What Should I Do with My AIA Policies?

Fin­an­cial tur­moil has swept through U.S. for quite some time. But the ones that affected Singa­por­ean is the col­lapse of Leh­man Broth­ers and the fin­an­cial crisis of AIG.

Those who bought DBS High Notes 5 may loose part or all of their at least $25k invest­ment. AIA, a sub­si­di­ary of AIG, has its poli­cy­hold­ers anxious about their policies should the par­ent com­pany col­lapse.

So what are the choices for these two groups of people then?

DBS cus­tom­ers can do noth­ings except to wait for DBS to inform them of any resid­ual cash to be dis­trib­uted back to them.

For AIA poli­cy­hold­ers, they will need to stay cool and calm in this peri­od of time. For those who really afraid of los­ing their money fur­ther, they can con­sider auto­mat­ic premi­um loan that will help to pay for their future premi­um by loan­ing against their cash value. It comes with a 5–7% interest rate. But at least you are bet­ter off with con­tinu­ta­tion of cov­er­age and buy­ing time to mon­it­or the situ­ation. Any early ter­min­a­tion of any insur­ance policies, espe­cially those with cash value, is at your dis­ad­vant­age. You can also con­sider with­draw­ing the cash value by loan­ing the amount of the cash value instead of sur­ren­der­ing policies if you really want to pro­tect whatever cash value you have with AIA.

Let’s hope that the U.S. government’s plan to fix the root of the sub-prime prob­lem will show some res­ult soon­er. 

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