Tan Kin Lian's Blog: Insure against real needs

Thursday, September 06, 2007

Insure against real needs

Some customers bought more insurance than they really need. They were over-sold by insurance agents who are keen to make the commission.

Here are some tips:

1. Buy insurance for the risks that you need to cover. Do not buy insurance for risks that you can shoulder on your own.

2. Buy low cost insurance. Do not bundle it with savings. Invest your savings separately.

3. Do not over-insure. Do not take several medical insurance policies. You are paying too much premium for no value. You are allowed to claim up to the amount that you spent only.

4. Find an honest adviser who help you to pay less on your insurance, and find the lowest cost.

I shall be making a separate posting to talk about the risks that you really need to insure, and the risks that you do not need to insure (i.e you can take on your own).

6 comments:

Echo－　回声 said...: Hi Mr Tan

I'm 38 yrs old with an annual income of abt 60K. Currently, I have below policies.
TYPE:
1. Endowment - premium per month 2,350 for sum assured of 35,000
2. Whole life (CRB) P.M - 657.50 FOR SUM ASSURED OF 50,000
3. Whole Life with LAP - P.M - 1268 FOR SUM ASSURED OF 50,000
4. Whole life - cash financial. p.m - 882.50, sum assured 50,000
am I over buy,of course, I still have endowment using CPF - 40K; August 26, 2007 4:33 PM
Anonymous said...: To insurance agents everyone needs insurance. Not only that, the more you have the better. Another one is having some insurance is better than having nothing. So you see this is how insurance agents are trained. They are trained to sell insurance and as much as possible so that they can make more money, more commission.They are not trained to look into your needs.
Products that they will recommend are products that give the highest commission.Adequate coverage or meeting the needs is never the
objective.
This results in either client having too little of the right insurance or too much in the wrong area or wrong priority.
The problem is customers are to be blamed too.They don't do due diligence before engaging an adviser.They themselves have no idea who is qualified and what are the right qualifications.Therefore it is good to have a register to check who is qualified and what areas of advice and service an adviser can consult.
MAS has mooted this idea but so far no news of it.The register will also record the offences and complains against the adviser.
I hope MAS will expedite this to give a level playing field for all the players before more customers get cheated.
Visit Mr. Tan's blog and get the necessary guidance in planning your financial future.
Remember to ask, "Are you a certified financial planner". If it is yes, good chance you get the right one.; August 26, 2007 6:55 PM
Thomas Phua's Blog said...: Everyone has needs for insurance, but you must know what your needs are and then find one who can help you to plan.

I would think the MOST basic need is H&S, so Shield Plans are the most basic and important plan to consider first.

List out your needs first. Example:-
1.How much does the family depend on me?
2.What happen if I am not dead, but contracted dread disease, and if bad enough, how many years can I drag on, 5 years?
3.If Permanent total disability happens. How can one go on?
4.If accident happens, what next.....
etc.....

A proper financial needs analysis will then point out how much one will need for protection before one consider to go into savings plan or investment plan.

Take care of basic needs first.

Some of us are worth MORE dead than Alive.

But this is okie, if one has the means to insure more for the happiness of their loved ones.

- Thomas Phua; August 27, 2007 9:47 AM
Anonymous said...: To Echo,
How come your plans are so expensive? Are you sure it is per month and not per year?
My Living Policy only cost me 106 dollars a month and I am older than you.; September 06, 2007 4:02 AM
Unknown said...: Yes dear 'echo' yr policies seem to be on e pricy side. Did you do a proper comparison before puttin pen to paper? Whole life plans are ex & payment is for a very long time.You should have bought term..

Views frm a kidney transplant patient..; September 06, 2007 9:27 PM
Thomas Phua's Blog said...: Shield plans are important, especial for chronic illness.

Kidney dialysis is mostly covered on per month basis.

- Thomas Phua; September 10, 2007 9:45 PM