Saturday, December 25, 2010

Understand your biggest risk

Your biggest risk is NOT premature death. It is NOT critical illness. It is earning a poor yield due to the bad life insurance products sold to you by an insurance agent (who wants to earn a fat commission from selling the product). By earning a poor yield, you will not have sufficient savings for retirement, even though you have been frugal and have saved as much as you can during your working life.

Your priority is to get a good yield on your investment, at least 2% higher than inflation. You should avoid life insurance products that take away 40% or more of your accumulated savings. You can buy term insurance for 25 years to cover premature death and earn a good yield by investing in a ETF. It is explained in my book, Practical Guide on Financial Planning. You can also read this article.

Tan Kin Lian

Personal Financial Plan [3]

I encourage consumers to carry out a personal financial plan, using the calculator shown in this website, The key feature of this calculator is:
  • It is free (unlike the fee charged by a financial adviser)
  • It is easy to understand
  • It shows you the projected income, after adjusting for inflation
  • It highlights the difference in your income, based on a 2% difference in yield
  • It shows the importance of getting a yield that is 2% above inflation
  • It show the danger of buying a life insurance policy that gives you a poor yield, due to high deduction.
You can also view the tips on "financial planning" and "buying insurance". Working out a Personal Financial Plan is mandatory for every young person, as your future is at stake!

Tan Kin Lian

Singapore is the happiest place on Earth

Do you agree with this view expressed by an author of a newly published book? Read SGEP for an alternative view.

Art of being minimalist

I received this message from a reader. 

Dear Mr. Tan
In these days of blatant consumerism, especially in Spore, and during this holiday season, please find attached an e-book for your reading pleasure...

Term insurance to age 99

I wrote this letter to the Straits Times to comment about the comparison between whole life and term insurance to age 99. I said that this comparison is misleading to consumers. The Straits Times did not publish my letter.

The insurance agents used this type of comparison to mislead the public to buy whole life or investment linked insurance. It is disappointing that the Sunday Times used the same approach.

Tan Kin Lian

An unusual cautious view for 2011

Many people are predicting better times ahead. But this writer has sounded a note of caution. Read his views in SGEP.

WikiLeaks and Damage Control

While Singaporeans largely blame WikiLeaks,a minority is attributing the underlying cause of recent problems
to a “condescending attitude” towards friends and neighbours less successful than them. Read SGEP


SGEP contains a selection of articles about the social and political issues in Singapore and other countries that have an impact on Singapore. It includes views of astute bloggers that are not found in the daily newspapers. Visit SGEP daily.

Friday, December 24, 2010

Project work for Family Life game

I need an artist to draw cartoons and an expert to create animated graphics. See details here:

Here are the details of the Family Life game.

High income and integrity

A young graduate is torn between the attraction of becoming a financial adviser, with the promise by the agency manager of 3 to 4 times of the typical earnings, and the knowledge that she might be causing harm to her friends and relatives. The agency manager had advised her to approach the people she knows and get them to switch to the investment-linked policy that is actively sold by their insurance company. She realized that this policy has a high deduction from the consumers.

She asked for my views on this important choice. Should she take up the job to be a financial adviser?

The easiest way to earn a lot of money is to sell products that give a large margin to the seller (i.e. the financial adviser and the insurance company), but this must surely be at the expense of the buyer. There is no magic that can give a good income to the seller without harming the buyer.

Some new financial advisers do not know that they are doing harm to their friends and family members, because they have been misled by the agency manager. Some financial advisers know the truth, but they only take care of their own interest and do not bother about the people that they are harming.

It is easy to fool consumers to switch to a new investment-linked policy. I have seen many cases where the financial adviser tells half truths and blatant lies to an unsavvy customer, such as:
  • They can earn 9% projected return (This is not true, as the 9% is just an assumption which is too optimistic in the uncertain environment today)
  • The adviser does not tell the client that there is a big deduction that can reduce the yield of 9% to 4% or lower. If the yield of 9% is too optimistic, the net yield will be terribly low.
It is blatant dishonesty, but seem to be quite common. Many people are just taken for a ride. By acting dishonestly, the financial adviser can earn a high income, and the agency manager can also take a big cut. It also earns a big profit for the insurance company.

You have to decide for yourself which route you wish to take. It depends on your conscience. I believe that it is better to earn less, but in an honest way. You can also talk to your parents and get their advice.

Tan Kin Lian

Merry Christmas and Happy New Year

Video clips and animated graphics

I am looking for a knowledge person to make video clips of 10 to 15 secs of events. The clip can be a video or animated graphic with sound and should be less than 0.5 to 1 M. It can depict lifetime events such as wedding, birth of baby, getting a job, getting fired, etc. It should be in a format that can be played on a mobile phone. Interested, please write to

Note. These video clips are to be used for the mobile game called Family Life, as explained here:

Thursday, December 23, 2010

Sometimes, all that glitters ...

Gold investment firm placed on MAS' Investor Alert List
Former NTUC Income chief executive and consumer rights advocate Tan Kin Lian said such gold investment schemes could be operating on the basis that money from later investors is used to pay the earlier ones.

He also urged for greater regulation, saying: "The Government should make it illegal for any company to operate an investment scheme without getting a licence from MAS. They should not be allowed to collect deposits or investments and promise a high return, when they do not have the assets to back up their liabilities."

Offering packages at Temple

Hi Mr. Tan,
I would like to share with readers and hopefully, authority can pick up the message. I went to 财神庙 at sembawang for "return prayers" to 太岁. I noticed that the offering packages are at $10 per packet. I've 5 packets to buy. I remember other temples used to offer just like $2 per packet. Hence total amount paid today is about $50.00. I could have paid $10.00 in other temples. Just feel that a temple should review the sales price of the offering packages and offer wider selection, e.g. $5, $2 packages for devotees/visitors.
Sembawang resident

Mobile App - Family Life

This application is being developed to let the player experience the important decisions that affect the work and family life.

It will be good for the young people in Singapore. It may even be an interesting mobile app, like Second Life.

Property agent for Rajah Tower

My friend wishes to get a property agent to sell his apartment in Rajah Towers. If you know of any agent who specializes in this condo, please ask him to contact me at

Prepare Your Financial Plan [2]

You can prepare your financial plan in this website, There were 30 requests on 22 December. This tool has the following special features:

  • Adjust for the impact of inflation
  • Shows you the amount that you can get on retirement 
  • Shows the impact caused by a different in investment yield
  • Highlights the importance of getting a yield that is 2% more than inflation
  • Allows you to do further calculation of your regular savings, to achieve your retirement goal.
You can also see the Tips on Financial Planning and Buying Insurance in this website.

I will get investors to set up a new life insurance company to market the Flexi-Life product that is shown in this website. You can view the 3 videos to see how this policy works from the perspective of the consumer. 

Tan Kin Lian

Wednesday, December 22, 2010

Prepare Your Financial Plan

You can use this calculator to project your savings to retirement and the drawdown of your savings to give a monthly income. This amount is adjusted for inflation. The amount of monthly income that you see will have the same value as today.

You have to provide your actual e-mail address for the plan to be sent to you. It will not be displayed on the browser.

Pro-Enterprise Panel

I gave my feedback to the Pro-Enterprise Panel about the charges for the fire safety requirements. There was no reply for one week. I mention in my blog that I wanted to send them another feedback and that I do not expect any reply from them.

I just received an acknowledgement from the secretariat to my first feedback that they are contacting the Fire Safety department. Perhaps my blog did the trick in getting the reply?

One-sided stories and half truths

A financial adviser wrote to me to complain that my postings on rejection of private Shield claims are negative and one sided, and that it did not contain details of the reasons for the rejection.

I am not able to post the details as the claimant usually does not wish to be identified. In some cases, the claims are still under appeal, and they do not wish to damage their chances. They do not wish their friends or family  to know of their difficulty.

On the contrary, I know of many instances where the insurance agents tell one side stories, exaggerations and half truths to get consumers to buy life insurance or private Shield insurance that are a waste of money. These are told verbally to the consumers, without any written record. The agents are more likely to be the people who are responsible for one-sided stories.

Here are the half truth stories.

Tan Kin Lian

Test your skill as an Entrepeneur

Take part in this competition every night AT 8, 9 and 10 pm

Cost of medical report - who pays?

This letter was printed in the Straits Times Forum.

Some consumers have to pay $90 or more to get a medical report that is usually required by another party, e.g. the insurance company, employer or for National Service deferment.
I suggest that the government should make it clear that the cost of these requirements should be borne by the party that needs the report, and not the consumer.
These big organisations that ask for the medical report are in a better position to negotiate down the fee for the medical report, or to change their requirements to reduce the cost of the report. They should not impose expensive requirements to be borne by the hapless consumers.

Tan Kin Lian 

Avoid exclusions on your private Shield

Dear Mr. Tan,
NTUC offered to upgrade my Medishield, but with exclusion in 2008. I rejected it as I believe this exclusion may lead to debatable claims in the future. However, I am now under the basic plan which is not restricted by the exclusion. What I am looking for is to allow me to upgrade my medi-shield plan without the exclusion and also, can extend the coverage with rider if possible. If NTUC Income is not prepare to do anything about it, I don’t see any options at all… Do advise me if there is any suggestions.

My view is that it is better for you to say with basic Medishield, rather than ask for an upgrade to a private shield. Even if Income is willing to accept you with less onerous restrictions, it may not be worth while for you to face future uncertainty. Read this FAQ.


Learning Tips - Nightlife in Singapore

Where are the interesting night life in Singapore? You can find out from Learning Tips. This app is now available on Windows Phone, which you can download from Microsoft Marketplace. You can also learn from the tips on other topics covering financial planning, insurance, health and tourism. Watch the video of Learning Tip on the web and on the Window Phone.

Tuesday, December 21, 2010

Financial Planning - do your plan

This video shows how to prepare the financial plan and to understand the results. It is most suitable for young people who has just started work, or has been working for a few years. You should use this tool to prepare your financial plan before you put your savings in a life insurance policy (that gives you a poor yield).

You can do your financial plan in this website,

Fight against True Spa, True Yoga...all True Group biz..

Hi Sir,
Here is an update on the True Spa Victims case for your update on your blog.
spa victim

World Tour

Mike Hansford shares this file of the best places around the world.

Easy to make a death claim under Term Insurance

Hi Mr Tan
I have been following your approach of doing DIY for my term coverage, SAF Term Insurance and shield plan, I find that I have much left over to invest in STI ETF. I am very pleased with this approach indeed.

One thing I would like to find out is the ease of claiming in case of death and illness. For example, if something were to happen to me, will it be very tough for my spouse to handle all the claims? Not forgetting that she will be in much emotional distress at this stage. Based on your experience, have you encountered any person, who is still in the right frame of mind, while in mourning of a loved ones, to go to the insurance company customer service centre to do claim?

Making a death claim should be quite easy for the dependents. Many people handle it daily. There is really no hurry - so it can be done after all the other arrangements have been completed. No need to worry about it.

An underground city

Mike Hansford sends this collecting of interesting photos of an underground city in Turkey. You can view it without actually visiting this site.

Images of the past

My friend, Mike Hansford, collects pictures of interesting places around the world. Here are some images from the past.


Read SGEP for views on the social and political issues in Singapore. Some of my blogs are covered there, but you can also find more interesting views from other bloggers. There are also social issues featured in the local and international media. You should bookmark SGEP and visit it daily. Keep abreast of the issues that will affect your voting decision at the next general election.

Monday, December 20, 2010

Rejected claim under private Shield

Someone asked me for help. She bought a private Shield plan a few years ago. She was recently hospitalised and spent more than $10,000 for an operation. The claim was rejected due to some "exclusion" which was not clear to her or to a lay person.

This is the danger of private Shield. The consumer thought that she would be covered for A class ward. She spent a lot more in premium to get the peace of mind, and ended up in a nightmare!

A few consumers had asked for my help in similar situations. This is why I advised consumers to avoid private Shield. Read this FAQ. Even if the insurance company rejects the claim under private Shield, they have the duty to make a claim under the Medishield portion, which should be covered.

Read the FAQ on "rejected" in You will find other people suffering from the same distress.

Tan Kin Lian

SP Services - Open an utilities account

SP Services require the consumer to submit the following documents to open an utilities account. It seemed that they feel it their duty to act as the legal office of the government to check for ownership or tenancy of the premises. Why is this necessary? Surely, no one in their right mind will open an account from somebody else?

Are they going overboard with their requirements? They seem to be quite happy to give hassle to their customers.

They also require me to find out the KVA of the electric supply. As I do not know the answer, I have to find out from the developer. The staff who answered my call also did not know the KVA. So, it was really a hassle.

Why do they ask for it? They want to ask for the appropriate deposit based on the KVA. It would have been easier if they collect an intial deposit and adjust it according to the consumption. There is a simplier way for consumers, but they prefer their way for their own convenience. They don't care about the hassle that they give to others. It seems to be quite common in Singapore!

Tan Kin Lian

Eldershield - good or bad?

I wish to analyse the Eldershield premium that is being charged now for people who reaches the entry age. Please send the following infomation to me:

a) starting age
b) amount of annual or single premium
c) duration of premium payment
d) benefit covered by Eldershield.

If you have received the offer for the Eldershield supplement from the insurer, you can send the same details for my analysis.

Learning Tips

I have added several additional topics in Learning Tips. Go to and tick on Learning Tips.
They include financial planning, insurance, health and interesting places in Singapore (for tourists and locals!)
Direct link: (please bookmark it).

Life insurance - its useful role

Life insurance can play a useful role for consumers to manage their personal finance, provided that it can be bought directly without incurring an exorbitant upfront charge (to pay commission). Here is chapter 7 from my new book, Get Value from your Life Insurance Policy.

You can learn more about the Flexi-Life policy (an investment linked policy where 100% of your savings is invested from the first month) here. This policy is not available yet, but will hopefully be available one day!

Life insurance after retirement

Should a consumer keep a life insurance policy after retirement, if he or she has no further need for life insurance protection, e.g. the children have grown up?

Singaporeans travel in December

My friend observed that the traffic on the road is quite light in December. Many Singaporeans must be travelling on holiday. This is also confirmed by the visitors to my blog, which dropped 30% in December. I observed last year that after the holidays, it jumped back to normal.

Buoyant property prices

Benjamin Ching wrote in the Straits Times Forum that the buoyant property prices is a sign of rising wealth and it could be attributed to the measures taken by our government to achieve the economic recovery. This statement must please our government leaders greatly.

This was the same argument given to the booming property prices in Japan in the late 1980s. Although the property prices went to astronomical levels, the optimists justified them by pointing out  the exceptional performance of the Japanese economy, especially in exports. I could not remember if anyone said at that time that it reflected "a sign of rising wealth". The bubble burst in 1990 and the property prices have remained in the doldrums for two decades.

A similar situation could be found in America during the greater part of this decade. The rising home prices were justified by the reasoning that the American economy had inspired confidence of investors around the world. Well, the bubble had finally burst and even the most optimistic observers now do not expect any recovery for a few years. It could take longer.

The rising property prices in Singapore is more likely caused by the extremely low interest rates, the large influx of foreign workers and the inability of the government to anticipate the shortage of  housing. It is aggravated by the inflow of speculative foreign funds (and the lack of control of the inflow).

As with other countries, I expect the pain to come when the property prices correct in Singapore. I do not buy the argument that the government could cushion the fall as Singapore is a small place and can be managed. When things get out of control, it cannot be easily managed.

Tan Kin Lian

Flouting of traffic rules

Tan How Chuan wrote to the Straits Times Forum to suggest that the Police should penalise drivers who cause rear end collisions. He lamented the lack of enforcement action by the Police on drivers who float the traffic rules and engage in tailgating.

I agree with him. Many Singapore drivers have bad habits. They are impatient, sound the horn unnecessary and tailgate.

I observe that there are insufficient policemen on the road. It could be due to a desire to reduce the cost of the public sector. This is a short sighted measure. In a well managed society, there should be a certain ratio of policemen to the population. If the population increases, we need more policemen. The exception is when the people behaves well, reducing the need for policing. I do not see any evidence of such a good trend.

The situation is made worse when the top civil servants are rewarded on a KPI which includes the ability to reduce manpower cost, without regard to the negative impact on society. I wonder if this could be a reason?

Another possibility explanation is the inability to recruit people to take up the job of policemen, especially if it involves outdoor work. I know that many people aspire to join the banks or enter the financial sector, or even to take up jobs as property or insurance agents. They are able to earn more from these jobs, even though they do not add value to the wealth of the economy, except to help inflate asset bubbles.

Quite likely, it is a combination of both factors.

I expect the standard of safety and low crime rate to deteriorate in the future. This will be sad trend, as Singapore had the quality of being clean, green and safe - and they are now disappearing. Already, we are seeing criminal gang activities among the young. I suspect that the actual crime situation is worse than what has been reported in the newspapers.

Tan Kin Lian

Sunday, December 19, 2010

Read my book on financial planning

Dear Mr. Tan,
I do not have any life insurance and I would like to buy a whole life insurance. Now I am considering 2 life policies, i.e. NTUC VivoLife and GE FlexiLife 20.

As I have read your comments in your blog, VivoLife is not a good choice due to its low yield. However, I wish to get your advise on GE FlexiLife 20, if it is a better choice for me who do not own any policy.

I am 34 years old and looking for sum assured of $100,000 and a payable term of 20 years. Greatly appreciated for your advise.

Did you buy my book on financial planning? There is an explanation on how to evaluate a life insurance policy. You can buy it at

Data roaming charges

I wrote this letter giving some suggestion on data roaming charges. The Straits Times declined to publish this letter.

I urge the mobile operators to honor their commitments in the corporate social responsibility statements and avoid making profit from unwary customers. I also urge the regulators to come forward and carry out their duty to regulate the behavior of the mobile operators.

Insurance of co-payments

A consumer asked for my views about the rider that is offered by an insurance company to cover the co-payments under a Shield policy. The consumer gave me a lot of trivial details about the insurance rider - repeating what must have been told to him by the insurance agent. It is really a waste of my time to listen to the sale talk repeated by the consumer.

There is no need to buy the rider to insure the co-payments. This is explained in the FAQ here. The insurance agent will spin a long story to confuse the consumer and get the consumer to pay a few hundred dollars more in premium for the rider.

UK to ban commission on investment products (i.e. life insurance policies) from 2012

Read this article:

The UK Financial Service Authority found so much abuse with the sale of life insurance policies by commission based agents that they gave up trying to enforce ethics on them.

Risk of becoming an insurance agent [2]

I saw a friend, who is an engineer, studying to be an insurance agent. He said that this is where he can make more money. I asked him to read this message from the wife of an ex-insurance agent:

Low cost term insurance

Dear Mr. Tan
My husband is a Malaysian PR. He is not eligible to buy group insurance from SAF. What other option for him to buy low cost term insurance?

Here is another option to get low cost term insurance:

Although the premium is higher than the SAF group policy, it is still much lower than other types of life insurance policies.

Considering cost and coverage

Dear Mr.Tan:
I am considering to buy health insurance policy in singapore. I have done some research, I found that there are total 5 insurance company which have the medishield upgrade plan. Those are covering hospitalisation. out of 4 of the insurance company provide 100% cover for medical expense. and only NTUC-INCOME cover 90% of hospital bill.
How do you think the 100% cover and 90% cover? When we choose health insurance what should we need to take note?


You should consider the premium that you have to pay as well. The difference between 100% cover age and 90% coverage is small. The difference in premium should not exceed 10%. Read my views about Shield coverage in (search for "Shield" or "Medishield.)

Bumped into TKL website

Hi Mr Tan,
Bumped into your website resently. Found that you have put up a lot of useful educational materials which I believe will benefit a lot of people like me, who are not very financially literate and who would like to take better control over their personal financial matters and don't quite know how to do it. Thanks for the effort and keep it up!

You can buy my book on financial planning (
or attend the educational talks organiserd by FISCA (
or visit my blog (
or website (

FISCA Talk on Insurance - follow up questions

Dear Mr.Tan
Thank you for your talk and very useful advice for us on buying insurance.

1. Seminar Talk - Exercise 3. Earn interest 4% per annum, How much is the total contribution plus interest over 35 years? (Factor to be used is 73.65) Question: a) How to get 73.65 ? b) How to get 1,272,672?

Read this FAQ:

3. Mr.Tan, you have the best price for those PA and Term plan with less than $500.
Could you give me some insurance company ? I will find out and compare the price to less than $1,000. with insured 1million. From my record, I have asked some insurance companies and agents, they quoted me the price were more than $2,000. with insured 1 million.

Read this FAQ:

Selection of International Songs

Songs reflect the best of any language or culture. For a song to be popular, it has to be written by the best writers and musicians of that culture. I have selected a few of my favorite songs around the world. Here are the lyrics of the song in the original language and the translation into English. I find that it is enjoyable to learn a language and the culture of a people through its popular songs.

FISCA Talk - Consumer Guide to Insurance

The talk was held on 18 December 2010. It was well received. Here are some feedbacks:

Dear Mr Tan
I attended your  talk today ( and also the previous talk on investing for the long term). I believe Fisca and what you are doing is invaluable and it is very tragic re how poorly regulated financial services are in Singapore. Is there any way more people can get to know about financial literacy? I feel more people especially the old and less literate  should be protected against these scams. Like holding more talks  on a much larger scale? But I suppose it is a behemoth of an industry you might be up against.

Dear Mr Tan
Thanks for the illuminating talk on financial planning and insurance today, I've learned how to derived the costs of insurance as a result of your talk.  Thanks for your work in helping to educate and inform ordinary consumers like us.

More talks
I will be holding more talks on this topic. You can register at
Attendees of the talk can click here to download the zip file of the relevant FAQs from the TKL website. Here is the outline of the talk, but it is better to attend to talk.

Tan Kin Lian

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