A week ago, we received a query from a prospective client that she would like to evaluate the PruLink Protection Plus Account (Update: this plan is withdrawn in 2016). It is an investment-linked plan from Prudential that was recommended by her colleague’s insurance agent when she was enquiring about critical illnesses coverage.
The agent explained to her the flexibility of the insurance premium and the comparable advantage over tradition whole life insurance and term insurance plan. She was interested and went to do her personal research online. However, she read from several online forums about the disadvantage of investment link plan and is concerned about the escalating insurance charges of the PruLink Protection Plus Account.
So we decided to do an analysis to illustrate the insurance charges and policy charges of PruLink Protection Plus Account. Do note that the analysis below excludes the additional
expensive cost of crisis waiver rider and early stage crisis waiver rider. If we were to add in the cost of riders, it would be even higher.
PruLink Protection Plus Insurance Charges
In the case of our prospective client, she is current age 27 and was recommended a coverage of $200,000 Death/TPD, $50,000 Crisis Cover Provider (Advance Stage CI coverage) and $50,000 of Early Crisis Cover Provider. The annual premium is $2,640 per annum. The total insurance charges from age 27 to age 80 is a whopping $241,819! Please refer the table below
You may notice that the insurance charges exceed her annual premium at her age 56. The insurance charges escalate exponentially after that. We show her several other scenarios till age 70, 75, 85 and 90 so that she has a better overall picture. She was very grateful for our analysis and commented that we should share this report to the general public.
And so we did! We uploaded a scale down version of the analysis that you can test drive (
download here) our analysis for your existing PruLink Protection Plus Account.
PruLink Protection Plus Insurance Charges Illustrator
Instruction: Change the values in blue boxes to suits your policy
(please allow 3 sec for the illustrator to load)
- Key in your age at the “Start age”
- Select the ending age
- Select Male/Female & Smoker/Non-Smoker
- Key in your annual insurance premium
- Select the coverage of your policy (for policy with early CI coverage, contact us here)
- The total policy and mortality charges will be shown. The annual breakdown of fees can be found below the chart
One additional thing to note that is that we noticed a potential error in the insurance charges of the PruLink Protection Plus Account. For a male non-smoker, the rate (death/TPD and terminal illnesses) decrease from $19.44 per $1,000 coverage to $19.33 instead of increase. After $19.33, it quickly went back up to $21.36 per $1,000 coverage. We feel that it should probably be $20.33 instead of $19.33. Kindly refer to the image below. Hope you have enjoyed our analysis.
To review your existing Prudential investment link plan
To know more about the policy and insurance charges of investment link plan
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Besides PruLink Protection Plus, you may want to read up a similar plan from Great Eastern here.