by KCLau

During this week from Monday to Friday, I will post a series of Great Eastern insurance product reviews. It was schedules as below:

  • Monday: Greatlife Portfolio Insurance (Regular premium investment-linked plan)
  • Tuesday: Supreme Living Care Plus (Whole life living assurance policy with cash bonus)
  • Wednesday: Great Junior/Income Advantage Series 2 (Whole life income plan)
  • Thursday: Great Eduplanner (Education Endowment Plan)
  • Friday: Supreme Care (Whole life non-participating plan)

Before the launch of Supreme Livin’ Care Plus (SLC+) back in 2005, there are several older “version” of this living assurance plan, such as Supreme Livin’ Care and Supreme Livin’ Care Series 2. When Bank Negara Malaysia (BNM) required a new implementation of traditional plan that apply the asset share method of cash value calculation, the introduction of SLC+ is the answer from Great Eastern Life Assurance Bhd.

Plan Description

SLC+ is a Whole Life Living Assurance policy with Cash Bonus, maturing at the age of 87. After the policy
has been in force for one year, a series of non-participating Deferred Whole Life as a percentage of Basic Sum Assured. I will explain about the deferred protection below.

Living Assurance
provides a lump sum payment if you suffer one of the 36 critical illnesses/dread diseases. In layman term, SLC+ provides a lump sum to policyholder who either suffered from 36 critical illness, Total Permanent Disability (TPD), or Death whichever comes first. In insurance industry, these coverage are normally known as 3D.

What is 3D?
It is not three dimensions :). 3D refers to Death, Disability, Diseases which is the most common life protection provided by insurance companies.

This payment may allow you to take early retirement, pay off outstanding debts or even take a holiday – whatever you need to assist you with your recovery.

The lump sum amount payable is:

total sum assured = basic sum assured + deferred whole life sum assured

Total amount claimable * = Total Sum Assured + Accumulated Cash Bonus (if any) + terminal bonus (if any)

* Total Amount claimable is the amount of money you will get when you make a claim in the future.

Besides getting the protection, policyholders are also entitled to have

  • Terminal Bonus on 3D for policies in force more than 20 years
  • Cash Bonus – Starting from the end of the first year, Cash Bonus will be declared at the discretion of the Company annually on the Basic Sum Assured but this bonus is kept by the Company and the policyholder has to continue paying premiums.

What is whole life insurance?
A whole life insurance policy covers you for your entire life, not just for a specific period such as term insurance. Your death benefit and premium in most cases will remain the same. Whole life insurance also builds cash value, which is a return on a portion of your premiums that the insurance company invests.

Why is SLC+ so attractive?

Before the introduction of investment-linked policy in 21st century, Supreme Livin’Care series is one of the most popular traditional whole life plan. SLC+ is so attractive probably due to these factors:

  • Guaranteed protection increment – the deferred Sum Assured explained below provides guaranteed increase in sum assured. For example, when a policyholder bought SLC+ at age 25, he will get guaranteed 140% protection amount 10 years later at age 35. This features provides hedge against inflation. You still pay the same amount of premium, but get a higher protection at later stage of life.
  • Guaranteed premium – Due to the increasing probability of illnesses claim, most plan that provides 3D coverage in the local market doesn’t provide guaranteed premium. With the rapid enhancement of medical equipment and facilities, illnesses are diagnosed earlier, sometimes even before it becomes critical. Furthermore, due to the lack of exercise and defective diet, more and more people are contracted with cancer, kidney failure, heart attack, strokes and all sorts of dread diseases. So it is foreseen that the insurance premium will likely be raised in the future. Thus, the guaranteed premium feature will provide the peace of mind to policyholders.
  • Cash value illustrated in the sales quotation is very conservative and most likely will be met by insurance companies. Based on the previous history of bonuses declared, meeting the projected cash value will not be a big issue for Great Eastern.
  • Option to Buyback – in the event of life assured is diagnosed to be suffering from any one of the 36 illnesses covered (except Terminal Illness or Full-blown AIDS), the life assured shall be given the option to buyback the death benefit up to the maximum of the basic sum assured. It is commonly understood that when a person suffers from any of the 36 diseases, he will not be eligible for any new insurance protection. In other words, if you got cancer, you can’t buy any more insurance. However, the buyback options of SLC+ provides you a second chance to buy another policy that covers death only. When death occurs later, your beneficiaries can still claim the death benefit. In my understanding, SLC+ is the one and only plan in Malaysia that provides this advantage to policyholders.

You will be interested to own a SLC+ plan if….

  1. You are looking for a traditional plan that provides average protection with average cash values.
  2. You don’t like the fluctuation of fund performance that ties to investment-linked policies
  3. You are young and healthy
  4. You like the guaranteed features: guaranteed premium and guaranteed deferred sum assured
  5. You prefer conservative investment
  6. You want a 3D protection until very old age (87)

Deferred Protection

Now, let’s look at the deferred protection. In the policy of SLC+, this feature is called Deferred Whole Life (DWL).

Figure 1: Details of Deferred Whole Life

Refer figure 2 for the illustration of the sum assured with DWL. Picture worths a thousand words.

Figure 2: Illustration of Deferred Whole Life

Since you will still be paying the same amount of premium for the entire term (until age 87), you will feel that you are paying less and less premium, but getting more and more protection. Why is it so?
When you get more and more cash bonus every policy year, you will feel in a way that you actually pay less premium if you opt to withdraw the cash bonus. When the DWL kicks in at 2nd policy year, you will get more protection over time. That’s why I said that you will realize that you had actually “locked in the benefit of paying less premium for more protection in the future“.

Quotation Illustration

Since Cash Bonus and Terminal Bonus may vary depending on Company investment and operating performance, the illustrations show the possible level of benefits you may expect on two investment scenarios.
1. SCENARIO A = Assumes the participating fund earns 7.00% every year and the current operating experience of the Company continues
2. SCENARIO B = Assumes the participating fund earns 5.00% every year and the current operating experience of the Company continues

The bonus rates are greatly influenced by the capital appreciation of assets together with operating results and overall investment return experienced by the Company with respect to this type of plan. It will only be paid if the net returns earned by the Company support such bonuses. The actual bonuses payable may be higher or lower than illustrated.
For the purpose of this illustration, the bonuses shown in columns (K) and (L) are assumed. The bonuses included in the illustration have not been declared in the past. These bonuses are included based on the Company’s expectations of future operating results and the investment rate assumptions shown above.


Figure 3: A sample of SLC+ sales illustration generated with GELSIS 4.27

The quotation has 9 pages. If you are interested to read the quotation illustration in details, please contact me and provide relevant details such as date of birth, gender and budget.

Graphical Presentation


Figure 4: SLC+ graphical line chart illustration

Red line – Total benefit claimable
Green line – Cash value
Blue line – total premium paid

Do you notice that the green line intersect with the blue around 14th year? It means if you surrender the policy after 14 years, you will probably get back all the premium paid without interest. After that, you will get a return from your premium. The longer you pay the premium, the better is the return. Please refer my article that shows the Return of Investment of insurance policy.

Popular Supplementary Benefit – Reducing Term Rider Plus

Reducing term rider plus (RTRP) is a non-participating rider that give 3D coverage that reduces annually by level amount of initial sum assured for each completed policy year. There is a situation when this RTRP will come in handy. For example, you need a RM150,000 3D coverage. The premium is RM5145 p.a. for 30 years old male non-smoker. But you can only afford premium that is less than RM4000 a year.

To work with the tight budget, the SLC+ plan can be designed with basic sum assured of RM100,000, and additional RTRP of RM50,000. The premium is

  • Basic SLC+ RM100k – premium is RM3430 p.a.
  • RTRP RM50k – premium is RM186.50 p.a. only.
  • Total premium = RM3616.50

You will still get the RM150k coverage. But of course the cash value will be less when compared with a basic plan of of SLC+. The increment of sum assured will be significantly at lower rate too.

Conclusion

Since there is no such plan as the best insurance plan, every insurance products has its potential market. Unlike Greatlife Portfolio Insurance that I reviewed yesterday, SLC+ is a traditional plan that provides conservative return and many guaranteed features. Some risk averse people will find it attractive. But those who are more aggressive would think that SLC+ is not so appealing to them. Talk to your insurance agent to plan your protection that suits your needs and circumstances.

Tomorrow I will share a plan that caters for retirement needs. Stay tuned!
By the way, if you have any question about SLC+, please feel free to voice out in the comment.


KCLau
KCLau

Personal finance author and trainer

    21 replies to "Supreme Livin’ Care Plus: Whole Life Living Assurance policy with Cash Bonus"

    • Nirmala

      Hello,
      I do not know if you still answer but I have a SLC plus (10 years now) and cancer. What do you suggest the best I can do to benefit from this SLC plus?
      Thank you.

    • Xavier Chen

      How is the previous supreme living care different from the supreme living care plus? How long do i have to pay for the supreme living care? Finally, i understand that i can upgrade to purchase a supreme living care plus from my term care policy. But in that case, will my term care be removed?

    • Liaw Chun Seng

      Hi

      Is there a policy called “Supreme Living Assurance with Reversionary Bonus 1”? How long is the tenure for this policy?

      Regards
      Chun Seng

    • desmond tan

      hi,

      where can i get the full infor for flexiplan whole life with cash bonus?

      thanks

      • KCLau

        @ Desmond,
        If you have this policy, you can contact Great Eastern to request a full quotation print up.

    • s.n.lee

      Hi,
      i am planing to buy an insurance for my husband, but have no idea which suit him the best.
      he is 41 year old with 1 child,11 yrs old.
      he is currently holding a GREAT EASTERN FLEXIPLAN – WHOLE LIFE WITH SPECIAL BONUS. he bought it on 1995 , yearly premium rm3300.(still paying ?life 200k without medical card and critical illness.

      his company insurance covered his medical and life of SGD200k
      he plan to buy an extra insurance for family protection which is cover with critical illness. and life(no need the medical card because he is working oversea most of the time) -rm250k or the monthly premium of rm300-500.
      in between traditional insurance and investment link, which one you think suit him the best ? any good insurance plan in the market now?
      thank you in advance for your reply.
      have a great day.

    • TW

      Hi KC,

      I am a SLC policy holder. In genera in a whole life insurance plan, I understand we can withdraw the (cash value) that has accrued in our account. My question:

      1. Does SLC has this option? if it is possible, then
      2. It is considered a “loan’ from your own insurance policy?
      3. How do you repay your “loan’ into your own policy?
      4. Interest rates, is it fix? finally
      5. How does getting cash out of your policy effect your lfe coverage?

      If SLC does not have this option, does GE have such a product for whole life insrance that allows such flexibility?

      many Thanks for your inside.

      • Cheah

        Dear Mr. KC,

        I am SLC policy holder too. I would also love to know what is the correct answer or question posed by TW. My current understanding is as follows:

        1. We can withdraw bonus and cash value.
        2. Withdrawal of cash value is considered as policy loan.
        3. Loan have to be repaid, just like bank.
        4. Current interest rate @ 7.00%
        5. It would not affect life coverage.

        Keen for your answer.

        Thanks.

    • Michelle

      For this SLC plan, if I buy this plan and survived throughout the period, what will I get back upon maturity ?

      • KCLau

        You will get the maturity benefit at age 87. It is the sum assured plus all the bonuses accumulated.

    • Pearly

      Hi KC,
      I bought Supreme Living Care in yr 2002. Currently only I notice that the payor benefit was until yr 2015. I currently 35 years old. If I want to extend it to 55 years old, can you estimate how much will be the extra premium?

      • KCLau

        @ Pearly,

        It depends on the sum assured stated in the policy.
        It is better to contact your agent to work out the premium

    • Joanne Ng

      hi,
      I would like to double confirm with you regarding SLC SLC Plus. Does SLC contain Guaranteed protection increment? Or only SLC Plus have the benefit? How about Livin Care?

    • dennis

      Hi KC,
      I bought GE insurance in 2004. Supreme Livin‘ Care series 2.
      Do GE still selling Supreme Livin‘ Care series 2 ?
      If I want to top-up another sum assured RM25-30K only for 36CI & death, what would you suggest to buy ?

      • KCLau

        @ Dennis,

        Your option is to top up with another traditional 3D plan or investment-linked plan.

    • KCLau

      36 Critical illnesses are covered till age 87

    • crane

      hi,may i know that will there be age limit for critical illness protection under this SLC plan as i know tpd will cease when age 65

      Thankyou!

    • KCLau

      Hi Kelly,
      The TPD and Death benefit comes together for any life insurance policy. It means you will get RM1 million TPD if you buy RM1m death benefit. If you want higher TPD benefit, the death benefit will rise as well.

      I am a long time agent of GE. Of course I will handle your case if you want to buy from me.

      Thanks!

    • kellysue

      Hi KC,

      Can my coverage for TPD be higher than death? For instance, can i buy RM1M death benefit and RM2M coverage for TPD?

      by the way, are you an agent of GE? if i decide to buy, can i buy from you?

    • KCLau

      1. the option is stated in the policy black and white. Please note that this option is only available to standard life (means those who are super healthy only – hypertension, disabled or other condition will not get this extra benefit)

      2. normal premium rate, and non participating policy. Currently the only one available and meet the criteria is the Supreme Care whole life non-par plan.

      3. I think GE is the first one to offer. There might be other companies offering similar plan. But I haven't known any up to date.

    • kellysue

      Hi KC,
      i am looking to buy my first policy. Am interested on this product especially on the increasing sum assured. i got some questions regarding the buyback option below which i hope u can help me:-

      Option to Buyback – in the event of life assured is diagnosed to be suffering from any one of the 36 illnesses covered (except Terminal Illness or Full-blown AIDS), the life assured shall be given the option to buyback the death benefit up to the maximum of the basic sum assured. It is commonly understood that when a person suffers from any of the 36 diseases, he will not be eligible for any new insurance protection. In other words, if you got cancer, you can’t buy any more insurance. However, the buyback options of SLC+ provides you a second chance to buy another policy that covers death only. When death occurs later, your beneficiaries can still claim the death benefit. In my understanding, SLC+ is the one and only plan in Malaysia that provides this advantage to policyholders.

      1) is the option to buy back guaranteed? stated anywhere in black and white? i.e. in the policy?
      2) the option to buy back the death benefit will be at the normal premium price or higher?
      3) is GE the only insurer offering this option as of today?

      thanks,
      kelly =)

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