Floods in Jakarta

I was in Jakarta during the past three days.

The flood was bad. It caused traffic congestion as the vehicles had to move slowly through the flooded roads. Some broke down, causing further bottlenecks.

Many homes did not have electricity.

About one third of the employees could not get to work, due to lack of electricity or public transport.

It took me 2 1/2 hours to travel from the city center to the airport. In normal days, it should have taken less than 1 hour. I nearly missed my flight.

How does NTUC Income earn 4% better than similar funds?

Dear Mr Tan,

I read your posting on your Global Equity fund. During the 3 years, the annual return is 4% higher than the average for the other funds. The difference in the expense rate is only 0.3%. Where does the other 3.7% come from? Are your fund managers better than the others?

JK

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Dear JK

Frankly, I do not know the answer. I think that the quality of the fund managers should be similar. Most funds will probably engage quite good investment managers.

I suspect that some of the other funds have high charges that are not disclosed in the expense rate. Maybe there are leakages that affect the return on the fund.

For example, if some investors are allowed to make additional investors at a favourable price, it will be at the expense of the other investors and will reduce the overall return on the fund.

Leaving NTUC Income

Hi Mr Tan,

I got to know from the Jan 2007 eFocus that you're leaving NTUC Income.

Your name is almost synonymous with NTUC Income.

I have full confidence in your company, under your leadership all these years, and I trust that you have your policy holders' interest at heart. NTUC Income, with it's "no-frill" image, has provided very comprehensive insurance coverage for all aspects of my insurance needs at very competitive and affordable premiums.

You came across as a very sincere person, me and my family think you'll make a very good MP....really.

It's a regret that you're leaving NTUC Income, nonetheless I wish you the very best in the next leap of your career!

SK

SAFE home for senior citizens in South West District

This program is for needy senior citizens in South West District. It installs basic safety and water saving devices to improve the living condition.

To be eligible, the senior citizen must be:

* living in South West District
* 55 years and older
* living in 1 or 2 room HDB flats

The following will be installed, free of charge to the senior citizen:

* lever tap
* shower head and 2 way lever tap
* grab bars
* light duty fire extinguisher
* wireless door bell (with light indicator)
* first aid kit
* thimble
* cistern water saving bag

Call: 6316 1616

Pay level premium for a decreasing cover?

Dear Mr Tan

I will be receiving my HDB flat soon.

I am looking at some of the mortgage protection insurance by various insurance companies. I noticed that the premium is not reducing although the sum assured decreases over the years. What is your opinion?

What advise you will give when buying mortgage protection insurance?

ET

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Dear ET

For the mortgage policy, it is usual to pay a level premium for a decreasing cover. Basically, the insurance company calculate the total cost of insurance for the term (based on the decreasing cover) and work out a level premium that matches the total cost. This type of arrangement is welcomed by the customer.

The premium for a decreasing cover is about 50% of the premium for a similar policy that provides a level cover throughout the term.

How should I invest my additional savings?

Dear Mr Tan

Currently, I have only SA of 25K protection insurance and SA of 50K on living insurance from NTUC. I am interested to increase my protection.

I wish to buy a whole life policy with short premium term, is it advisable? Is it advisable to buy investment products as the priority as it gives the best return although the protection is only 125%?

ET

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Dear ET

I suggest that you should put your additional savings in an Ideal plan to be invested in our Combined Fund. You can read more about this plan from this FAQ:

http://incnet.income.com.sg/uiGuide/guideDetailsPublic.aspx?gde=3304

If you need additional protection, you can buy a low cost term insurance. See this FAQ:

http://incnet.income.com.sg/uiGuide/guideDetailsPublic.aspx?gde=3020

Shall I terminate by bank investment product?

Dear Mr Tan

I have invested $5000 on an investment product from a bank which give me 10% upfront. The investment will mature upon reaching 15% or upon a period of 10 years. It is based on the 3 least performance funds to determine the % of gain.

After 3 years, I notice that the gain is always 0%. Should I cancel this investment? Is it not advisable to buy investment products from banks as their charges are higher?

ET

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Dear ET

You should ask the bank what you will get, if you terminate the plan now. I suspect that you might have to suffer a loss. In that case, it may not make sense for you to withdraw from the plan.

Sudoku (Logic9) helps to train the mind

Sudoku is a popular game around the world. Many people are hooked on it. It appears daily in Today paper and MyPaper (as Logic9).

The game requires you to fill in the blanks with the numbers 1 to 9, so that it does not repeat in any row, column or box (3X3).

It trains your mind on numbers, logic and pattern recognition. It is useful for children to strengthen their mathemathics. It keeps your mind active, and is useful for older people to keep mentally alert.

I created Logic9 as my version of Sudoku. It follows the same principles, but it has certain special features. All the puzzles (at level 1 to 4) have a unique answer. Many people find it to be more enjoyable to play my kind of puzzle.

You can try this puzzle at Logic9.

You can buy a pocketbook of 128 puzzles at Fairprice, Income branches and many bookstores. It also contains 3 tips on how to solve the difficult puzzles.

Ask for Logic9. Price is $5 only.

Yield on Endowment Plan

Dear Mr Tan,

I have a plan which I have paid a total of S$114,517 over 13 years using my CPF. I received a letter stating the projected value of maturity on 10 March, 2007 is S$136,271 and yield is 3.85%.

Looking at the amount of premium paid and the maturity value, I am sure the yield cannot be 3.85% as stated.

If I am right, can I bring the case up to either MAS, CPF or LIA. I am seeking your opinion because I trust only you in this insurance industry.

LC

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Dear LC

My calcuation shows the yield to be 2.45%, if you pay the premium yearly, and 2.63% if you pay the premium monthly.

Perhaps you should clarify with the insurance company. They might have made a genuine mistake in their calculation.

If it is a deliberate attempt to mislead you, then you have a case to make a complaint.

Which course should I take in university?

I was asked for my views on the following courses in university:

* electrical engineering
* chemical engineering
* double degree in electical engineering and business

As I am not familiar with this matter, I asked my yournger colleages for their views. Here is a summary:

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Electrical engineering requires interest in computer programming and job prospects are found in semi-conductor or IT industry.

Chemical engineering requires interest in chemistry and biology as bulk of the work is pent on laboratory experiments and research. Job prospects are found in petroleum or pharmaceutical companies.

Comparatively, electrical engineering offers a wider variety of jobs than chemical engineering because of its involvement in the vast IT industry.

Double degree in engineering and business is very useful as employers look for talents who have the technical knowledge and know how to manage a business.

Workfare Bonus

Who is eligible for the Workfare Bonus?

To get the Workfare Bonus, you must

* Be a Singapore Citizen aged 40 and above
* Be living in a property with an Annual Value of $10,000 or less
* Be employed or self-employed and work for at least 6 continuous months in calendar years 2005 or 2006
* Earn an average monthly income of $1,500 or less

The workfare bonus will be paid on 1 May 2007. You do not need to make any declaration, if you have contributed to CPF or made an income tax return for 2006. In other cases, you have to make a declaration.

http://www.progress.gov.sg/
hotline: 1800-2222-888

Financial Planning Tips

I wish to introduce you to my personal website:
website

You can find my Financial Planning Tips on the following:

1. How much should I save for my retirement?
2. How much life insurance do I need?
3. How should I invest my savings?
4. Should I buy a life insurance or investment plan?
5. What age should I retire?
6. Where can I get financial advice?

Financial Planning Tips

Prompt payment of hospital claim

Dear Mr Tan

Few months ago my wife was admitted at TTSH for breast cancer, removal of tumour.

Upon admission TTSH business executive wanted the surgery and hospital bill to be paid partly by cash and the rest by medisafe, even though I told them that my wife is holding Incomeshield Enhance/with Rider Policy, that Income will pay the bill in full. The executive insisted that we pay first and claim from Income, we left with no choice and paid the bill.

I went to your Bras Basah office to get help from your officers if they could settle our claims in due course.

I explain to JT, claims executive(Health) of my urgency of claming the bills.

JT was such a wonderful person who willing to listen to her client's request and urgency and needs with pleasnt SMILE and kind words. I really admire her WILLING TO HELP ATTITUDE towards the needy people, it is a rare charcter she possess which many people don't. You have a right staff and right place, she is an asset to Income.

Within a week the cheques arrived. That was really a help to us. My wife and I really from the bottom of our heart want to say a big THANK YOU to her through your kind attention. Please convey our gratitude to JT.

Emloyee like her to be commended and rewarded and boost their morale attitude further in some kind ways.

Once again we thank INCOME and JT. GOD BLESS. Have a good day.

Hassle free Travel

I wish to recognise the wonderful efforts of the authorities in the following countries, for making it relatively hassle free for visitors to pass through passport control, customs and health:

Countries of the European Union
Dubai
Singapore

Some countries, especially those in Asia, ask for detailed forms to be completed for their immigration, customs and health. They also ask for the detailed forms to be completed on leaving their country. This is most troublesome to the traveller, especially as they have to have to carry baggage and worry about some many other matters connected to their flight.

In most cases, the forms are not really put to use. They are just collected "blindly".

I hope that the authorities in these countries will review their outdated procedures, and make life easier for the travellers.

Older workers can work with pride and dignity

I met a policyholder. She said that her family is considering to migrate from Singapore. She is worried about the future for the elderly. She is quite sorry to see older workers work in the food centers as cleaners for a low pay. She felt that, after working for a lifetime, the older workers should not have to continue to work to make a living.

I told her this story, to give a different perspective.

When I was in Hokkaido, Japan last week, I stayed at a Japanese ryokan, ie Japanese styled hotel.

A high proportion of the workers were elderly, in the 60s or olders. They carried the luggage and cleaned the hotel room. The porter who carried my two large suitcases to my room must be much older than me! They work with pride and dignity.

In Japan, the workers are paid well, even if they do manual work. This makes them proud of their work. They do not feel that the work is demeaning.

I hope that, in Singapore, we can find a way to give better pay to our lower level workers. This will allow them to work with pride. It will also change the perception of the general public towards people doing these types of work.