Saturday, April 14, 2007

Advertisements by Google

My friend, Larry Haverkamp, did not like the advertisements that appear at the bottom of the right panel of my blog. He says that they spoil the independent nature of my blog. These advertisements are inserted by Google.

In my view, the advertisements are generally suitable, and give my visitors a chance to see what is available on insurance products from overseas. I found that most of the advertised websites give useful, educational information.

If you find any advertisements that are misleading, send an email to me at

Two modes of transport

My friend and I ordered a MaxiCab to Harbour Front. It can comfortably accomodate 7 people. The journey cost $35 (ie $16 plus the meter fare).

On our return, I found a long queue at the taxi stand in Harbour Front.

My wife and I decided to take the MRT from Harbour Front to Yio Chu Kang. It cost $1.70 per person.

As she used a single trip ticket, she had to pay a deposit of $1 for the ticket, which was refunded at the GTM machine in Yio Chu Kang. It was her first experience to take the MRT after many years.

Waterfront City, Batam

15 years ago, the developer had an ambitious plan to develop a city. This did not materialise. They had to stop work after the initial phase.

When I visited Waterfront City, I found the following:

* a hotel
* some recreational facilities, i.e. fishing, cable ski, go-kart
* about 300 houses, of which 80% are vacant
* about 100 shops, largely unoccupied

The place is quite charming and relaxing. The people are friendly.

I hope that it is possible for this place to be developed as a getaway for Singaporeans. Better to be not too crowded.

Send your articles for posting in my blog

I welcome articles from visitors to my blog.

If you have views on the topics covered in my blog and you wish them to be known more widely, you can send them to me. I shall publish them in my blog, if they are suitable.

Liu I-Chun shared her views about a financial product sold by a local bank to her elderly relative. She felt that the product was not sold properly. She sent her article to me. I posted it in my blog.

Ask the great questions

Here is an article from Dr. Lee Kum Tatt on what to do when in doubt. His wife who is close to him should know better. Accompanying the article are her comments.


Tan Kin Lian

Activities in Harris Resort

Harris Resort is at Waterfront City. It is the new name for a hotel that was developed 15 years ago. Previously, it was known by another name.

The interesting activities in the resort include:

* go kart
* cable ski
* bicycling
* sing with live band

The staff are very friendly and helpful.

I visited the cable ski. I was surprised to see many people participating in the sports. Many of them came just for the day, to enjoy the ski.

I met a young girl from Singapore. She has been coming to the cable ski about two times each month for the past two years. She enjoyed this sport. It is her only sport.

Logic9 at Harris Resort

I spent a day with a few friends at Harris Resort in Waterfront City, Batam.

At breakfast, I organised a Logic9 (Sudoku) contest for my friends. The children beat the adults.

I showed my friends how to play the puzzle at the moderate and difficult levels, using the 3 box rule. They enjoyed it.

I showed the game to the staff at the resort. They enjoyed it. They wanted to organise the competition for their other guests.

Logic9 (Sudoku) and Business Skills

After each business meeting, I present the Logic9 (Sudoku) booklet to the participants. I teach them the three tips on how to solve the difficult puzzles.

I told them that the puzzles teaches 3 business skills:

* strategy - the right way to start
* analysis - learn from what is missing, and what is there
* entreprenerial - decide when you are uncertain and be ready to adapt

They were amazed.

I am giving talks at the Ang Mo Kio Library (19 May) and in Millenia Mall (17 to 19 July).

Direct access to a contact center officer

NTUC Income won the global, most innovative award for its contact center.

A key feature is the direct access to a contact center officer. The call is answered within 3 rings by a human voice. This is welcomed by customers.

Most contact centers operate differently:

* the call is answered by a machine
* you have to hear the different options and press a button to get ahead
* you often have to spend 1 or 2 minutes, before you can talk to a person
* if you are unlucky, you have to wait for that person to be available
* usually, they are not able to help you anyway

Which model do you prefer? NTUC Income or the conventional model?

Friday, April 13, 2007

Role of Idac Center for Motor Repairs

Mr Tan

There is still some confusion. What is the role of an Idac center, which is supposed to handle motor claims?


My reply:

The main role is to assess the damages to the vehicle and to take an accident report.

The motorist should go to an Idac center immediately after the accident. The surveyor at the center will take photographs and record down the damages. You can also submit a claim report on the spot.

The Idac centers are located at various parts of Singapore and have long operating hours. Their surveyors only focus on one job. This makes it convenient for the motorist. It is a "one stop" service.

The actual handling of the repairs is a separate step. If you are insured with NTUC Income, they will ask you to leave your car at the Idac center. They will arrange the repair and ask you to collect your vehicle in a few days time. Generally, the quality of the repair is satisfactory, based on the customer feedback.

The other insurers do not offer this one-stop service. You will have to their appointed workshop, or you have to find your own repairer.

Some insurance companies have moved out of the Idac scheme. They make their own arrangements for the repair. You will have to call them directly and ask them on what to do. You can also go to your workshop, and they can claim on your behalf.

In my view, it is better to have a scheme like Idac, as it is transparent and offers better service to the motorists.

Is the financial product really guaranteed?

Dear Mr Tan,

I visit your blog quite regularly. A recent negative experience encountered by a relative at a local bank prompted me to share some basics in evaluating an investment product.

I have appended my article below for your perusal to see if you would like to publish it on your blog or use it to educate the elderly at the Centre for Seniors.

Liu I-Chun


The unprofessional selling of investment products by many bank staff upsets me.
What's disturbing is not just their aggressiveness, but their unethical sales

I have written to the press (The Business Times, The Straits Times and Today) about it in December 2004, but have yet to see any marked improvement. As such, I always tell my parents NOT to invest their money without first telling me about the product in question.

Bank staff, in their eagerness to meet high sales targets and earn commissions, tend to make empty promises like telling customers that the return is "guaranteed" when it is NOT. They also fail to highlight the risks and relevant fees involved.

In Singapore, only two main types of financial instruments have guaranteed returns: bank fixed deposits (provided that the bank is reliable!) and AAA-rated Singapore government securities SGS (treasury bills and bonds), provided that the SGS are
held to maturity and coupon payments (if any) are reinvested at the same coupon rate.

As of April 12, banks pay about 2.6% p.a. for fixed deposits. The 90-day Singapore government treasury bill gives a yield of 2.3% p.a., and the longest 20-year bond yields about 3.2% p.a.

When a financial product offers a guaranteed return (for example a guaranteed return single premium endowment plan), the guarantee is made using bonds in which they invest with your money. If bonds only give 3.2% p.a. now, the financial institution should not be expected to guarantee an investor more than 3% p.a. return since it has to make a profit.

Any product that offers a return of above 3% p.a. will carry some risk, and is likely to include equities (stocks/shares), and/or Real Estate Investment Trusts REITs (a REIT is a hybrid between a stock and a bond as it pays dividends but its price can move up or down), and/or other financial instruments.

The return from equities and REITs can NEVER be guaranteed. So be careful when anyone tells you that a product promises to give a guaranteed return of more than 3% p.a. It doesn't seem possible under current market conditions.

Money market funds which invest in short-term financial instruments like treasury bills currently yield about 3.5 p.a. and is considered to be quite safe. The return is stable, but also not guaranteed. It is the next safest thing to invest in after fixed deposits and Singapore government securities.

Always read all about a fund from the prospectus and not just from the marketing brochure. Marketing brochures tend to highlight all the attractive features but only the prospectus will outline the fine print like "return is not guaranteed" and "payout can be made out of your capital".

Ms Liu I-Chun

High turnover of agents in China

My friend is a top level manager in a large insurance company in China. He told me that there is a high turnover rate of insurance agents in China. 75% of newly recruited agents leave within the first year.

My view?

It is extremely costly to recruit and train an insurance agent. The cost will have to be borne by the consumers. The people in China are paying a higher premium to cover this wastage.

This problem exists in other countries. It also exist to a smaller extent in Singapore.

The insurance industry has to find a better way to sell its products, and reduce the cost to consumers.

Check your financial transactions

Many years ago, I used to trust the financial institutions, such as banks and insurance companies. I believed that they will act honestly and ensure that all the transactions are properly handled.

Recently, I have decided to monitor my transactions closely. My reasons are:

* the number of transactions have increased significantly
* there is high turnover of employees
* the chance of mistakes are high
* there is the risk of fraud

I am learning to use the online access of these financial institutions, so that the transations can be monitored online.

I will stop doing business with instititions that do not provide convenient online access, or an efficient contact center.

Motor insurance premiums likely to escalate

The motor insurance premiums is likely to escalate during the next two years.


During the past 18 months, several insurers have slashed their premium rates to uneconomical levels. They reduced their rates below the market leader, but were not able to keep their expenses low or to control their claims. Several of these insurers are now "bleeding".

A few days ago, it was reported that the insurance commissioner (from MAS) has asked the insurers to be responsible in pricing their premium rates.

This is similar to the situation in 2002. At that time, the insurers collectively lost over $200 million in the previous 3 years and had to increase their premium rates by more than 20%.

Lesson: Stay with NTUC Income, as they are able to manage the claims. Move to them now, before the premium rates start to escalate.

Repair your car after an accident

There are three main methods adopted by insurance companies around the world to handle the repair of the car, after an accident:

1. motorist find a workshop who claim against the insurer
2. insurer arrange the repair and pay the bill
3. insurer offer a payment and the motorist arrange his own repair

The most common method adopted in Singapore in method 1. This method has led to inflated claims. The workshop is able to aggravate the damages, get a surveyor to prepare a report and submitted an inflated claim.

NTUC Income adopted method 2. The motorist leaves the car at an Idac center and collects it a few days later, when the repair is completed. The quality of service and repair is satisfactory, as it is monitored by the claim specialists.

This method is also used by many large, successful insurers in other countries. It is effectively in producing the best results for the consumer and the repairer.

Method 3 is widely adopted in some countries. NTUC Income has also offered method 3 as an option. Less than 10% choose this option. They prefer method 2, as they prefer the repair to be taken care by the claim specialist.

Motor insurance

Surveys of customers show their top preference to be:

* lower premium rates
* good service when making a claim
* convenience in renewal the insurance

How is this possible?

When I was in NTUC Income, we developed a good working model that served the needs of most consumers.

I shall talk about how the model can be improved, for the benefit of consumers and ensure long term profitability for the insurance company.

Visitors to my blog

An average of 530 people visit my blog every day. This has increased since I left NTUC Income. I need to find out what interest you. Perhaps you can give your comments.

Can you ask your friends to visit my blog? I like to see an increase in visitorship.

Car pool

I took the MRT to attend a meeting in Tiong Bahru Plaza. After the meeting, I took a lift from a friend who attended the same meeting and was living near my home.

Since many people drive to a meeting, it is quite easy to get a lift to a nearby MRT station. Sometimes, I can get a lift all the way home.

Consolidated my ILP investments

In past years, I made several ILP investments. A separate policy was issued to me on each occasion.

I found it difficult to track so many different policies.

Recently, I requested for my investments to be consolidated into three policies, as follows:

* Growth fund (for my SRS investments)
* Global Equity fund (for my cash investments)
* Technology fund (for my cash investments)

It is easier for me to keep track of 3 separate policies, each invested in 1 fund.

I will also save on the policy fee payable for each policy.

Thursday, April 12, 2007

Make it easy for the customer to reach you

My PDA device had some trouble with the internal battery. I wanted to call the helpline of the manufacturer.

I visited the website of the manufactuer to get information. I had a lot of difficulty:

* the website does not show the contact telephone in the home page
* I had to search through many webpages
* Some of the webpages were slow in loading, as they insist on showing some video (which I do not need)

I found a webpage which was supposed to help me to find a reseller. I had to answer many questions into a form for the search. When I click on "submit", there was no response for a few minutes. The database server hung.

It seems that they do not want to talk to a customer. Instead, they impose a form to chase the customer away.

I hope that all corporate websites can be made friendly, easy to access, and helpful to their customers. The most important information is a 24 X 7 contact number, e-mail address, and a physical address with operating hours. They should aim to welcome a customer contact.

Give your rating to the suggestions in the LTA portal

I read the suggestions posted in the LTA feedback portal. For the suggestions that I agree, I posted my rating as "agree". So far, I seem to be among the very few, who are willing to give a rating.

I wish to encourage other people to give your views on the suggestions that you agree with. Let us be prepared to lend our voice and give our support to the useful suggestions.

LTA portal

The purpose of a business

Here are some interesting points from Peter Drucker's book, "The Essential Drucker".

A typical businessman says, "The purpose of a business is to make a profit".

Peter Drucker says that this answer is not wrong, but it is irrelevant. He said that the purpose of a business is to "create a customer". It is the customer who determines what the business is, and is willing to pay a price based on its utility, i.e. what the product or service does for him.

Profit is the final outcome of servicing the customer's needs, collecting the revenue and paying the expenses. It require the business to be runned efficiently.

Making a profit is a condition of business survival. If the business is not profitable, it will cease to exist. It is not the purpose of the business.

In his book, Peter Drucker identified eight important business objectives, covering:

* marketing
* innovation
* human resource
* financial resource
* physical resource
* productivity
* social responsibility
* profit requirement

I share the views stated by Peter Drucker. It is important to have a clear understanding of the purpose of a business, in servicing the customer. They will guide the setting of the other objectives and the implementation of the business strategy.

Maintain flexibility in a financial contract

When you invest in a financial contract, make sure that you have the flexibility to terminate the contract, without penalty.

Do not be locked into a long term contract that imposes a heavy penalty. Examples of contracts to avoid are:

* traditional life insurance, eg whole life or endowment policy
* structured products

These contracts incur a high, upfront cost. If you terminate the contract, you will suffer a penalty.

If you wish to buy a traditional life insurance policy, you should a cooperative (such as NTUC Income) as most of the future profits are returned to the policyholders.

In a commercial insurance company, the profit are given to shareholders. If you are locked into a long term contract, you may get a poor deal.

The flexible savings products are:

* unit trust or mutual funds with a low upfront charge, and no penalty

If you do not like the performance of the fund or the charges, you can withdraw your investments and put the money into another fund. This flexibility ensures that you will get a good deal all the time.

If you need life insurance protection, choose a term insurance plan (where the premium is very low). You can reduce the premium further, if you choose a decreasing term insurance plan.

Growth plan gives a moderate return with low risk

Mr Tan kin lian.

I am a housewife. I like to seek for your advice.

I have $10,000. I wanted to put in fixed desposit at NTUC INCOME for 10 years at about 4% per year. The insurance adviser recommanded the Growth plan under combined Fund.

Can I invest on that?


My reply:

I suggest that you invest in the growth plan (ie single premium endowment), rather than the Growth Fund (Combined Fund). It gives a moderate return and has low risk.

You can read the FAQ on this product at or ask the adviser to tell you the difference between the Growth plan and the Growth Fund (i.e. Combined Fund).

Wednesday, April 11, 2007

Land Transport Authority Feedback Portal

During the past 10 days, there were 4 postings in the portal.

This morning, I posted 3 suggestions. I also encouraged visitors to my blog to visit the LTA portal.

I found that there were 18 postings today, after my posting. I suspect that many of these postings were from visitors to my blog. Some probably went to the LTA portal directly, after reading the newspaper (like I did).

LTA portal

Dr Money: A Dozen Quick and Easy Tax Tips

Dr Money has given 12 tips on how you can save on your income tax. You can visit his



A brief introduction:

Time flies. It is tax time again. This year’s taxes are due on April 18 for e-filing and April 15 if you mail in a return.

The maximum fine for not filing or filing late is $1,000, but you can receive an extension if you have a good reason.

The Inland Revenue Authority of Singapore (IRAS) hopes 80 per cent of the 1.34 million taxpayers will e-file this year. That is up from 73 per cent last year.

The new e-filing system is fast, easy and almost fun. Gone are past years’ glitches when the screen would suddenly hang just as you completed your return.

Talk to LTA: pubic transport service

I visited the website of the Land Transport Authority and posted three suggestions on how to improve the public transport service. Talk to LTA

I hope that you will go into this website and give your views. You can also vote on my suggestions.

Medical fee guidelines

Is it wise to have guidelines for medical fees, to be set by the medical association?

I think so.

If medical fees are open to free competition, the consumers may be worse off. It is quite difficult for the consumer to judge what is right and fair, in the fees that are charged by doctors for various types of treatment and medication.

If the guidelines are set by the medical association, the public can refer to the association to act as the standard bearer.

I wish to quote the situation with the financial services industry. The institutions are free to design their products and to charge their prices. This has resulted in financial products that are profitable to the issuers but do not give a fair deal to the consumers.

Hot property market

The property market is hot, especially for the high end properties.

Even a listed large book distributor have decided to invest their cash and borrow money the bank to invest in properties, in the hope of cashing in on the hot market.

Is this wise?

During 1996, when property prices went up to high levels, many people jumped to invest in the market. Subsequently, the prices dropped. A recent survey showed that most of the prices today for these properties are still far below the prices during 1996.

Lesson: The sharp increase in prices apply only to new properties. If you are not able to sell the property to another buyer, while the market is very hot, you will be stuck with a high price property that may not recover your cost, after 10 years.

Right for owner to moderate comments in his blog

Last week, there was an article in the newspaper discussing the right of the owner to moderate comments posted in his blog.

Arguments were presented on both sides. Some people felt that the owner has the responsibility to moderate comments that are offensive and defamatory. Others defend the right to "free speech".

My views are:

* As the blog owner, I have the responsibility to ensure that comments are polite
* I welcome opinions, even if they disagree with me, provided that they are polite
* I will remove comments that are impolite to me or to other commentators
* I respect differing opinion, if they are given responsibly and are not anonymous

Tuesday, April 10, 2007

Be Confident & Optimistic

When Singapore became an independent nation, many people thought we could not make it. But we did. This is due to the spirit of many Singaporeans who contributed to make Singapore what it is. We refused to accept what others thought was inevitable without trying.

Here is a story from Dr. Lee Kum Tatt and her granddaughter. Blog

Tan Kin Lian

Should I terminate my existing whole life policy?


Currently I have a policy "Young Family" with NTUC. I have been paying a monthly premium of $154.50 since 1984.

As this is a life policy, it means that I will be paying premiums for nearly the rest of my life. I am already 59 and retired, and I am thinking of cashing out (about $51000 now) at this point.

As I have 2 children (aged 20, 26) who are almost done studying , I am also looking around for a good term policy available to seniors which will be for 5 or 10 years.

Although one of your officers at NTUC suggested buying an annuity, I do not think this is a good proposal as I am keen on buying a low cost term insurance which can cover for 5 to 10 years.

Does NTUC or other insurance companies plan to offer low-cost short-term policies for seniors?


My reply:

I suggest that you should continue the young family policy for another 5 years and terminate it at that time.

You can ask NTUC Income to tell you about the following:

* cash value now
* cash value in 5 years time (projected)
* total premiums payable for the next 5 years
* term insurance for 5 years

You can make a better decision, after getting the figures.

You can visit the business center at Bras Basah Road and talk to a consultant.

Buying a decreasing term assurance

Dear Mr Tan,

I read about your suggestion on buying a 20 years decreasing term assurance. I had a few questions on this policy.

1) If there's protection, what are the protection given?Death and TPD only?

The decreasing term insurance covers death and permant total disability.

2) Can I add a Critical illness rider to this assurance?

Currently, this is not available. But the expenses of treating critical illness is covered through a medical insurance plan (eg Incomeshield).

3) If I buy a decreasing term assurance and do not make any claim during the term, do I have to buy another assurance?

At the end of the term, you probably do not need any life insurance as you have adequate savings (hopefully) and your children are grown up.

4) If I want protection (including whole life, TPD and CI) and good return savings at the same time, is it possible?

I suggest that you buy protection through a decreasing term assurance and to save and invest in a large, well diversified, low cost equity fund. You can read more about this concept in my FAQ at

5) Is it wise to keep my current policy?

Generally, it is wise to keep your current policy, as you have already incurred the upfront load.

Parents wants more term insurance and savings

Hi, Mr Tan,

I wish to find out more about Term insurance. Currently, my husband has the following insurance coverage:

Husband age : 43 years
Annual income: 100k

Existing policies: investment linked, endowment, term, whole life, medishield, eldershield

We are family with 3 kids, with all Term living coverage - 200K each, we have no debt or any loan been paying, now trying to save for the children's university fees.


Reply from insurance adviser:

I checked on a Term Policy for your husband. The premium for $150,000 for your husband is $291.90 yearly (your current term plan charges $800 yearly).

Saving for our children is an excellent thought. Our Ideal Plan is
flexible and gives good returns. How old are your children?

If you are open for discussion, a proper financial planning for your needs is required.

More trains for a comfortable ride

I took the commuter train to the city this morning at 10 am. I took the train back home at 9 pm.

On both occasions, the train was quite crowded. I was not able to get a seat for the entire journey.

These are off-peak hours.

I hope that the SMRT will put more trains, so that the commuters can have a more pleasant ride during the off-peak hours. I can understand that, during the peak hours, when there are too many commuters, it may not be easy to add more trains to meet the demand.

It may mean somewhat lower profit for the SMRT to add more trains during the off-peak hours. But, I am sure that it will still be quite profitable for SMRT. And it will mean more comfort for commuters.

If more commuters find the train to be comfortable, then some of them will decide not to use private cars, which congest the roads. It will lead to a more efficient public transport system.

I hope that the public transport council will consider this request.

Monday, April 09, 2007

Reduce holdings of Singapore shares

I find the Singapore stockmarket to be too high. I reduced 12% of my holdings today (i.e. individual shares). I intend to continue to reduce my holdings within the next few days by a total of about 50%.

For the time being, I will keep my investments in the combined fund (which is largely invested in global equities and bonds).

Accident and term life insurance

Accident insurance covers death and permanent disability (partial or total) caused by accident. An accident is defined as being caused by a violent, external, visible force and excludes illness, self-inflicted injury, natural disasters, war and certain other risks.

Term life insurance covers death and permanent total disability arising from accidents and illness. Nearly all causes of death are covered, except for suicide during the first year of the insurance.

The premium for accident insurance usually vary according to occupation (in a few broad categories), and does not vary according to age.

The premium for term life insurance varies according to age. It can be two times of accident insurance at the younger ages, and much higher at the older ages.

It is better to buy term life insurance to protect the family from death arising from all causes. Alternatively, you can buy say $50,000 in term life insurance and say, an additional $150,000 in accident insurance.

Delay in payment of death claims

Dear Mr. Tan,

My sister in-law died on 16/12/2006 in New York at age 43.

The only documents at hand are :

1) the death certificate
2) cremation certificate
3) Acknowledgement from the S'pore Consulate for receipt of the deceased's passport and nric.

The family submitted claims to three life insurance companies (not NTUC) in January 2007.

The insurance companies had not approved the claims yet. They are still investigating the cause of death and require more information. All policies were in force and at least more than 2 years from the date of inception.

How can I get the insurance companies to settle the claims earlier?


My reply:

If the insurance company is unreasonable in delaying the payment of the claim, you can lodge a complaint with the following organisation:


If there is delay of more than two months in the payment of the claim, the insurance company is required to pay interest for the period of delay.

Interest on late payment of claims

There is a guideline by the Life Insurance Association which requires a life insurer to pay interest on late payment of maturity and death claims.

The interest is payable if the claim is settled more than two months from the date of receipt of written notification of the death. For an endowment policy, interest is payable if payment is made more than two months from date of maturity.

The interest is calculated based on the 12-month Fixed Deposit rate and savings rates of major local banks, weighted in the ratio of 80:20. It is calculated from the date to the date of payment.

Inspiration – Human Nuclear Energy

Dr. & Mrs. Lee Kum Tatt, not only shared their lives together. They also helped each other in their professions and careers to do things of interests to them both. This is why they can cope with so much more than otherwise.

How they did this is something we can learn from them. Mrs. Lee gives her account of some of the things she did.


Tan Kin Lian

Should I withdraw my profit?

Dear Mr Tan,

Last year, I was forced to withdraw 8k from flexilink (the profit). And despite that, there was some more profit by Feb 2007.

Do you normally withdraw the profit (leaving the what we put in initially, i.e. the capital) or do we leave the profit alone, as I understand the capital will double in ten years time?


My reply:

It is better to leave the gains to accumulate in the fund. If you need to spend some money, you can make a withdrawal, and it does not need to be tied to the amount of profit.

I allow my investments in the fund accumulate and will draw money from my bank account (which earns 1% interest), if I need to spend.

If the fund earns 6% per annum, it will double in value in 12 years (if you leave it to accumulate).

Wish you all the best in your investments.

High coverage at low cost

I met two new friends over a cup of coffee. They asked for my advice on how to obtain high coverage at a low cost.

I said:

* if a person in the late 20s buy a whole life policy for $200,000, he has to pay a monthly premium of $300

* if he buys a 20 year deceasing term assurance, the premium is only $20 a month.

They were surprised that the secnond plan is so affordable.

I explained that they can invest the difference of $280 into a unit trust or mutual fund, and get a good return over the next 20 years, and have a flexible savings plan.

"Why did not insurance agent not offer this option?"

The reason: the insurance agent earns much more by selling a whole life policy, instead of a decreasing term policy.

Savings for retirement

Someone told me that a hawker was sold a 20 year endowment policy with an annual premium of $7,000 as a form of saving for retirement.

Here is my analysis of the product:

* assume that the return on the endowment policy is 3.5% p.a., the maturity benefit is $204,000.

* if the hawker buy a decreasing term assurance and invest the difference in a unit trust to earn a net interest of 6% p.a., the expected maturity benefit (not guaranteed) would be $245,000 (after allowing for the normal charges of the fund). This is 20% higher than the endowment policy.

An endowment policy is rigid and requires the savings to be made for 20 years. If the plan is terminated in the early years, the policyholder may suffer a loss, due to the high marketing charges.

The unit trust is more flexible.

If the policyholder is able to claim tax relief on the insurance premium, then the tax savings will reduce the difference. But, if the policyholder does not pay any tax, then this advantage does not accrue.

Foreign funds are responding to investors' demand

Someone told me that the foreign funds are "not manipulating" the stockmarket. They are just responding to investors' demands to invest in Asian markets. Singapore is an attractive place for their investments.

This is correct.

However, the Singapore market is quite small. When the foreign funds flow into the market, they will push up the prices to a high level. When they have made enough profit, they will sell the shares and move to other Asian markets.

This has happened many times in the past. We must be prepared that it may happen again.

Local taxis

In some countries, there is a separate licence for a local taxi. It can only operate within a certain zone. This is to avoid competition with the long distance taxis. The taxi driver probably pays a separate licence fee.

I suggest that we should have this concept to provide a feeder service to MRT stations or bus terminus. We can allow private cars to be used to provide this service. The cost should be kept low, say $1 per passenger or $2 per trip.

If there is an efficient feeder service, more people will use mass transit. There will be less cars on the road.

Sunday, April 08, 2007

Watch out for outflow of foreign funds

My friend told me that the recent increase in the stockmarket is due to "manipulation" by the foreign funds. They are able to control the market.

I recall that, on three occasions in past years, the market fell a lot when the foreign funds move out (which they did, after they have made enough profit). When the market falls, you will not be able to get any buyer, unless you are prepared to take a big cut in prices.

If you wish to take profits, the best time is when the stockmarket is still moving up. Do not wait for it to turn.

Organising my folders

I use a folder in Big Trumpet to store my important data, including:

* website address, user names, id
* credit card numbers, telephone, PINS
* bank account number, PIN

As they are stored in a server, it is easy for me to retrieve them from anywhere in the world.

The folders are encripted and are quite secure. I get an e-mail alert, each time that my folder is accessed. So far, all the access are by me.

If someone else made an unauthorised access, I can be notified by the e-mail alert.

My impression of Huangshan, China

Many people said that the scenery in Huangshan is magnificent. I agree.

My wife and I have spent three days in Huangshan. We enjoyed the changing scenaries and the long walks along the mountain paths.

The different parts of the mountains are named as the "north sea", "west sea", "front sea", etc. Why do they name them as "sea", when they are high up in the mountains?

The mountains are high and are above the clouds. When you look at the clouds from above, they look like the "sea".

We flew to Huangshan City from Shanghai. We took a taxi to get to the foot of the mountain. To get to the hotel at the top, we had to take another taxi and cable car ride, and walk for 1 kilometer.

On our return, we took the overnight train from Huangshan City to Shanghai. It was a great experience.

How to get adequate insurance

In the Sunday Times, there is an article by Lorna Tan. She reported that it is possible to get a large amount of term insurance at an affordable premium. It is even more afforable, under a decreasing term plan. She also quoted a financial adviser.

I agree with the views. They are similar to the views that are advocated in my blog and my website.


NTUC Income offers a very attractive rates under its i-Term product. Visit

Difficult to buy Term Insurance in China

A friend told me that she wanted to buy term insurance in China. It was not available. The insurance agents do not carry this product.

Two years ago, she was quoted a premium rate of 2,500 RMB to insure for 250,000 RMB, under a plan that offers a partial premium refund. She found it to be too expensive. This plan was no longer offered.

For her age of 25 years, she would be able to buy a 20 year term insurance of 250,000 RMB in most countries at a premium of about 500 RMB.

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