Tan Kin Lian's Blog: Disability income insurance

Monday, January 07, 2008

Disability income insurance

Dear Mr. Tan,
What are your views about disability income insurance?

REPLY:

As a general principle, disability income insurance is useful. If a person is disabled due to illness or accident and is not able to earn an income, the insurance will make a regular payment to replace the lost income.

In practice, the situation is different.

Here are my views, based on my limited knowledge of the market for disability income insurance in Singapore.

1. The market for disability income insurance taken by individuals is quite undeveloped in Singapore.

2. The premium rate tends to be quite high in relation to the actual cost of the risk. You will probably have to pay a high premium for a cover that is worth much less.

3. There is a long waiting period (usually three months), before the disability income starts to pay. The period of payment may also be limited.

4. If you buy disability insurance in a group, for example through an employer, or an association, you are likely to get more competitive premium rates.

5. For individuals, you can insure for temporary disablement caused by accidents through a personal accident policy. The premium rate is quite competitive.

8 comments:

Anonymous said...: In my opinion, this is where you can get a Revosave policy from NTUC Income. :)

In the event of death or Permanent Disability, your family/nominee will get a lump sum of money.

In the event of critical illness,you can stop contributing premiums and still receive the GUARANTEED yearly cashback of 5% of the sum assured. (This is quite substantial and definitely helps a lot...)

In the event of critical illness,your Revosave policy also will still accumulate in value over the years till maturity.

Thank you :)

Helmi Hakim
http://www.helmihakim.com; January 08, 2008 4:30 PM
Khiat Han Hwee Adrian said...: Disability Income Plan is an important component of Insurance Planning.

The problem is the slow awareness and development of such plans keep premium at the higher end.

When the take-ups are low and few companies offers it, the premium will naturally be high.

Hope LIA will create awareness to Singaporeans on such plans in future.; January 09, 2008 12:16 AM
Anonymous said...: Helmi, what do you mean by substantial payout? What if i pay a premium of $100 monthly will it be substantial? Did you know that i pay $100 for disability income cover to 60 years old i get $1500 per month
if i am disabled. Will revosave pay me monthly of this amount/.
Helmi, you are misleading the readers. It is unethical to say rubbish ,to say that revosave can do all things. Is that how you sell?
I pity your customers.; January 09, 2008 12:40 PM
Helmi Hakim said...: A fact is a fact.

You dont have to contest it anymore.

I am very happy that the public are educated enough to understand how Revosave can help them achieve their financial objectives and at the same time help them when they are in need.

This is something truistic and needs no more discussion.

Revosave do help in all situations.

It is a lifestyle policy that I believe every Singaporeans should have. :); January 10, 2008 6:55 AM
Anonymous said...: A falsehood is a falsehood no matter how you promote it. Revosave only achieves your own objective and it strangles the customers. A better way to liquidity is save under your pillow or piggy bank. You can see, touch it and reach for it whenever you need it. No need to wait for 2 years or end of the year. Surely you understand the meaning of liquidity. The accountancy course teaches you that and you have distorted it for your own interest.; January 20, 2008 6:08 PM
Anonymous said...: The truthfulness of the matter needs no doubt.

Needs no clarification.

To anonymous who post on 6.08 PM, do continue to save in the bank. :P hahahhahh...

To the rest of the educated readers here,do read my blog to understand on better methadologies to save your money.

I believe this needs no explanation. Everyone knows of the opportunity costs involved by saving your money in the bank.

My advice: Just leave your emergency funds and money that you need to use everyday in the bank.

Rest of it, read my blog and experience for yourself how, I manage my very own money, every single day.

You can follow, or you can leave it as that! :)

Helmi Hakim
http://www.helmihakim.com; January 30, 2008 11:47 PM
Anonymous said...: Mr Helmi,

I feel sad for your clients. Your lack of financial knowledge are not helping them. There are many choices available to your clients which you are not competent to provide.

Only agents like you will compare bank deposits with your revosave. Anything on earth will beats bank deposits. Money market will fare better in the short term, ETF will fare better in the long term. Term insurance can easily get the cover needed.

You should broaden your knowledge, upgrade yourself and give advice like a real professional.; January 31, 2008 11:39 PM
Anonymous said...: To all financial associates, consultants, advisers....

Do continue to preach to your clients of the importance of insurance, the importance of savings and the importance of investment.

They will be very very thankful to you at the end of the day.

We are indeed doing a noble job :)

To all the readers of this blog, ensure authenticity and transparency of the advice that you have taken.

Credibility and being transparent is an important catalyst in determining acceptance of any advice.

Ensure you know where the source of advice came from.

Indeed, there are lots of alternatives than bank fixed deposits, and it takes advisors like us to analyse and evaluate your needs,investment horizon,risk profile before recommending any financial instruments to you.

You can trade in stocks, buying blue chips or penny stocks, by doing your very own analysis like determining the cashflow of the company, the profit margin, PE ratio, EPS, management's plans, etc2...

If you are competent in options trading, oil trading etc, you can also go ahead with that.

Yes again.

There are really a lot of ways and strategies that you can use to manage your money.

One way is to entrust this responsibility to financial associates and consultants like us.

We will analyze your needs, and recommend accordingly.

....and you will make the final decision, whether to accept or reject our proposal.

As for Anonymous, I am so sorry that you have to indulge in this unethical act of questioning my competency instead of engaging in a cogent discussion.

As for now, I will only reply comments to those who will identify themselves in this blog.

For the rest of the readers, do visit my blog to view the alternatives plans available for you. :)

Helmi Hakim
http://www.helmihakim.com; February 01, 2008 10:54 AM