should consider whether the product is suitable for you. Buying an insurance product that are not suitable for you may impact your ability to finance your future healthcare needs.
If you decide that the policy is not suitable after purchasing the policy, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by the insurer in underwriting the policy.
Read these next:
7 Things To Consider When Buying Endowment Plans For Your Kids
Best Short & Long Term Endowment Plans in Singapore (2021)
Endowment Comparison: Aviva MySavingsPlan vs GE Flexi Cashback vs PRUFlexicash
5 Types Of People Who Should Get An Endowment Plan
4 Most Popular Reasons Why People Get Endowment Plans
By Marissa Saini
Your friendly neighbourhood cat enthusiast who enjoys not being broke. Spend less, save more is the name of the game. Firm believer that being financially savvy is not about the destination, but the friends you make along the way.