Many organisations adopt the queue to decide on priority for a high demand product, such as:
* walk in selection of HDB flat
* a place in a choice primary school
* selection of a choice unit in a property launch
In some cases, a queue may be formed one or two days before the opening time. Security personnel are required to ensure the proper behaviour of the people int he queue. This is wasteful.
In a recent case, there is suspicion that news of the selection process may have leaked out, giving some applicants an unfair advantage over the other applications.
There is a better way to handle allocation of priority. Here are the steps:
* collect the application from the people who are interested
* allocate an application number to each application received before the closing date.
* draw the application numbers, either manually or through a computerised balloting system
* the drawing process can be audited to ensure that it is done transparently and fairly.
I hope that the relevant organisation can implement a better alternative to the queue.
Tan Kin Lian
Thursday, February 08, 2007
Wednesday, February 07, 2007
Sell SingTel shares
Someone asked if she should sell her SingTel shares at the Post Office now, as she heard that this service will be discontinued in March.
I asked my stockbroker for advice. He said that a shareholder who does not have a trading account with a stockbroker will find it better to sell the shares at the Post Office. It will be quite inconvenient to open an account and link to the CDP account, just to sell the SingTel shares.
However, if the shareholder has a trading account, then it is quite convenient to sell through the stockbroker.
He is not aware that the Post Office intends to withdraw this service.
I asked my stockbroker for advice. He said that a shareholder who does not have a trading account with a stockbroker will find it better to sell the shares at the Post Office. It will be quite inconvenient to open an account and link to the CDP account, just to sell the SingTel shares.
However, if the shareholder has a trading account, then it is quite convenient to sell through the stockbroker.
He is not aware that the Post Office intends to withdraw this service.
Poor return from Umbrella policy
Dear Mr Tan
I purchased the Umbrella policy in 1992, with a death/ permenant disability benefit of $50,000. My quarterly premium was $185.65. At that time, it was a popular product with good value for money.
However, 15 years on, I am a little disappointed with the value, as the policy bas not reached the break-even point. I have paid $11,000 in total premium, but the cash value to date is $10,009. This figure is lower than that projected in the quotation given to me at that time.
I would like to hear your comments on this policy.
PS. Last but not least, let me commend you for building Income into one of the most successful Insurance big boys it is today. Such is my confidence in Income that I had bought 3 other life policies and 4 Incomeshield Shield policies for myself and 3 dependents. Your impending departure would indeed be a loss to Income.
M
----------------------
Dear M
The Umbrella policy has a long break even point as it provides a relatively high coverage, compared to the premium.
Actually, the break even point should have occurred earlier, but this was extended due to the reduction in bonus rates during 2003 and 2004. The bonus rates have since been increased on two occasions. There will be a further increase in bonus rate this year.
I hope that, going forward, you will see the cash value increase at a faster rate.
With best wishes to you.
Tan Kin Lian
I purchased the Umbrella policy in 1992, with a death/ permenant disability benefit of $50,000. My quarterly premium was $185.65. At that time, it was a popular product with good value for money.
However, 15 years on, I am a little disappointed with the value, as the policy bas not reached the break-even point. I have paid $11,000 in total premium, but the cash value to date is $10,009. This figure is lower than that projected in the quotation given to me at that time.
I would like to hear your comments on this policy.
PS. Last but not least, let me commend you for building Income into one of the most successful Insurance big boys it is today. Such is my confidence in Income that I had bought 3 other life policies and 4 Incomeshield Shield policies for myself and 3 dependents. Your impending departure would indeed be a loss to Income.
M
----------------------
Dear M
The Umbrella policy has a long break even point as it provides a relatively high coverage, compared to the premium.
Actually, the break even point should have occurred earlier, but this was extended due to the reduction in bonus rates during 2003 and 2004. The bonus rates have since been increased on two occasions. There will be a further increase in bonus rate this year.
I hope that, going forward, you will see the cash value increase at a faster rate.
With best wishes to you.
Tan Kin Lian
Tuesday, February 06, 2007
eServices at South West CDC
South West Community Development Council (South West CDC) serves about one fifth of Singapore.
It's website has a directory of the social services provided in the district. It can be accessed easily through
SWCDC
e-Services
The services include:
Kindergarten
Child Care
Student Care
Disability
Medical
Eldercare
Education
Family
For example, it lists details of 100 kindergartens operating in the district.
It's website has a directory of the social services provided in the district. It can be accessed easily through
SWCDC
e-Services
The services include:
Kindergarten
Child Care
Student Care
Disability
Medical
Eldercare
Education
Family
For example, it lists details of 100 kindergartens operating in the district.
A hybrid plan
Hi Mr Tan,
Most of the insurance advice I see available seems to be around the two extremes:
- whole life policy
- term policy + invest the difference
My thoughts:-
Whole-life: Pro:whole life coverage with bonuses, Con: expensive
Term: Pro: cheap, Con: no coverage beyond end of term (high chance of outliving the policy)
Why is it that nobody mentions a hybrid solution? e.g. for a desired 100k sum assured, buy 50k whole life, 50k decreasing term. Over the course of the two policies, the bonuses added to the whole life plan will balance out with the decreasing term coverage. Costs are kept reasonable and coverage will last the entire lifetime.
BK
--------------
Dear BK
Your hybrid solution is quite good. Well done.
Under the buy term and invest the difference, it is likely that the savings with capital gains will be more than the sum assured at the end of the term of 20 years. So, there is no need to have any more insurance cover.
For example, if you are insured for $100,000 and you save $4,000 a year, the total savings with capital gains should be more than $100,000 at the end of 20 years
Tan Kin Lian
Most of the insurance advice I see available seems to be around the two extremes:
- whole life policy
- term policy + invest the difference
My thoughts:-
Whole-life: Pro:whole life coverage with bonuses, Con: expensive
Term: Pro: cheap, Con: no coverage beyond end of term (high chance of outliving the policy)
Why is it that nobody mentions a hybrid solution? e.g. for a desired 100k sum assured, buy 50k whole life, 50k decreasing term. Over the course of the two policies, the bonuses added to the whole life plan will balance out with the decreasing term coverage. Costs are kept reasonable and coverage will last the entire lifetime.
BK
--------------
Dear BK
Your hybrid solution is quite good. Well done.
Under the buy term and invest the difference, it is likely that the savings with capital gains will be more than the sum assured at the end of the term of 20 years. So, there is no need to have any more insurance cover.
For example, if you are insured for $100,000 and you save $4,000 a year, the total savings with capital gains should be more than $100,000 at the end of 20 years
Tan Kin Lian
Volatile Singapore Stockmarket
Here are the years when the stock market moved up and down by a big margin
1993 (1 yr) up 1000 points
1997-98 (2 yrs) down 1000 points
1999 (1 yr) up 1500 points
2000-02 (3 yrs) down 1200 points
2003-06 (3 yrs) up 1900 points
When will the market correct? And by how much?
1993 (1 yr) up 1000 points
1997-98 (2 yrs) down 1000 points
1999 (1 yr) up 1500 points
2000-02 (3 yrs) down 1200 points
2003-06 (3 yrs) up 1900 points
When will the market correct? And by how much?
Monday, February 05, 2007
Looking for a part time Personal Assistant
UPDATE: I HAVE RECEIVED MANY RESPONSES TO THIS ADVERTISEMENT. I AM LIKELY TO FIND A SUITABLE CANDIDATE FROM THOSE THAT HAVE RESPONDED. I WILL ONLY DECIDE IN A FEW WEEK'S TIME. I WILL NOT BE REPLYING TO NEW RESPONSES. SORRY.
----------------------------------------------------------------------
I wish to look for a part time Personal Assistant.
The candidate has to be familiar with Microsoft office software, access information on the internet, able to contact people over the telephone and e-mail, arrange travel and appointments, look after administrative matters.
The candidate can work from home. My work should take just a few hours each week. I will send my requests by e-mail. Perferably, the candidate should live in Ang Mo Kio, Bishan or Toa Payoh.
If you or your friend are interested, send a resume to me at kinlian@gmail.com. The starting date is around 1 April 2007.
----------------------------------------------------------------------
I wish to look for a part time Personal Assistant.
The candidate has to be familiar with Microsoft office software, access information on the internet, able to contact people over the telephone and e-mail, arrange travel and appointments, look after administrative matters.
The candidate can work from home. My work should take just a few hours each week. I will send my requests by e-mail. Perferably, the candidate should live in Ang Mo Kio, Bishan or Toa Payoh.
If you or your friend are interested, send a resume to me at kinlian@gmail.com. The starting date is around 1 April 2007.
Website to learn about insurance
There is a website that you can learn about insurance.
KnowYourInsurance
It is easy to learn and fun. You can take a test to check your understanding. Each topic should take only 20 minutes, or less.
About 300 people visit this website everyday. 40 learned a topic and 15 took the test.
You have the chance to win the following:
* Logic9 pocketbook
* Creative Divi Cam 428 worth $329.00!
Some popular topics:
Investment Linked Plan
Travel Insurance
Medical Insurance
Saving for Education
Life Annuity
Home Insurance
Nomination of Beneficiary
Personal Accident
Personal Accident Infectious Disease Plan (PA+ID)
Reverse Mortgage
Living Policy
and others.
KnowYourInsurance
It is easy to learn and fun. You can take a test to check your understanding. Each topic should take only 20 minutes, or less.
About 300 people visit this website everyday. 40 learned a topic and 15 took the test.
You have the chance to win the following:
* Logic9 pocketbook
* Creative Divi Cam 428 worth $329.00!
Some popular topics:
Investment Linked Plan
Travel Insurance
Medical Insurance
Saving for Education
Life Annuity
Home Insurance
Nomination of Beneficiary
Personal Accident
Personal Accident Infectious Disease Plan (PA+ID)
Reverse Mortgage
Living Policy
and others.
Can I change my fund to reduce risk?
Dear Mr Tan
I have the followings 2 policies which was purchased 13 years ago.
1) Investment Linked Insurance
This living policy was bought in 1996 and the premium invest in the Singapore Managed Fund, as at today cash value returns is about breakeven of the total premium I had paid and I believe this is becasue of the recent good performance of the SGX.
Please advice how can I protect the cash value as it depends on the performance of the stock markets. Should I switch to another fund eg their Asia or Global Fund?.
2) Asian Equity Fund
I have invested in this fund for about 10 years the value now is about 70% more than the capital I have invested. Should I cash out this investment now or leave it?
W
-------------------
Dear W
I suggest the you ask the insurance company to tell you the charges that you have to bear for the following:
* annual fund management fee
* mortality charge
You should also compare the performance of the fund with similar funds in the same category in the CPFIS website.
It is difficult to make a judgement on timing. I decided to sell my STI tracker fund about two months ago, and the market has increased by 20% since.
In my case, I felt that the market was too high and decided to take profit. I invested my proceeds in the money market fund of NTUC Income to earn 3% interest.
See www.income.coop/faq on Flexi Cash.
All the best for your decision.
Tan Kin Lian
I have the followings 2 policies which was purchased 13 years ago.
1) Investment Linked Insurance
This living policy was bought in 1996 and the premium invest in the Singapore Managed Fund, as at today cash value returns is about breakeven of the total premium I had paid and I believe this is becasue of the recent good performance of the SGX.
Please advice how can I protect the cash value as it depends on the performance of the stock markets. Should I switch to another fund eg their Asia or Global Fund?.
2) Asian Equity Fund
I have invested in this fund for about 10 years the value now is about 70% more than the capital I have invested. Should I cash out this investment now or leave it?
W
-------------------
Dear W
I suggest the you ask the insurance company to tell you the charges that you have to bear for the following:
* annual fund management fee
* mortality charge
You should also compare the performance of the fund with similar funds in the same category in the CPFIS website.
It is difficult to make a judgement on timing. I decided to sell my STI tracker fund about two months ago, and the market has increased by 20% since.
In my case, I felt that the market was too high and decided to take profit. I invested my proceeds in the money market fund of NTUC Income to earn 3% interest.
See www.income.coop/faq on Flexi Cash.
All the best for your decision.
Tan Kin Lian
Sunday, February 04, 2007
Every 6 years?
The Singapore stockmarket perform well every 6 years. It reached a peak in 1994, 2000 and 2006.
It dipped in 1996 (Asian Financial crisis) and 2002 (corporate scandals), ie about 2 years after reaching its high point. Will it crash in 2008?
I observe that the markets moved up to a very high level when the foreign funds move in. After making the profit, the foreign funds take profit and moved out. This caused the market to fall significantly.
Be careful. Watch out for the outflow of the foreign funds.
It dipped in 1996 (Asian Financial crisis) and 2002 (corporate scandals), ie about 2 years after reaching its high point. Will it crash in 2008?
I observe that the markets moved up to a very high level when the foreign funds move in. After making the profit, the foreign funds take profit and moved out. This caused the market to fall significantly.
Be careful. Watch out for the outflow of the foreign funds.
Part Time Work for Seniors
I will try to build up a demand for part time work for seniors, between age 50 to 75.
The suitable work are those around the neighbourhood. This is to avoid travel long distance. The types of work are:
* customer service in shops, bus terminus, MRT stations
* nursing and care of elderly, children and disabled
* administrative work to support small business
A suitable rate is $6 per hour. A higher rate is justified for work that require special skills.
The part time work can be for 25 hours a week or 100 hours a month. At the rate of $6, the earnings can be $600. The government provides the Workfare Bonus which can add another $50 a month.
As the seniors have probably retired from full time work, a monthly income of $600 to $800 can be a useful supplement to their savings. It is also useful to keep occupied.
I hope that this can lead to the creation of many service jobs in the neighbourhood.
The suitable work are those around the neighbourhood. This is to avoid travel long distance. The types of work are:
* customer service in shops, bus terminus, MRT stations
* nursing and care of elderly, children and disabled
* administrative work to support small business
A suitable rate is $6 per hour. A higher rate is justified for work that require special skills.
The part time work can be for 25 hours a week or 100 hours a month. At the rate of $6, the earnings can be $600. The government provides the Workfare Bonus which can add another $50 a month.
As the seniors have probably retired from full time work, a monthly income of $600 to $800 can be a useful supplement to their savings. It is also useful to keep occupied.
I hope that this can lead to the creation of many service jobs in the neighbourhood.
Traffic Congestion in Many Cities
Most cities around the world face the problem of traffic congestion.
What is the underlying cause? Poor public transport system. It forces many people to buy their personal cars. This adds to the traffic congestion problem. Things get worse.
Our traffic system in Singapore used to be quite good. In recent years, the roads are getting congested. We are facing the same problem as other cities.
Here are my views on how to tackle the underlying problems:
* put more buses and trains on the road
* make supply more than demand
* this will encourage more people to use the public transport
* during the initial period for each route, there is a deficit that needs to be financed by tax revenue
* the operations can be managed by a private operator, with a subsidy for the initial period
* the private operator can tender to run the service
* the charges are fixed
Using this approach, the private operator will have the incentive to operate efficiently. There is a public service that will attract commuters to use it (as it is partially financed by tax revenue). When more people use public transport, there will be less cars on the road.
I hope that my concept can be tried.
What is the underlying cause? Poor public transport system. It forces many people to buy their personal cars. This adds to the traffic congestion problem. Things get worse.
Our traffic system in Singapore used to be quite good. In recent years, the roads are getting congested. We are facing the same problem as other cities.
Here are my views on how to tackle the underlying problems:
* put more buses and trains on the road
* make supply more than demand
* this will encourage more people to use the public transport
* during the initial period for each route, there is a deficit that needs to be financed by tax revenue
* the operations can be managed by a private operator, with a subsidy for the initial period
* the private operator can tender to run the service
* the charges are fixed
Using this approach, the private operator will have the incentive to operate efficiently. There is a public service that will attract commuters to use it (as it is partially financed by tax revenue). When more people use public transport, there will be less cars on the road.
I hope that my concept can be tried.
Choice of Insurance Plans
Many people are confused with the common insurance plans.
Here is a brief description of the various insurance plans provided by NTUC Income. It helps the consumer to decide of the following plans.
Protection - whole life policy to pay the sum assured plus bonus on death
Living - whole life policy to pay the sum assured plus bonus on death or on the confirmed diagnosis of any of 30 dread disease
20 year Term - pays the sum assured on death during the term; policy cease at the end of the term
20 year Decreasing Term - pays the sum assured on death during the term; the sum assured reduces by 5% each year during the term
20 year Living benefit - pays the sum assured on death or occurence of any of 30 dread disease during the term.
To decide on the plan that suits your budget, you need to know approximately how much each plan cost, and the amount of insurance that you can afford.
You can find some sample figures at
Insurance Plans
Other Tips
Personal Website
Here is a brief description of the various insurance plans provided by NTUC Income. It helps the consumer to decide of the following plans.
Protection - whole life policy to pay the sum assured plus bonus on death
Living - whole life policy to pay the sum assured plus bonus on death or on the confirmed diagnosis of any of 30 dread disease
20 year Term - pays the sum assured on death during the term; policy cease at the end of the term
20 year Decreasing Term - pays the sum assured on death during the term; the sum assured reduces by 5% each year during the term
20 year Living benefit - pays the sum assured on death or occurence of any of 30 dread disease during the term.
To decide on the plan that suits your budget, you need to know approximately how much each plan cost, and the amount of insurance that you can afford.
You can find some sample figures at
Insurance Plans
Other Tips
Personal Website
Saturday, February 03, 2007
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.
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.
Thursday, February 01, 2007
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
---------------
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.
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
---------------
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
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
Wednesday, January 31, 2007
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
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
-------------------
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.
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
-------------------
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
----------
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
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
----------
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
--------------
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.
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
--------------
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.
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
--------------
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.
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
--------------
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.
Tuesday, January 30, 2007
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:
----------
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.
* 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:
----------
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
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
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.
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.
Monday, January 29, 2007
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.
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.
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.
Saturday, January 27, 2007
Easy Ads
Many people want to sell or lease their property or sell their cars. They depend on the property and car agents. The charges are high, and the results are uncertain.
The current alternative, of putting an advertisement in the newspaper, is costly and troublesome.
I wish to develop an alternative for the owners. There will be no charge for the advertisement. The owner only pays on a successful transaction. (Yes, I trust them).
The key feature of this website is that the main mode of communication is by mobile phone. This is convenient and relatively secure.
Agents can also use this service. By acting more efficiently and reducing their time, they can reduce their charges and pass the savings to the owners.
This will be ready in April. More details will be announce soon. The website (not ready yet) is www.easyads.sg
The current alternative, of putting an advertisement in the newspaper, is costly and troublesome.
I wish to develop an alternative for the owners. There will be no charge for the advertisement. The owner only pays on a successful transaction. (Yes, I trust them).
The key feature of this website is that the main mode of communication is by mobile phone. This is convenient and relatively secure.
Agents can also use this service. By acting more efficiently and reducing their time, they can reduce their charges and pass the savings to the owners.
This will be ready in April. More details will be announce soon. The website (not ready yet) is www.easyads.sg
How to pick the right stocks
Many people, on their retirement, have time to manage their personal investments.
If they know how to pick the right stocks, they can get a better return than the market average.
I plan to write a simulation game that trains people to pick the right stocks. They hae to study a few financial figures and read the recommendation of the analysts to make their decision.
They can run over several virtual years (each year will take 10 to 30 minutes) and learn from their experience.
Practice makes perfect.
This simulation game will be ready by April. It will be offered for FREE.
Website (not ready yet): www.stockpick.sg
If they know how to pick the right stocks, they can get a better return than the market average.
I plan to write a simulation game that trains people to pick the right stocks. They hae to study a few financial figures and read the recommendation of the analysts to make their decision.
They can run over several virtual years (each year will take 10 to 30 minutes) and learn from their experience.
Practice makes perfect.
This simulation game will be ready by April. It will be offered for FREE.
Website (not ready yet): www.stockpick.sg
Can I stop paying premium on my Living policy?
Dear Mr Tan
One of my living policies has been in force for 18 years. The total premium paid is $22,356. But the cash value is only $21,221.1, less than the total premium paid and cannot even breakeven. I am rather disappointed. Due to my age, I may not be able to continue paying for the premium, Mr Tan, what is your advice??
Mr Tan, I understand that you are leaving INCOME on 1 Apr 2007. You have done a lot and lot for the policy holders. especially the extra bonus every 5 years.
I would like to take this opportunity to thank you and wish you well, healthy and every successful in your future endeavours.
EN
----------------
Dear EN
The Living policy has a large coverage (ie death and 30 dread disease). This explains the reason for taking a long period to break even.
At any time, you have the option to stop paying the premiums, and keep it as a "paid up" policy with a reduced sum assured, or to cancel the policy and get the cash value (in which case the insurance coverage ceases).
My advice is to keep the Living policy up to age 70 and terminate it at that time. You can pay the premium out of your past savings. However, if it runs out, then you can consider the "paid up" or "surrender" options.
The good news is that the bonus rate for the Living policy will be increased this year.
Tan Kin Lian
One of my living policies has been in force for 18 years. The total premium paid is $22,356. But the cash value is only $21,221.1, less than the total premium paid and cannot even breakeven. I am rather disappointed. Due to my age, I may not be able to continue paying for the premium, Mr Tan, what is your advice??
Mr Tan, I understand that you are leaving INCOME on 1 Apr 2007. You have done a lot and lot for the policy holders. especially the extra bonus every 5 years.
I would like to take this opportunity to thank you and wish you well, healthy and every successful in your future endeavours.
EN
----------------
Dear EN
The Living policy has a large coverage (ie death and 30 dread disease). This explains the reason for taking a long period to break even.
At any time, you have the option to stop paying the premiums, and keep it as a "paid up" policy with a reduced sum assured, or to cancel the policy and get the cash value (in which case the insurance coverage ceases).
My advice is to keep the Living policy up to age 70 and terminate it at that time. You can pay the premium out of your past savings. However, if it runs out, then you can consider the "paid up" or "surrender" options.
The good news is that the bonus rate for the Living policy will be increased this year.
Tan Kin Lian
Enjoy lower charges on the Ideal plan
Hi Mr Tan,
I have recently encountered a case on Greatlink (ILP Plan). It seems the insurance charges of $100K is very high. At $100K S/A, the premium on just the insurance charges can go up to $1,819/yr at age 60 based on $250/mth premium.
I recalled one of your reply on Straits Times Forum on "Insurance Time Bomb Sets to Explode".
My client would like to seek your views and opinion on this.
JY (insurance adviser from NTUC Income)
--------------------
Dear JY
You can send this message to your client.
Dear Client
I advise you to take the Ideal plan from NTUC Income. It is similar to the GreatLink plan that has been recommended to you, but it has much lower charges.
If you read the FAQ on our Ideal plan, you will get a better understanding of the difference (ie much more than $30,000).
FAQ
I advise you not to be locked into the high mortality charges imposed by many insurance companies on their ILP plan. The charges are too high. It is better to buy your term insurance separately.
For the term assurance, I suggest that you buy the decreasing term assurance, under our i-Term. It provides a large coverage at a very low cost. Details at:
FAQ
Tan Kin Lian
I have recently encountered a case on Greatlink (ILP Plan). It seems the insurance charges of $100K is very high. At $100K S/A, the premium on just the insurance charges can go up to $1,819/yr at age 60 based on $250/mth premium.
I recalled one of your reply on Straits Times Forum on "Insurance Time Bomb Sets to Explode".
My client would like to seek your views and opinion on this.
JY (insurance adviser from NTUC Income)
--------------------
Dear JY
You can send this message to your client.
Dear Client
I advise you to take the Ideal plan from NTUC Income. It is similar to the GreatLink plan that has been recommended to you, but it has much lower charges.
If you read the FAQ on our Ideal plan, you will get a better understanding of the difference (ie much more than $30,000).
FAQ
I advise you not to be locked into the high mortality charges imposed by many insurance companies on their ILP plan. The charges are too high. It is better to buy your term insurance separately.
For the term assurance, I suggest that you buy the decreasing term assurance, under our i-Term. It provides a large coverage at a very low cost. Details at:
FAQ
Tan Kin Lian
Which university course should my son take?
Dear Mr Tan,
Appreciate your kind advice on which course should my son takes.
He will be in University next year, and has secured a place for a Double Degree in Engineering and BA. He is still confused and does not really know which course he should take. Can you give some lights and guidance?
T
------------------------------
Dear T
Frankly, I am not good at providing this type of guidance.
I have three children and they have strong opinions about what they wanted to do (which is diffferent from my opinion). I listened to them, and help them to make up their mind. It seems to work quite well.
Maybe, you can ask your son to send an e-mail to me. I can ask him a few questions and then help him to make his decision. I can also talk to him over the telephone. Will this be helpful?
Tan Kin Lian
Appreciate your kind advice on which course should my son takes.
He will be in University next year, and has secured a place for a Double Degree in Engineering and BA. He is still confused and does not really know which course he should take. Can you give some lights and guidance?
T
------------------------------
Dear T
Frankly, I am not good at providing this type of guidance.
I have three children and they have strong opinions about what they wanted to do (which is diffferent from my opinion). I listened to them, and help them to make up their mind. It seems to work quite well.
Maybe, you can ask your son to send an e-mail to me. I can ask him a few questions and then help him to make his decision. I can also talk to him over the telephone. Will this be helpful?
Tan Kin Lian
Policyholder is happy with settlement of Flight Delay claim
Dear Mr Tan
After due investigation by your Claims Dept, I received the payment for my flight delay this month.
I am very grateful and impressed by your readiness to do what is right and fair. Your impartiality in addressing even a trivial claim amount like my case has left me lost for words to describe my admiration and respect for you.
Thank you for allowing me to resubmit my claim and also to your colleagues in the Claims Dept for their prompt attention. I will definitely share this experience with anyone that I may come across in future who has doubts about your service standards.
I enjoyed reading your personal blogspot and believe your invaluable advices have saved many people from losing their hard earned monies in misinformed investment products.
I sincerely hope you would continue to be there for us even after you leave INCOME.
Honestly, I do not think it is easy to find someone like you to fill the gap when you leave INCOME but really hope your successor will continue your good works.
May I wish you good health and success in your future endeavours.
Thank you once again and take care.
AT
After due investigation by your Claims Dept, I received the payment for my flight delay this month.
I am very grateful and impressed by your readiness to do what is right and fair. Your impartiality in addressing even a trivial claim amount like my case has left me lost for words to describe my admiration and respect for you.
Thank you for allowing me to resubmit my claim and also to your colleagues in the Claims Dept for their prompt attention. I will definitely share this experience with anyone that I may come across in future who has doubts about your service standards.
I enjoyed reading your personal blogspot and believe your invaluable advices have saved many people from losing their hard earned monies in misinformed investment products.
I sincerely hope you would continue to be there for us even after you leave INCOME.
Honestly, I do not think it is easy to find someone like you to fill the gap when you leave INCOME but really hope your successor will continue your good works.
May I wish you good health and success in your future endeavours.
Thank you once again and take care.
AT
Thursday, January 25, 2007
Explanation on Cash Value of Bonus
Here is an e-mail from a policyholder who asked for an explanation about the computation of the cash value of the bonus. After a few exchanges, he is satisifed with the explanation.
---------------------------------------
Dear All
Thank you very much for your prompt reply. I am very grateful that you have readily responded and come forward personally to help clarifying the matter. I am delighted with such a high level of customer service which has surpassed anyone's expectation.
I feel better now that you have assured me that the computation of the cash value is in order, and that there will be a jump in the cash value in April 2007 when the 2006 bonus is declared.
I hope that you could understand my really concern on the cash value generated from the monthly premium which I have faithfully saved for the past 17 years. The cash value is particularly important to me in view of my age and future ability to continue with the payment.
EN
---------------------------------------
Dear All
Thank you very much for your prompt reply. I am very grateful that you have readily responded and come forward personally to help clarifying the matter. I am delighted with such a high level of customer service which has surpassed anyone's expectation.
I feel better now that you have assured me that the computation of the cash value is in order, and that there will be a jump in the cash value in April 2007 when the 2006 bonus is declared.
I hope that you could understand my really concern on the cash value generated from the monthly premium which I have faithfully saved for the past 17 years. The cash value is particularly important to me in view of my age and future ability to continue with the payment.
EN
Wednesday, January 24, 2007
Advice on investments
Each day, I receive a few requests from the public for my advice on how to invest their savings.
As I will be leaving NTUC Income shortly, I wish to suggest the following channels to obtain relevant information:
* FAQ on our products, at www.income.coop/faq
* Call the business center at 63INCOME (63462663)
It has been my pleasure to respond to the requests during the past few months. I hope that you find the new channels to be just as useful.
Tan Kin Lian
As I will be leaving NTUC Income shortly, I wish to suggest the following channels to obtain relevant information:
* FAQ on our products, at www.income.coop/faq
* Call the business center at 63INCOME (63462663)
It has been my pleasure to respond to the requests during the past few months. I hope that you find the new channels to be just as useful.
Tan Kin Lian
Change of focus of my Blog
I will be on leave from 20 Febuary 2007, prior to my retirement as CEO of NTUC Income. If you have any issue on the customer service of NTUC Income, please write to sq@income.coop.
I will continue to write in this blog about insurance, finance and current affairs in Singapore, but in my personal capacity. I also invite you to visit my website, www.tankinlian.com about my future plans.
I will continue to write in this blog about insurance, finance and current affairs in Singapore, but in my personal capacity. I also invite you to visit my website, www.tankinlian.com about my future plans.
A new chapter for an older employee
Dear Mr Tan,
I will always remember YOU for your magnanimous and will always be grateful to YOU for giving me hope and a new lease towards another chapter of of my life.
When other organisations were busily discarding their older employees you have the vision to employ them as CROs (Customer Relations Officers). Words cannot describe that wonderful feeling of being wanted in the society again.
I wish YOU Good Health, Good Luck and Many Good Years Ahead.
Warmest Regards
P
---------------
Dear P
I wish you all the best in your career in NTUC Income. Thank you for your heart warming words.
Tan Kin Lian
I will always remember YOU for your magnanimous and will always be grateful to YOU for giving me hope and a new lease towards another chapter of of my life.
When other organisations were busily discarding their older employees you have the vision to employ them as CROs (Customer Relations Officers). Words cannot describe that wonderful feeling of being wanted in the society again.
I wish YOU Good Health, Good Luck and Many Good Years Ahead.
Warmest Regards
P
---------------
Dear P
I wish you all the best in your career in NTUC Income. Thank you for your heart warming words.
Tan Kin Lian
How to invest the CPF OA for 5 years
Hi Mr Tan,
How do I go about investing $100K from my CPF-OA for 5 yrs & getting a good return + insurance + maturity bonus etc ?
This year, I am 50 yrs and intend to withdraw $50K in 5 yrs when I turn 55 yrs old.
JK
-------------------
Dear JK
If you are willing to invest for 10 years, you can consider our Growth plan.
If you wish to invest for 5 years and you do not wish to take any risk, you can consider the FlexiCash.
You can buy a low cost term insurance to provide the protection:
You can read the FAQ in our website, www.income.coop/faq
Tan Kin Lian
How do I go about investing $100K from my CPF-OA for 5 yrs & getting a good return + insurance + maturity bonus etc ?
This year, I am 50 yrs and intend to withdraw $50K in 5 yrs when I turn 55 yrs old.
JK
-------------------
Dear JK
If you are willing to invest for 10 years, you can consider our Growth plan.
If you wish to invest for 5 years and you do not wish to take any risk, you can consider the FlexiCash.
You can buy a low cost term insurance to provide the protection:
You can read the FAQ in our website, www.income.coop/faq
Tan Kin Lian
Financial Planning Talk on 10 Feb
I have been invited to give a talk on financial planning on 10 Febuary. More details can be found at www.olivo.com.sg.
This talk is organised by a group of people who aims to educate consumers about financial planning and to promote greater transparency and accountability in the financial services industry.
This is a tea-cum-talk session, and will include as another speaker, a well-known financial columnist "Dr Money" - Mr Larry Haverkamp.
This talk is organised by a group of people who aims to educate consumers about financial planning and to promote greater transparency and accountability in the financial services industry.
This is a tea-cum-talk session, and will include as another speaker, a well-known financial columnist "Dr Money" - Mr Larry Haverkamp.
3G phone work in Japan
I was surprised that my Nokia phone can work in Japan.It is able to recognise my 3G card. I can make telephone calls and access the internet. The telco is Softbank.
Hot spring resort in Japan
I spent two days at the Noboribetsu hot spring resort in Hokkaido, Japan. It is winter and snowing in Hokkaido.
Most of the guests at the hotel are Japanese. My wife and I are among the very few foreign guests. Although the staff are not familiar with English, they make a special effort to communicate with us. We were given clear written instructions in English on the arrangements for our meals and how to use the public bath.
The public bath, which is the key attraction of the resort, uses the mineral water from the hot spring.
The hotel is a Japanese style "ryokan". The room is furnished with tatami straw mats. A 13 course dinner is served in the room. Breakfast is served as a buffet in the breakfast room.
Most guests use a yukata and a happy coat to go to tbe breakfast room or to visit the public bath.
This is my first experience of a Japanese hot spring resort. I found it to be very relaxing and enjoyable.
Most of the guests at the hotel are Japanese. My wife and I are among the very few foreign guests. Although the staff are not familiar with English, they make a special effort to communicate with us. We were given clear written instructions in English on the arrangements for our meals and how to use the public bath.
The public bath, which is the key attraction of the resort, uses the mineral water from the hot spring.
The hotel is a Japanese style "ryokan". The room is furnished with tatami straw mats. A 13 course dinner is served in the room. Breakfast is served as a buffet in the breakfast room.
Most guests use a yukata and a happy coat to go to tbe breakfast room or to visit the public bath.
This is my first experience of a Japanese hot spring resort. I found it to be very relaxing and enjoyable.
Low birth rate in Japan
My Japanese friend told me that it cost an average of 20 million yen (SGD 250,000) to raise a child, taking into account education and other expenses. Many Japanese find it to be too expensive. They prefer to have 1 child or none at all.
Many females to have a good education and a working career before they get married. Many are marrying qute late, in their 30s, or remaining singles.
The birth rate is quite low.
Many females to have a good education and a working career before they get married. Many are marrying qute late, in their 30s, or remaining singles.
The birth rate is quite low.
Clean air in Tokyo
I visited Tokyo last week. I observe that the air was quite clean.My host said that this is due to the strict measures taken by the auhority in controlling pollution.
This was a big improvement from the situation 30 years ago. At that time, many people had to wear face masks to avoid breathing the polluted air.
Perhaps most of the manufacturing had moved to China. In many cities in China, the pollution is quite bad. I hope that the authority will take the appropriate measures to control the pollution and improve the quality of life. This will add to the cost of manufacturing, but will still make China quite competitive.
This was a big improvement from the situation 30 years ago. At that time, many people had to wear face masks to avoid breathing the polluted air.
Perhaps most of the manufacturing had moved to China. In many cities in China, the pollution is quite bad. I hope that the authority will take the appropriate measures to control the pollution and improve the quality of life. This will add to the cost of manufacturing, but will still make China quite competitive.
Friday, January 19, 2007
Troublesome immigration procedures
Japan has a troublesome immigration procedure.
I am required to complete three forms, with a lot of detail:
* health check
* immigration
* custom declaration
The officer require ALL the details to be filled in. Their form contain almost twice the detail required by other countries.
They require two copies of the custom declaration form to be completed. I don't understand why.
I wish that the Japanese authorities are more considerate to visitors to their country.
I am required to complete three forms, with a lot of detail:
* health check
* immigration
* custom declaration
The officer require ALL the details to be filled in. Their form contain almost twice the detail required by other countries.
They require two copies of the custom declaration form to be completed. I don't understand why.
I wish that the Japanese authorities are more considerate to visitors to their country.
Low cost term insurance
Annual premium to insure $100,000 f0r 20 years:
You can give your family adequate protection, for such a low cost.
Annual Premium
----- MALE ------- ----- FEMALE -----
Entry i- Term DTA i- Term DTA
Age
25 $123.45 $ 50.75 $ 94.60 $33.45
30 $154.60 $ 64.60 $120.00 $42.70
35 $218.05 $102.70 $161.55 $65.75
You can give your family adequate protection, for such a low cost.
Thursday, January 18, 2007
Put all your eggs in one basket?
Dear Mr Tan,
Is it advisable to get insurance or investment policies from difference insurance company instead of "putting all eggs in a same basket.? I have brought a few policies as below.
(Details of 6 policies with AIA and Great Eastern).
What are the consideration when choosing an insurance plan and policy? What would you advise? I am 40 years old.
WC
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Dear WC
It is all right to keep all your investments with one insurance company, if is is a large and well rated insurance company.
Furthermore, if you are investing in a few funds, some of these funds are likely to be managed by external fund managers. They are not affected by the performance of the internal managers employed by the insurance company.
My "financial tips" are set out below:
Tips
You can also read some of the postings in my blog www.tankinlian.blogspot.com
Tan Kin Lian
Is it advisable to get insurance or investment policies from difference insurance company instead of "putting all eggs in a same basket.? I have brought a few policies as below.
(Details of 6 policies with AIA and Great Eastern).
What are the consideration when choosing an insurance plan and policy? What would you advise? I am 40 years old.
WC
-------------
Dear WC
It is all right to keep all your investments with one insurance company, if is is a large and well rated insurance company.
Furthermore, if you are investing in a few funds, some of these funds are likely to be managed by external fund managers. They are not affected by the performance of the internal managers employed by the insurance company.
My "financial tips" are set out below:
Tips
You can also read some of the postings in my blog www.tankinlian.blogspot.com
Tan Kin Lian
Wednesday, January 17, 2007
Advisory fee of 45%
Hi Mr Tan,
I recently bought a policy in 2006 Ideal (ID2) whereby I contribute $100 every month.
As I got a insurance agent to review all my policies, I was being told that my policy has a advisory fee of 15% for the first 3 years which will eat into my investment-and I will not any return being the 15% is just too high. Any reason why the advisory fee is so high.?
P
---------------
Dear P
Please read this FAQ on the Ideal plan:
ID2
The advisory fee of 15% X 3 years is actually quite low, compared to similar plans in the market. So, you are getting quite good value for this plan.
The advisory fee is used to pay commission to the adviser (agent). Our agent earns a lower commission compared to other agents. That is why the advisory fee is much lower.
Most people invest for 10, 20 or 30 years. As a proportion of the total savings, the advisory fee is quite small.
I hope that you agree with me.
Tan Kin Lian
I recently bought a policy in 2006 Ideal (ID2) whereby I contribute $100 every month.
As I got a insurance agent to review all my policies, I was being told that my policy has a advisory fee of 15% for the first 3 years which will eat into my investment-and I will not any return being the 15% is just too high. Any reason why the advisory fee is so high.?
P
---------------
Dear P
Please read this FAQ on the Ideal plan:
ID2
The advisory fee of 15% X 3 years is actually quite low, compared to similar plans in the market. So, you are getting quite good value for this plan.
The advisory fee is used to pay commission to the adviser (agent). Our agent earns a lower commission compared to other agents. That is why the advisory fee is much lower.
Most people invest for 10, 20 or 30 years. As a proportion of the total savings, the advisory fee is quite small.
I hope that you agree with me.
Tan Kin Lian
Should I get a return for my life insurance savings
Dear Mr Tan,
I read your blog about low cost term insurance. But, my agent said that this does not give any return to me. He advised me to buy a life insurance policy that gives me a return on maturity. What is your advice to me?
CT
-----------------
Dear CT
Many insurance agents like their customer to buy an endowment or whole life policy, as the agent can earn a high rate of commission on the premium.
But, this makes the insurance too expensive and is not good for the customer.
It is better to buy a low cost term insurance (even if there is no return on the premium) and to invest the savings in a fund. Here are my tips:
Tips
Here are the information on the suitable plans:
Low cost Term Insurance
Invest in a Fund
I read your blog about low cost term insurance. But, my agent said that this does not give any return to me. He advised me to buy a life insurance policy that gives me a return on maturity. What is your advice to me?
CT
-----------------
Dear CT
Many insurance agents like their customer to buy an endowment or whole life policy, as the agent can earn a high rate of commission on the premium.
But, this makes the insurance too expensive and is not good for the customer.
It is better to buy a low cost term insurance (even if there is no return on the premium) and to invest the savings in a fund. Here are my tips:
Tips
Here are the information on the suitable plans:
Low cost Term Insurance
Invest in a Fund
Advantages of Flexi-Cash
Mr Tan
Many banks are now offering 3.2% to 3.5% on their fixed deposit. The return is guaranteed. What is the advantage of investing in Flexi-Cash or the Money Market Fund?
L
---------------
Dear L
Our Flexi-Cash is invested in the money market. It pays a floating interest rate, that is based on the return from the short term investments in the money market. During the past few months, the average return is between 3% to 3.5%.
The advantage of Flexi Cash is its flexibility. You can withdraw your money at any time, without any penalty. There is no lock-in period.
I have invested most of my spare savings in Flexi Cash as I intend to withdraw it, without any penalty, to invest in the equity market later in 2007 (if it corrects from the current level).
If I put the money on 1 year fixed deposit, I have to wait for the maturity date (and may miss the market opportunity). If I withdraw earlier, I have to pay a penalty.
It is better to invest in a flexible fund, with no penalty on early withdrawal.
It is also easy to transfer from Flexi Cash to Flexi Link (to be invested in the Combined Fund), as they are both managed by NTUC Income.
Many banks are now offering 3.2% to 3.5% on their fixed deposit. The return is guaranteed. What is the advantage of investing in Flexi-Cash or the Money Market Fund?
L
---------------
Dear L
Our Flexi-Cash is invested in the money market. It pays a floating interest rate, that is based on the return from the short term investments in the money market. During the past few months, the average return is between 3% to 3.5%.
The advantage of Flexi Cash is its flexibility. You can withdraw your money at any time, without any penalty. There is no lock-in period.
I have invested most of my spare savings in Flexi Cash as I intend to withdraw it, without any penalty, to invest in the equity market later in 2007 (if it corrects from the current level).
If I put the money on 1 year fixed deposit, I have to wait for the maturity date (and may miss the market opportunity). If I withdraw earlier, I have to pay a penalty.
It is better to invest in a flexible fund, with no penalty on early withdrawal.
It is also easy to transfer from Flexi Cash to Flexi Link (to be invested in the Combined Fund), as they are both managed by NTUC Income.
Tuesday, January 16, 2007
NTUC Income's funds give top return!
S&P CPFIS report, average return for 2003 to 2005:
The average annual return for the 17 Equity Global funds is 15.1%. NTUC Income's fund is 2nd, with 19.2%. Our expense ratio of 1.32% is lower than the average of 1.67%
The average annual return for the 17 Equity Global funds is 15.1%. NTUC Income's fund is 2nd, with 19.2%. Our expense ratio of 1.32% is lower than the average of 1.67%
Average Expense
return rate
FOF Utd Int'l Growth 19.3 1.19
NTUC Global Equity Fund 19.2 1.32
GreatLink Glo Gr Trend 18.3 2.02
HSBC Glo D High Growth 17.7 2.04
UOB LifeLink Global 17.3 1.13
OAC Retire Wise Aggresive 17.3
GreatLink Lifestyle Dynamic 16.8 1.45
HSBC Global Leaders Fund 16.8 1.05
GreatLink Global Value Equities 16.3 1.56
Prulink Global Eqty 16.0 1.56
John Hancock Worldwide Eqty 14.0 1.85
OUBML Golden Worldwide 13.5 1.67
AIA Portfolio 100 13.9 1.79
GreatLink Global Intersection 13.9 1.58
GreatLink Glb Equity 12.5 1.80
HSBC Global Strategic 50 13.3 2.13
HSBC Glo Dynamic All-Weather 0.8 2.55
Average 15.1 1.67
Monday, January 15, 2007
Star rating for NTUC Income's funds
Hi,
NTUC website has indicated that a few of your funds have won top4star ratings from S&P. I can't find these ratings on S&P website, perhaps you can help me to point to the appropriate link.
H
----------
Dear H
The information on ILP performance is under CPF Webpage --"Investor Education".
The web link is as follows
http://www.cpf.gov.sg/cpf_info/ie/IE_Results.asp
Tan Kin Lian
NTUC website has indicated that a few of your funds have won top4star ratings from S&P. I can't find these ratings on S&P website, perhaps you can help me to point to the appropriate link.
H
----------
Dear H
The information on ILP performance is under CPF Webpage --"Investor Education".
The web link is as follows
http://www.cpf.gov.sg/cpf_info/ie/IE_Results.asp
Tan Kin Lian
Should I invest my CPF special account now?
Hi Mr Tan
1. Should I keep my money in the CPF Special Account, as it now gives me 4%, risk free. I have read Askdrmoney.com. He has done extensive research to show that the best investment is to invest in STI ETF, followed by CPF SA, and thirdly CPF OA.
He explained that it is simply not worth taking the high risk of selecting which funds or which ILP to invest in, and then the returns might not be worth the risk.......since CPF SA is giving us a risk free guaranteed ROR of 4%.
CPF SA can only be invested in Balanced fund, and the projected return is around 5 to 6%.
I have a living policy with NTUC since 1994 when I came out of university. I recently decided to buy another term policy of 500k.
I also invested $13,000 in the Growth Fund since Jan 06. I am considering to switch into the money market funds for the time being till the markets correct.
HY
---------
Dear HY
As the stockmarket is rather high now, it is better to wait for another time, before you invest in the STI ETF or in the Combined Fund (Growth) from NTUC Income.
Two years ago, I invested in the STI ETF and made a big gain of 60%. I sold off my investment in the STI ETF recently and invested the proceeds in the money market fund.
The Growth Fund has 70% invested in equities. The balanced fund has 50% in equities. The difference is quite small. So, it may not be worth the trouble to make a switch. In my case, I kept my investments in the Growth Fund.
I agree with your approach to buy a term policy for $500,000. You get a large protection at a very modest cost. But, you must make additional savings for your retirement.
If you are investing a monthly sum, it is all right to put the investments in the Growth fund or the Balanced fund. You will be averaging out your investment over many years, so it does not matter what is the level of the stockmarket at any point of time.
Best wishes for 2007.
Tan Kin Lian
1. Should I keep my money in the CPF Special Account, as it now gives me 4%, risk free. I have read Askdrmoney.com. He has done extensive research to show that the best investment is to invest in STI ETF, followed by CPF SA, and thirdly CPF OA.
He explained that it is simply not worth taking the high risk of selecting which funds or which ILP to invest in, and then the returns might not be worth the risk.......since CPF SA is giving us a risk free guaranteed ROR of 4%.
CPF SA can only be invested in Balanced fund, and the projected return is around 5 to 6%.
I have a living policy with NTUC since 1994 when I came out of university. I recently decided to buy another term policy of 500k.
I also invested $13,000 in the Growth Fund since Jan 06. I am considering to switch into the money market funds for the time being till the markets correct.
HY
---------
Dear HY
As the stockmarket is rather high now, it is better to wait for another time, before you invest in the STI ETF or in the Combined Fund (Growth) from NTUC Income.
Two years ago, I invested in the STI ETF and made a big gain of 60%. I sold off my investment in the STI ETF recently and invested the proceeds in the money market fund.
The Growth Fund has 70% invested in equities. The balanced fund has 50% in equities. The difference is quite small. So, it may not be worth the trouble to make a switch. In my case, I kept my investments in the Growth Fund.
I agree with your approach to buy a term policy for $500,000. You get a large protection at a very modest cost. But, you must make additional savings for your retirement.
If you are investing a monthly sum, it is all right to put the investments in the Growth fund or the Balanced fund. You will be averaging out your investment over many years, so it does not matter what is the level of the stockmarket at any point of time.
Best wishes for 2007.
Tan Kin Lian
Is it better to buy a life annuity now, or wait till age 62?
Dear Mr Tan,
I like to seek your advice if it is better for us to purchase annuity at 55-year (with deferred payment till 62) or at 62-year old with the following amounts:
1. Female:
Available fund at 55 = $115,000
Available fund at 62 = $150,000
2. Male:
Available fund at 55 = $120,000
Available fund at 62 = $160,000
In addition, we wonder what is the difference between Income's Classic Annuity and Guranteed Life Annuity Plans?
N
------------------
Dear N
I think that it is better to invest in the annuity now, rather than wait for age 62. Based on our current rate of bonus, you will get a slightly higher payout at age 62, if you buy the annuity earlier. (But, I must mention that the bonus rate depend on future investment return, and is not guaranteed.
You can read about the annuity from this FAQ:
http://www.income.coop/insurance/glannuity/faq-lifeannuity.asp
Life Annuity
The Classic annuity is designed specifically for CPF minimum sum. You are only allowed to withdraw your money from age 62.
The Guaranteed Life Annuity can be taken at any time, and the payment commences immediately.
Tan Kin Lian
I like to seek your advice if it is better for us to purchase annuity at 55-year (with deferred payment till 62) or at 62-year old with the following amounts:
1. Female:
Available fund at 55 = $115,000
Available fund at 62 = $150,000
2. Male:
Available fund at 55 = $120,000
Available fund at 62 = $160,000
In addition, we wonder what is the difference between Income's Classic Annuity and Guranteed Life Annuity Plans?
N
------------------
Dear N
I think that it is better to invest in the annuity now, rather than wait for age 62. Based on our current rate of bonus, you will get a slightly higher payout at age 62, if you buy the annuity earlier. (But, I must mention that the bonus rate depend on future investment return, and is not guaranteed.
You can read about the annuity from this FAQ:
http://www.income.coop/insurance/glannuity/faq-lifeannuity.asp
Life Annuity
The Classic annuity is designed specifically for CPF minimum sum. You are only allowed to withdraw your money from age 62.
The Guaranteed Life Annuity can be taken at any time, and the payment commences immediately.
Tan Kin Lian
After 8 years, the investment is still negative
Hi Mr Tan,
I have 3 insurance policies - one investment-linked policy and 2 endowment policies.
I will keeping my endowment policies as they are my long-term savings.
As for the investment-linked policy, it is completed invested in Company P. I understand from this policy is that the mortality charges will go up as I grow older. My friend has told me that is is better to stop paying for this at age of 60.
Currently, I have kept this plan for eight years and owing to strong Singapore equity performance, the fund has performed above its benchmark. However, the value that I have accumulated in this account is still less than what I have paid in premiums.
Perhaps, the policy is still young and that part of the premiums go towards my insurance. Should I then terminate this policy and switch to a life insurance in which I only pay for 20 years and let the plan run? What do you think?
EH
----------------
Dear EH
I am surprised that after saving for 8 years, the value of your investments is still below what you have paid in premiums. It seems that the charges (for agent's commission and mortality charges) are too high.
I am not sure if it make sense for you to make a switch now. I suggest that you visit our business center and talk to our consultant. Maybe, the consultant can give you our proposal for you to make a judgement.
I have 3 insurance policies - one investment-linked policy and 2 endowment policies.
I will keeping my endowment policies as they are my long-term savings.
As for the investment-linked policy, it is completed invested in Company P. I understand from this policy is that the mortality charges will go up as I grow older. My friend has told me that is is better to stop paying for this at age of 60.
Currently, I have kept this plan for eight years and owing to strong Singapore equity performance, the fund has performed above its benchmark. However, the value that I have accumulated in this account is still less than what I have paid in premiums.
Perhaps, the policy is still young and that part of the premiums go towards my insurance. Should I then terminate this policy and switch to a life insurance in which I only pay for 20 years and let the plan run? What do you think?
EH
----------------
Dear EH
I am surprised that after saving for 8 years, the value of your investments is still below what you have paid in premiums. It seems that the charges (for agent's commission and mortality charges) are too high.
I am not sure if it make sense for you to make a switch now. I suggest that you visit our business center and talk to our consultant. Maybe, the consultant can give you our proposal for you to make a judgement.
Sunday, January 14, 2007
Avoid these insurance companies
Some life insurance companies condone the practice of their insurance agents in getting the customers to switch their old plans into new plans.
The unsuspecting customers have to incur the front end charge all over again. This is costly to the customers. The agents benefit, as they can earn a large commission all over again.
NTUC Income does not condone this practice. Our policyholders keep their policies with us for many years, much longer than other insurance companies.
Here is the proof.
Our market share in new business average about 12%. Our market share in in-force business is about 18%. Why is this possible?
The reason is simple. About one third of the business of other insurance companies are replaced by the insurance agents. These insurance agents tell their customers to switch to the new plans, which are supposed to be "better". In reality, the customer has to incur the front end charge all over again (up to two years of premiums) in making the switch. The agents earn the high commission again.
You should avoid insurance companies that have a high market share in new business, and a low market share in existing business. The insurance agents are likely to be replacing the old policies, at the expense of the customer.
The unsuspecting customers have to incur the front end charge all over again. This is costly to the customers. The agents benefit, as they can earn a large commission all over again.
NTUC Income does not condone this practice. Our policyholders keep their policies with us for many years, much longer than other insurance companies.
Here is the proof.
Our market share in new business average about 12%. Our market share in in-force business is about 18%. Why is this possible?
The reason is simple. About one third of the business of other insurance companies are replaced by the insurance agents. These insurance agents tell their customers to switch to the new plans, which are supposed to be "better". In reality, the customer has to incur the front end charge all over again (up to two years of premiums) in making the switch. The agents earn the high commission again.
You should avoid insurance companies that have a high market share in new business, and a low market share in existing business. The insurance agents are likely to be replacing the old policies, at the expense of the customer.
Do not incur the front end charge again!
Most life insurance companies (other than NTUC Income) impose a charge of up to 2 years of the premium to pay commission to the agent and other expenses. This high charge makes life insurance unattractive for most policyholders.
To make matters worse, some insurance agents advice their customers to switch from a previous plan, into a new plan. They tell the customer that the new plan is "better" than the old plan. The unsuspecting customer will have to incur the front end charge all over again.
If your insurance agent advise you to switch your plan, you should be suspicious. Ask the agent if you have to incur a front end charge again, and how much will it cost you.
Usually, it is better to stay with the original plan, as you have already incurred the high cost. If you have to make a switch, ask the agent to refund the front end charge on the new policy, back to you. After all, you have already paid for it on the first policy.
To make matters worse, some insurance agents advice their customers to switch from a previous plan, into a new plan. They tell the customer that the new plan is "better" than the old plan. The unsuspecting customer will have to incur the front end charge all over again.
If your insurance agent advise you to switch your plan, you should be suspicious. Ask the agent if you have to incur a front end charge again, and how much will it cost you.
Usually, it is better to stay with the original plan, as you have already incurred the high cost. If you have to make a switch, ask the agent to refund the front end charge on the new policy, back to you. After all, you have already paid for it on the first policy.
Friday, January 12, 2007
Get better terms for your car loan
Dear Mr Tan,
Income only charges 1% on the prepayment amount for early redemption of car loan, whereas all other banks and car financing schemes in the market use the rule 78 to calculate the interest rebate plus 20% surchrage.
I think that the other financiers are rather unreasonable. At one stage there were some efforts to change this by CASE. Would you care to comment on this?
W
-------------------
Dear W
We try to be competitive and fair in our loans, including the prepayment fee.
-----------------------
Dear Mr Tan
Although the car loan from Income is competitive, most car distributors package the car prices in such a way that the selling price is lower if the customer take up a loan with one of their so called in-house finance provided by the banks.
The consumer may end up paying a higher car price by not takin the in-house finance. I saw the following announcement in your website.
-------------------------
14 May 2004
NTUC Income offers a better deal on car loans
MEDIA RELEASE
NTUC Income recognises that the Rule of 78 puts the borrower of a car loan at a disadvantage when he redeems his loan earlier. We support the proposal by the Consumer Association of Singapore to change the system.
If the borrower wishes to redeem a car loan from us earlier, we compute the interest on the loan based on the daily balance. The borrower pays the exact amount of interest calculated at the effective rate, and is not penalised for early redemption of the loan.
Under the Rule of 78, the interest is not spread out evenly over the loan period. A person pays more interest at the start of the loan. About three-quarters of the interest are charged during the first half of the loan period. As a result, the outstanding amount reduces more slowly.
Chief Executive Officer Tan Kin Lian says: "Our computation of interest based on daily balance is fairer than the Rule of 78. We also adopt a flexible approach and allow the borrower to make bigger or accelerated repayment of the loan, if he has additional funds. This allows him to reduce his interest burden."
Here is an example of a motorist who takes a car loan for $70,000 repayable over eight years at 2.35 percent interest.
The total amount of interest is $13,160. If the borrower redeems the loan after three years, the balance payable under the rule of 78 can be as much as $47,837.
If the loan was taken from NTUC Income, it would have been computed on daily balance. The balance payable after 3 years is $46,463. The motorist saves $1,374.
Income only charges 1% on the prepayment amount for early redemption of car loan, whereas all other banks and car financing schemes in the market use the rule 78 to calculate the interest rebate plus 20% surchrage.
I think that the other financiers are rather unreasonable. At one stage there were some efforts to change this by CASE. Would you care to comment on this?
W
-------------------
Dear W
We try to be competitive and fair in our loans, including the prepayment fee.
-----------------------
Dear Mr Tan
Although the car loan from Income is competitive, most car distributors package the car prices in such a way that the selling price is lower if the customer take up a loan with one of their so called in-house finance provided by the banks.
The consumer may end up paying a higher car price by not takin the in-house finance. I saw the following announcement in your website.
-------------------------
14 May 2004
NTUC Income offers a better deal on car loans
MEDIA RELEASE
NTUC Income recognises that the Rule of 78 puts the borrower of a car loan at a disadvantage when he redeems his loan earlier. We support the proposal by the Consumer Association of Singapore to change the system.
If the borrower wishes to redeem a car loan from us earlier, we compute the interest on the loan based on the daily balance. The borrower pays the exact amount of interest calculated at the effective rate, and is not penalised for early redemption of the loan.
Under the Rule of 78, the interest is not spread out evenly over the loan period. A person pays more interest at the start of the loan. About three-quarters of the interest are charged during the first half of the loan period. As a result, the outstanding amount reduces more slowly.
Chief Executive Officer Tan Kin Lian says: "Our computation of interest based on daily balance is fairer than the Rule of 78. We also adopt a flexible approach and allow the borrower to make bigger or accelerated repayment of the loan, if he has additional funds. This allows him to reduce his interest burden."
Here is an example of a motorist who takes a car loan for $70,000 repayable over eight years at 2.35 percent interest.
The total amount of interest is $13,160. If the borrower redeems the loan after three years, the balance payable under the rule of 78 can be as much as $47,837.
If the loan was taken from NTUC Income, it would have been computed on daily balance. The balance payable after 3 years is $46,463. The motorist saves $1,374.
Buy term insurance?
Hi Mr Tan,
I like to check with you on the life insurance for my wife. She is 30 yrs old and in good health. We had a one-year son.
She had a breast scan and ultrascan on her uterus last year. The examinations discovered benign lumps on her breasts and fibroid on her uterus.
I had wanted to buy life insurance from Company X but they slapped a increase in the premium and exclusion of her reproductive organs. Due to this exclusion, I did not sign up for the insurance.
Recently, I had an agent from Company Y who said that he is willing to try for me to buy term insurance without the exclusion. However, the premium is about $50-$60 per month for $100,000.
Is the premiums too high as I compared the premium with one of the blogs on your website below?
What kind of plan do you recommend? I am open to any plans as long as she is adequately covered.
H
-------------
Dear H
Let me ask my colleague to take a look and see if we can offer better terms for your wife.
I like to check with you on the life insurance for my wife. She is 30 yrs old and in good health. We had a one-year son.
She had a breast scan and ultrascan on her uterus last year. The examinations discovered benign lumps on her breasts and fibroid on her uterus.
I had wanted to buy life insurance from Company X but they slapped a increase in the premium and exclusion of her reproductive organs. Due to this exclusion, I did not sign up for the insurance.
Recently, I had an agent from Company Y who said that he is willing to try for me to buy term insurance without the exclusion. However, the premium is about $50-$60 per month for $100,000.
Is the premiums too high as I compared the premium with one of the blogs on your website below?
What kind of plan do you recommend? I am open to any plans as long as she is adequately covered.
H
-------------
Dear H
Let me ask my colleague to take a look and see if we can offer better terms for your wife.
Winter in Dubai
I visited Dubai for two days earlier this week. It is winter in Dubai. The temperature is about 15 deg Celcius.
Many people think that the desert is hot the whole year round. This is a misconception.
A desert is a dry place. It can be cold. Imagine the Gobi Desert in China. I think that it can be very cold there.
Dubai is hot in summer, for three months - June, July and August. It can be very hot.
But it has winter as well.
Many people think that the desert is hot the whole year round. This is a misconception.
A desert is a dry place. It can be cold. Imagine the Gobi Desert in China. I think that it can be very cold there.
Dubai is hot in summer, for three months - June, July and August. It can be very hot.
But it has winter as well.
How to calculate the return on an annuity
Dear Mr Tan,
I am keen in this 'guaranteed income' product, but i was puzzled how they workout the yield as posted on income site, say 5 yrs term giving 3.46%?
Illustration: An investment of $100,000 provides an annual income of $22,125. The interest rate is shown as 3.46%.
My calculation is:
annual payout is 22,125-20,000 = 2,125 p.a
yield = 2,125/100,000 is only 2.152% p.a.
EK
--------------
Dear EK
To calculate the interest rate for this type of payment, you have to work out the reducing balance in each year, and find the right rate of interest that produces the correct result, is reduces to nil at the end of 5 years. We use a financial calculator to work out the sums.
If you calculate year by year and use the interest rate of 2.152%, you will find that there is insufficient money to make the final payment of $22,125.
You can use an Excel spreadsheet to work out the sums, using the interest rate of 2.152% and 3.46%.
Tan Kin Lian
I am keen in this 'guaranteed income' product, but i was puzzled how they workout the yield as posted on income site, say 5 yrs term giving 3.46%?
Illustration: An investment of $100,000 provides an annual income of $22,125. The interest rate is shown as 3.46%.
My calculation is:
annual payout is 22,125-20,000 = 2,125 p.a
yield = 2,125/100,000 is only 2.152% p.a.
EK
--------------
Dear EK
To calculate the interest rate for this type of payment, you have to work out the reducing balance in each year, and find the right rate of interest that produces the correct result, is reduces to nil at the end of 5 years. We use a financial calculator to work out the sums.
If you calculate year by year and use the interest rate of 2.152%, you will find that there is insufficient money to make the final payment of $22,125.
You can use an Excel spreadsheet to work out the sums, using the interest rate of 2.152% and 3.46%.
Tan Kin Lian
Magnanimous claim settlement
A policyholder was insured under the Dependent Protection Scheme. He suffered from persistent cough for 3months and eventually died of cancer. While seeking treatment, he overlooked to pay the premium for his insurance. At the time of death, the premium was outstanding for 4 months.
His wife made an appeal for the benefit under the Dependent Protection Scheme to be paid, in spite of the insurance cover being lapsed for non-payment of premium. The claims committee of NTUC Income considered the appeal. A decision was taken to pay the benefit in full, less the outstanding premium. The insured sum was $46,000.
The wife was very grateful for this compassionate and magnanimous decision. She sent the gratitude of the family to the members of the claim committee.
His wife made an appeal for the benefit under the Dependent Protection Scheme to be paid, in spite of the insurance cover being lapsed for non-payment of premium. The claims committee of NTUC Income considered the appeal. A decision was taken to pay the benefit in full, less the outstanding premium. The insured sum was $46,000.
The wife was very grateful for this compassionate and magnanimous decision. She sent the gratitude of the family to the members of the claim committee.
Tuesday, January 09, 2007
Please publicise your products more actively
Dear Mr Tan,
I read your blog about your investment plans. I was quite surprised that, for a typical saving plan, the plan from NTUC Income can give $20,000 to $30,000 more, compared to similar plans offered by other companies.
I wished that you had made this known earlier. It is too late for me, as I have already bought a more costly plan from my friend who worked for another insurance company. Why don't NTUC be more active in your marketing?
K
--------------------------
Dear K
I hope that you can help to tell your friends and family members. Ask them to come to NTUC Income.
They should act now, rather than wait. When an insurance agent (from another company sells to them), your friend is likely to be persuaded by the agent (who is very well trained and persuasive). Then, your friend will be stuck with a costly plan as well.
Here are the FAQs. Read them:
Flexi-Link
Ideal
I read your blog about your investment plans. I was quite surprised that, for a typical saving plan, the plan from NTUC Income can give $20,000 to $30,000 more, compared to similar plans offered by other companies.
I wished that you had made this known earlier. It is too late for me, as I have already bought a more costly plan from my friend who worked for another insurance company. Why don't NTUC be more active in your marketing?
K
--------------------------
Dear K
I hope that you can help to tell your friends and family members. Ask them to come to NTUC Income.
They should act now, rather than wait. When an insurance agent (from another company sells to them), your friend is likely to be persuaded by the agent (who is very well trained and persuasive). Then, your friend will be stuck with a costly plan as well.
Here are the FAQs. Read them:
Flexi-Link
Ideal
55% return from Prime Fund
Hi Mr Tan,
I bought policies from NTUC since I have started working. The most satisfying return I have seen so far is from my Prime Fund. I have started with $10K since 2001 and it is worth $15.5K now!
The rise in value is due to current good stock market performance. Should I sell it while the stock market is still hot or should I hold it as view it as a long term investment?
VW
----------------
Dear VW
Both options (to sell or hold) are suitable.
In my case, I decided to hold my existing investments (as I bought them at a low price). For new investments, I decided to put in the Money Market Fund and wait for the market to correct (before I invest into the Combined Fund).
I am sorry that I cannot be more specific in my advice to you.
Wish you all the best for 2007.
Tan Kin Lian
I bought policies from NTUC since I have started working. The most satisfying return I have seen so far is from my Prime Fund. I have started with $10K since 2001 and it is worth $15.5K now!
The rise in value is due to current good stock market performance. Should I sell it while the stock market is still hot or should I hold it as view it as a long term investment?
VW
----------------
Dear VW
Both options (to sell or hold) are suitable.
In my case, I decided to hold my existing investments (as I bought them at a low price). For new investments, I decided to put in the Money Market Fund and wait for the market to correct (before I invest into the Combined Fund).
I am sorry that I cannot be more specific in my advice to you.
Wish you all the best for 2007.
Tan Kin Lian
Monday, January 08, 2007
Invest in Vietnam?
Dear Mr Tan,
I find that the stock market is too high now for investment where the risk is high and the return is limited.
I am now considering the investment in some funds related to Vietnam, where I see it as a potential glowing market. Do you think this is a right move?
EL
----------------
Dear EL
I am not familiar with Vietnam. So, I cannot advise you.
Generally, if you wish to invest in a fund, you should look at the fund manager, their knowledge of the market, size of the fund, charges.
Tan Kin Lian
I find that the stock market is too high now for investment where the risk is high and the return is limited.
I am now considering the investment in some funds related to Vietnam, where I see it as a potential glowing market. Do you think this is a right move?
EL
----------------
Dear EL
I am not familiar with Vietnam. So, I cannot advise you.
Generally, if you wish to invest in a fund, you should look at the fund manager, their knowledge of the market, size of the fund, charges.
Tan Kin Lian
My blog after 1 April 2007
Many people ask me to continue writing my blog after 1 April 2007.
I will try my best. It depends on whether I have access to the issues facing ordinary people, and my ability to find the right answers.
I will try my best. It depends on whether I have access to the issues facing ordinary people, and my ability to find the right answers.
Tell your friends
Do me a favour.
Tell your friends to ready my blog.
www.tankinlian.blogspot.com
They can post questions to me at my website, www.tankinlian.com
Tell your friends to ready my blog.
www.tankinlian.blogspot.com
They can post questions to me at my website, www.tankinlian.com
Disabilty income insurance
Hi Mr Tan
I have been offered a disability income plan. It provides a monthly income in the event of disability due to illness or accident. The income will be payable in the event of continuous Disability of the Life Assured exceeding the Deferred Period. This plan does not have any cash value or maturity value.
The premiums are not guaranteed and may be adjusted based on future experience or due to changes in occupation or country of residence. Premium is S$50 per month for monthly benefit of S$2,000 at a policy term of 25 years.
I find it quite expensive. What do you think?
L
--------------
Dear L
You are paying a rate of 2.5% for the benefit. This means that the insurer expects up to 2.5% of policyholders to make a claim. The rate of claim, at a young age, is very low.
You should also consider the duration of the deferred period (for which the benefit is not payable) and the maximum length that the benefit is payable.
I am not experienced in this product, but I think that a rate of 1% or maybe 1.5% is attractive, but 2.5% seems to be quite high.
Tan Kin Lian
I have been offered a disability income plan. It provides a monthly income in the event of disability due to illness or accident. The income will be payable in the event of continuous Disability of the Life Assured exceeding the Deferred Period. This plan does not have any cash value or maturity value.
The premiums are not guaranteed and may be adjusted based on future experience or due to changes in occupation or country of residence. Premium is S$50 per month for monthly benefit of S$2,000 at a policy term of 25 years.
I find it quite expensive. What do you think?
L
--------------
Dear L
You are paying a rate of 2.5% for the benefit. This means that the insurer expects up to 2.5% of policyholders to make a claim. The rate of claim, at a young age, is very low.
You should also consider the duration of the deferred period (for which the benefit is not payable) and the maximum length that the benefit is payable.
I am not experienced in this product, but I think that a rate of 1% or maybe 1.5% is attractive, but 2.5% seems to be quite high.
Tan Kin Lian
A safe investment for CPF savings
Hi Mr Tan,
I am looking into investing my CPF money. I am 30 and have been working for 4 yrs. I currently have about $40,000 in my CPF OA.
I am considering between the Growth and Flexi-Link Plans from NTUC Income. I am thinking of putting $25,000 into the Growth Plan first (since there is a current promotion for 1% bonus sum assured) and the rest later into the Flexi-Link Plan (growth fund) when the market cools down a bit.
What are your thoughts?
G
-------------------
Dear G
Your approach is good. Many people take the same approach.
The Growth plan can earn slightly more than 4% p.a.
Growth
I am looking into investing my CPF money. I am 30 and have been working for 4 yrs. I currently have about $40,000 in my CPF OA.
I am considering between the Growth and Flexi-Link Plans from NTUC Income. I am thinking of putting $25,000 into the Growth Plan first (since there is a current promotion for 1% bonus sum assured) and the rest later into the Flexi-Link Plan (growth fund) when the market cools down a bit.
What are your thoughts?
G
-------------------
Dear G
Your approach is good. Many people take the same approach.
The Growth plan can earn slightly more than 4% p.a.
Growth
Sunday, January 07, 2007
Troublesome to handle many tokens
Last week, Today published my letter suggesting that the banks should appoint a third party to issue the tokens for internet banking. Each customer only need to have 1 personal token which can be used to transact with any financial institution in Singapore.
Here is the experience of a customer. She had a bank account with DBS Bank and HSBC Bank. The two banks sent two separate tokens to her.
She had to carry the two tokens with her, as she does her internet banking at the office. She misplaced one token, and had to pay $20 for a replacement.
She is worried now, in case other financial institutions sent more tokens to her for their internet access.
She likes my idea of having one personal token to be used for all internet access.
Here is the experience of a customer. She had a bank account with DBS Bank and HSBC Bank. The two banks sent two separate tokens to her.
She had to carry the two tokens with her, as she does her internet banking at the office. She misplaced one token, and had to pay $20 for a replacement.
She is worried now, in case other financial institutions sent more tokens to her for their internet access.
She likes my idea of having one personal token to be used for all internet access.
Dread disease policy with premium payable for 25 years
A policyholder bought a life insurance policy from company X (not NTUC Income) to cover $30,000 payable on death and critical illness (30 dread disease).
Company X has advertised that they were able to maintain their bonus over the past years (in spite of bonus cuts made by other companies).
Here are the brief facts:
1) Premium is $64.10 per month, payable for 25 years
2) Sum Assured is $30,000 payable on death, permanent disability and 30 critical illness
3) Protection Value at end of 25 years: Guaranteed $30,000, non-Guaranteed $14,827, Total $44,827
4) Cash Value at end of 25 years: Guaranteed $13,620, non-Guaranteed $6,718 Total $20338
The total premiums paid over 25 years is $19,225. The total cash value (not guaranteed) of $20,338 represents a return of 0.45% p.a. for the 25 years.
It is a poor return. This assumes that the non-guaranteed benefit is paid out as projected by company X.
I believe that a similar plan from NTUC Income should provide a better return, maybe 2% p.a. Our payment should be more than $20,338, even after allowing for the life insurance cover given for 25 years.
I have asked my colleague to calcuate our projected payout. I will post it later.
Company X has advertised that they were able to maintain their bonus over the past years (in spite of bonus cuts made by other companies).
Here are the brief facts:
1) Premium is $64.10 per month, payable for 25 years
2) Sum Assured is $30,000 payable on death, permanent disability and 30 critical illness
3) Protection Value at end of 25 years: Guaranteed $30,000, non-Guaranteed $14,827, Total $44,827
4) Cash Value at end of 25 years: Guaranteed $13,620, non-Guaranteed $6,718 Total $20338
The total premiums paid over 25 years is $19,225. The total cash value (not guaranteed) of $20,338 represents a return of 0.45% p.a. for the 25 years.
It is a poor return. This assumes that the non-guaranteed benefit is paid out as projected by company X.
I believe that a similar plan from NTUC Income should provide a better return, maybe 2% p.a. Our payment should be more than $20,338, even after allowing for the life insurance cover given for 25 years.
I have asked my colleague to calcuate our projected payout. I will post it later.
Friday, January 05, 2007
Invest in the Growth plan to earn about 4% p.a.
Dear Mr Tan,
I read in your blog that you have parked your fund into Money market to earn 3% interest, as you feel that the stock market is too high and will wait for the correction in 1 to 2 years time before you reinvest.
Does this mean that the Ideal Plan is considered risky in the next 12 months?
Besides the Flexicash, what other form of investment using SRS account would you recommend while waiting for the stock market to correct? 3% interest is pretty good actually!
W
---------------
Dear W
The Ideal plan takes in monthly investments over a period of many years. So, it does not matter that the market is too high at any point of time. The investments will be averaged out over the years.
If you are investing a lump sum (through FlexiLink), then you will to be careful not to commit all the money at a time when the market is too high. This is why I wish to wait for a better time.
If you are keen to earn a return of about 4% to 4.5% over 10 to 15 years, you can consider the Growth plan. A part of the return (about 2%) is guaranteed and the remaining return is variable (ie in the form of bonus declared by the NTUC Income).
The plan is locked in for 10 to 15 years, so you cannot withdraw it early. Please read:
Growth
Tan Kin Lian
I read in your blog that you have parked your fund into Money market to earn 3% interest, as you feel that the stock market is too high and will wait for the correction in 1 to 2 years time before you reinvest.
Does this mean that the Ideal Plan is considered risky in the next 12 months?
Besides the Flexicash, what other form of investment using SRS account would you recommend while waiting for the stock market to correct? 3% interest is pretty good actually!
W
---------------
Dear W
The Ideal plan takes in monthly investments over a period of many years. So, it does not matter that the market is too high at any point of time. The investments will be averaged out over the years.
If you are investing a lump sum (through FlexiLink), then you will to be careful not to commit all the money at a time when the market is too high. This is why I wish to wait for a better time.
If you are keen to earn a return of about 4% to 4.5% over 10 to 15 years, you can consider the Growth plan. A part of the return (about 2%) is guaranteed and the remaining return is variable (ie in the form of bonus declared by the NTUC Income).
The plan is locked in for 10 to 15 years, so you cannot withdraw it early. Please read:
Growth
Tan Kin Lian
Comparison of Motor Insurance Premiums
My colleague carries out a comparison of motor insurance premiums among the top insurers in Singapore. Here is the latest findings.
10 models of vehicles are compared. The premiums charge by the competitors can be up to 50% higher than NTUC Income.
10 models of vehicles are compared. The premiums charge by the competitors can be up to 50% higher than NTUC Income.
New Cars 3 Years 6 Years
NTUC Income $519 100% $504 100% $475 100%
Company A $782 151% $712 141% $721 152%
Company B $641 124% $591 117% $586 124%
Company C $546 105% $589 117% $618 130%
Exit interviews of maids
Editor
Today
I refer to the letter from Lim Song Joo entitled "Exit reviews will improve maid quality" (Today, 5 January 2007).
Mr Lim suggested that the Ministry of Manpower should carry out exit interviews of maids and make the information available for future employers who may employ these maids on their return to Singapore. This allows a maid with a good record to earn a better salary from the next employer.
I agree with this suggestion. It is a useful service.
If the Ministry does not wish to be involved in this new activity, I suggest that the Ministry can appoint a private organisation to carry out the work. This organisation can manage a database and perform the work according to the standards specified by the Ministry.
There is also a need to assess the suitability of maids who are coming to Singapore for the first time. I suggest that the employer try out the maid and provide information to the central database. This information will be useful to place the maid with a suitable household. Some maids may be not suitable for certain households but may be acceptable for other households.
As many people in Singapore depend on maids, it is timely for us to use database technology to improve the recruitment process.
Tan Kin Lian
Today
I refer to the letter from Lim Song Joo entitled "Exit reviews will improve maid quality" (Today, 5 January 2007).
Mr Lim suggested that the Ministry of Manpower should carry out exit interviews of maids and make the information available for future employers who may employ these maids on their return to Singapore. This allows a maid with a good record to earn a better salary from the next employer.
I agree with this suggestion. It is a useful service.
If the Ministry does not wish to be involved in this new activity, I suggest that the Ministry can appoint a private organisation to carry out the work. This organisation can manage a database and perform the work according to the standards specified by the Ministry.
There is also a need to assess the suitability of maids who are coming to Singapore for the first time. I suggest that the employer try out the maid and provide information to the central database. This information will be useful to place the maid with a suitable household. Some maids may be not suitable for certain households but may be acceptable for other households.
As many people in Singapore depend on maids, it is timely for us to use database technology to improve the recruitment process.
Tan Kin Lian
Should I pay off my loan?
Dear Mr Tan,
I have been reading your blog for quite sometimes. Very interesting and I really admire, person on high position like you still want to share and actively update your blog... I hope you will still do it although you have left Income.
I have one case study, on how do you going to invest your money. If you have 100K on hand now, base on current market condition. What would you do? How are you going to invest that money?
You are employed and your salary is more then enough to cover your expense. You have remaining liability which is your housing loan. Would you pay off some of your housing loan? Would you buy blue chip stock? Would you invest in Growth Fund or Fixed Deposit?
RK
--------------------
Dear RK
Recently, I withdrew $500,000 from my CPF. I decided to invest it in the Money Market Fund to earn about 3% interest. The interest rate varies with the market.
I did not want to invest in the stock market, as I felt that it was rather high. Actually, the stock market went up another 5% since, so I missed this part of the appreciation.
My intention is to wait for the market to correct within the next 1 or 2 years, before I invest in the market.
I have passed investments which I am still keeping in the funds, i.e. I am not withdrawing them now. So, I am partly invested and partly in cash.
In your case, if you are paying interest at 4% or more from your housing loan, it may be better to repay your housing loan. If it is lower than 4%, then you can keep the loan and invest in the money market fund (to wait for a better time to invest in the stock market.
I hope that this suggesion is useful to you.
Tan Kin Lian
-------------
Dear Mr Tan
Thanks for your suggestion. Really realy usefull...
RK
I have been reading your blog for quite sometimes. Very interesting and I really admire, person on high position like you still want to share and actively update your blog... I hope you will still do it although you have left Income.
I have one case study, on how do you going to invest your money. If you have 100K on hand now, base on current market condition. What would you do? How are you going to invest that money?
You are employed and your salary is more then enough to cover your expense. You have remaining liability which is your housing loan. Would you pay off some of your housing loan? Would you buy blue chip stock? Would you invest in Growth Fund or Fixed Deposit?
RK
--------------------
Dear RK
Recently, I withdrew $500,000 from my CPF. I decided to invest it in the Money Market Fund to earn about 3% interest. The interest rate varies with the market.
I did not want to invest in the stock market, as I felt that it was rather high. Actually, the stock market went up another 5% since, so I missed this part of the appreciation.
My intention is to wait for the market to correct within the next 1 or 2 years, before I invest in the market.
I have passed investments which I am still keeping in the funds, i.e. I am not withdrawing them now. So, I am partly invested and partly in cash.
In your case, if you are paying interest at 4% or more from your housing loan, it may be better to repay your housing loan. If it is lower than 4%, then you can keep the loan and invest in the money market fund (to wait for a better time to invest in the stock market.
I hope that this suggesion is useful to you.
Tan Kin Lian
-------------
Dear Mr Tan
Thanks for your suggestion. Really realy usefull...
RK
Thursday, January 04, 2007
Should I re-invest my money in India?
Dear Mr Tan
I had worked in Singapore (acquired PR and am still retaining it as of now) for 2.5 years but have now relocated to India and am working in India.
While in Singapore, I had subscribed for three united liked policies from Company X to plan for my children's education needs. The initial load is high 100% for yr-1 and 50% each in yr-2 and 3. It is nearly three years now.
Though I have moved to India, I continued servicing these policies regularly.
There is a lot of opportunity in India to get a relatively larger return compared to the returns from my insurance policies.
Should I continue servicing these policies OR should I terminate them and reinvest in India? Servicing these policies is bit difficult as I have to remit foreign currency each month and expensive (forex exchange costs etc.)
While India give a higher nominal return, the possible devaluation of Indian Rupee against the Singapore Dollar could change the scenario a bit.
VR
--------------------
Dear VR
i enclose a FAQ on the Ideal plan from NTUC Income. I think that this plan is similar to the plan that you have bought from Company X.
Ideal
You can see that the upfront charge for our Ideal plan is 45% of the annual premium, compared to 200% charged by Company X. Our annual charge is also quite low, compared to most other funds.
Apart from the difference in upfront charge, you should also consider the annual charge. A difference of 1% can work out to a lot of money over 15 to 20 years.
The options available to you are:
a) To continue the existing policies with Company X
b) To switch to other investment policies in Singapore with lower charges
c) To invest in India
You are correct in pointing out the higher return in India and the potential risk of devaluation. This is an area that I am not well versed in.
Generally, I encourage my policyholders to invest in a global equity fund, to enjoy diversification and a potentially higher return (compared to investing in a specific country).
You also mentioned the trouble of remitting money to Singapore. Perhaps you can take an annual premium policy, to avoid the need for frequent remittance.
I hope that you find my comments to be helpful. I wish you all the best for 2007.
Tan Kin Lian
I had worked in Singapore (acquired PR and am still retaining it as of now) for 2.5 years but have now relocated to India and am working in India.
While in Singapore, I had subscribed for three united liked policies from Company X to plan for my children's education needs. The initial load is high 100% for yr-1 and 50% each in yr-2 and 3. It is nearly three years now.
Though I have moved to India, I continued servicing these policies regularly.
There is a lot of opportunity in India to get a relatively larger return compared to the returns from my insurance policies.
Should I continue servicing these policies OR should I terminate them and reinvest in India? Servicing these policies is bit difficult as I have to remit foreign currency each month and expensive (forex exchange costs etc.)
While India give a higher nominal return, the possible devaluation of Indian Rupee against the Singapore Dollar could change the scenario a bit.
VR
--------------------
Dear VR
i enclose a FAQ on the Ideal plan from NTUC Income. I think that this plan is similar to the plan that you have bought from Company X.
Ideal
You can see that the upfront charge for our Ideal plan is 45% of the annual premium, compared to 200% charged by Company X. Our annual charge is also quite low, compared to most other funds.
Apart from the difference in upfront charge, you should also consider the annual charge. A difference of 1% can work out to a lot of money over 15 to 20 years.
The options available to you are:
a) To continue the existing policies with Company X
b) To switch to other investment policies in Singapore with lower charges
c) To invest in India
You are correct in pointing out the higher return in India and the potential risk of devaluation. This is an area that I am not well versed in.
Generally, I encourage my policyholders to invest in a global equity fund, to enjoy diversification and a potentially higher return (compared to investing in a specific country).
You also mentioned the trouble of remitting money to Singapore. Perhaps you can take an annual premium policy, to avoid the need for frequent remittance.
I hope that you find my comments to be helpful. I wish you all the best for 2007.
Tan Kin Lian
Should I get out of these structured products?
Dear Mr Tan,
Two years ago, I put my SRS savings into 2 principle protected 6-years structured deposit with X Bank.
The value has dropped since day 1, despite of the strong equity market in the last two years.
I chose the structured deposit to get a better return than bank interest and to avoid the risk of investing in unit trusts.
Looking back I realised that this was a mistake. I would have got a better return if I had invested in the NTUC Income's Combined Fund, for example.
I am thinking of redeeming the structured deposit now. I will lose between 9% to 12% after taking into account the guaranteed payout received during the first year. Is this a wise move?
WF
--------------------------
Dear WF
Can you give me some details about the structured deposit. What is it invested in? What are the charges?
I suggest that you write to Bank X and ask them to give you an explanation in writing about its poor performance to date. They owe it to you.
You can check this website, www.askdrmoney, to see if there is any information about this structured deposit.
As the equity market is now quite high, I do not advise you to make a switch into the Combined Fund now. Maybe, you should wait for the market to correct.
-----------------------------
Dear Mr Tan,
The structured deposits are the Vitamin and Harvest accounts. Here are the fact sheets. This is a classic example of bad investment products that small investors should be aware of.
-------------------------------
Dear WF
I suggest that you ask Bank X to tell you the following:
1. What is the payout for each year that you have invested up to now?
2. How much has the underlying shares appreciated during the same period?
3. What is the likelihood of early redemption (for the Vitamin account)?
4. What is the amount that you will get, if you decide to encash now (compared to the amount that you have invested.
I find these products to be quite complicated. I am not clear if the structuring is fair to the consumer. I hope that the answers to the 4 questions will shed some l light. You may be able to make a better decision, after you got these facts.
Let me wish you all the best for 2007.
Two years ago, I put my SRS savings into 2 principle protected 6-years structured deposit with X Bank.
The value has dropped since day 1, despite of the strong equity market in the last two years.
I chose the structured deposit to get a better return than bank interest and to avoid the risk of investing in unit trusts.
Looking back I realised that this was a mistake. I would have got a better return if I had invested in the NTUC Income's Combined Fund, for example.
I am thinking of redeeming the structured deposit now. I will lose between 9% to 12% after taking into account the guaranteed payout received during the first year. Is this a wise move?
WF
--------------------------
Dear WF
Can you give me some details about the structured deposit. What is it invested in? What are the charges?
I suggest that you write to Bank X and ask them to give you an explanation in writing about its poor performance to date. They owe it to you.
You can check this website, www.askdrmoney, to see if there is any information about this structured deposit.
As the equity market is now quite high, I do not advise you to make a switch into the Combined Fund now. Maybe, you should wait for the market to correct.
-----------------------------
Dear Mr Tan,
The structured deposits are the Vitamin and Harvest accounts. Here are the fact sheets. This is a classic example of bad investment products that small investors should be aware of.
-------------------------------
Dear WF
I suggest that you ask Bank X to tell you the following:
1. What is the payout for each year that you have invested up to now?
2. How much has the underlying shares appreciated during the same period?
3. What is the likelihood of early redemption (for the Vitamin account)?
4. What is the amount that you will get, if you decide to encash now (compared to the amount that you have invested.
I find these products to be quite complicated. I am not clear if the structuring is fair to the consumer. I hope that the answers to the 4 questions will shed some l light. You may be able to make a better decision, after you got these facts.
Let me wish you all the best for 2007.
Wednesday, January 03, 2007
Questions about Financial Products
Did you invest in a financial product, such as a structured deposit, unit trust or insurance product, that is not working well for you?
You can enter the details here. I will try to give my views about the product.
Questions for Mr Tan.
Tan Kin Lian
You can enter the details here. I will try to give my views about the product.
Questions for Mr Tan.
Tan Kin Lian
Tuesday, January 02, 2007
Will my savings be safe after you leave?
Dear Mr Tan Kin Lian,
In 2005, I put in $111,000 in Flexi Link. I convinced my husband to put his savings in NTUC INCOME - Flexi-Cash. The first amount was $120,000, then subsequently another $124,000, in total $351,000.
The news of your ending your career at NTUC INCOME was a shock to me - quite upsetting in fact. What was your reason for resigning, was it a good reason?
Mr Tan, I have not met you but i feel that you are a man of integrity and foresight.
NTUC INCOME has done extremely well under your leadership. Would you advise me will our money be safe under both Flexilink and Flexicash? Can NTUC Income ensure safe returns in 10 years time?
Both my husband and I are 58 years old and these are our life-savings. Thank you.
CA
----------------
Dear CA
Thank you for your kind words.
NTUC Income will continue to be well managed after I leave. I will be keeping most of my personal savings with NTUC Income in the Flexi-link plan, invested in the various funds. I am 58 years old. My family will also be keeping their savings with NTUC Income.
You can read about my future plans in my personal website, www.tankinlian.com. I intend to work in Middle East and Indonesia to help my partners to develop their insurance business.
I wish you and your family all the best in health and happiness.
Tan Kin Lian
In 2005, I put in $111,000 in Flexi Link. I convinced my husband to put his savings in NTUC INCOME - Flexi-Cash. The first amount was $120,000, then subsequently another $124,000, in total $351,000.
The news of your ending your career at NTUC INCOME was a shock to me - quite upsetting in fact. What was your reason for resigning, was it a good reason?
Mr Tan, I have not met you but i feel that you are a man of integrity and foresight.
NTUC INCOME has done extremely well under your leadership. Would you advise me will our money be safe under both Flexilink and Flexicash? Can NTUC Income ensure safe returns in 10 years time?
Both my husband and I are 58 years old and these are our life-savings. Thank you.
CA
----------------
Dear CA
Thank you for your kind words.
NTUC Income will continue to be well managed after I leave. I will be keeping most of my personal savings with NTUC Income in the Flexi-link plan, invested in the various funds. I am 58 years old. My family will also be keeping their savings with NTUC Income.
You can read about my future plans in my personal website, www.tankinlian.com. I intend to work in Middle East and Indonesia to help my partners to develop their insurance business.
I wish you and your family all the best in health and happiness.
Tan Kin Lian
What is permanent and total disability?
Hi Mr Tan,
I came across your blog while surfing and read through some of your postings. I am grateful that though being the CEO, you have not been baised on your comments.
I wish to seek your clarification on this clause.
"Totally and Permanently Disabled" means the complete and continuous inability of the Life Assured at that time and at all times thereafter to engage in any business or occupation or perform any work of any kind for remuneration or profit.
The total and irrecoverable loss of sight of both eyes or the loss by complete severance of both limbs at or above the wrist or ankle or the total and irrecoverable loss of sight of 1 eye and the loss by complete severance of 1 limb at or above the wrist or ankle will also be regarded as constituting Total and Permanent
Disability"
If a person has no control over both limbs but choose not to amputate them, can it be regarded as constituting Total and Permanent Disability?
C
-----------------
Dear C
If it can be medically proven that the life assured cannot use two limbs totally and permanently, then it should qualify as a total disability claim. Perhaps the difficulty is to establish this fact, if the limbs are not amputated. Perhaps you can tell me more about the medical condition, and I can ask a doctor for his opinion.
-----------------
Hi Mr Tan,
The reason I'm asking that specific clause is because an agent claims that his company does not require the life assured to amputate the limbs in order to claim for total disability whereas other companies including Income required the limbs to be
amputated and must be at or above the wrist or ankle as specified in the clause.
-------------------
Dear C
Although the clause states that amputation is one condition of proof of total disability, there is also another condition and that is the inability to carry out any occupation. If two limbs are totally useless, it is easy to prove the inability to perform any occupation.
Anyway, it is NTUC Income's policy to interpret the clause fairly. I am sure that they will not insist on imputation under the circumstances that you have describe.
It is important for you to buy a product that gives you better value. Do not be swayed by minor differences such as this type of condition, which affect maybe 1 in a million people.
I came across your blog while surfing and read through some of your postings. I am grateful that though being the CEO, you have not been baised on your comments.
I wish to seek your clarification on this clause.
"Totally and Permanently Disabled" means the complete and continuous inability of the Life Assured at that time and at all times thereafter to engage in any business or occupation or perform any work of any kind for remuneration or profit.
The total and irrecoverable loss of sight of both eyes or the loss by complete severance of both limbs at or above the wrist or ankle or the total and irrecoverable loss of sight of 1 eye and the loss by complete severance of 1 limb at or above the wrist or ankle will also be regarded as constituting Total and Permanent
Disability"
If a person has no control over both limbs but choose not to amputate them, can it be regarded as constituting Total and Permanent Disability?
C
-----------------
Dear C
If it can be medically proven that the life assured cannot use two limbs totally and permanently, then it should qualify as a total disability claim. Perhaps the difficulty is to establish this fact, if the limbs are not amputated. Perhaps you can tell me more about the medical condition, and I can ask a doctor for his opinion.
-----------------
Hi Mr Tan,
The reason I'm asking that specific clause is because an agent claims that his company does not require the life assured to amputate the limbs in order to claim for total disability whereas other companies including Income required the limbs to be
amputated and must be at or above the wrist or ankle as specified in the clause.
-------------------
Dear C
Although the clause states that amputation is one condition of proof of total disability, there is also another condition and that is the inability to carry out any occupation. If two limbs are totally useless, it is easy to prove the inability to perform any occupation.
Anyway, it is NTUC Income's policy to interpret the clause fairly. I am sure that they will not insist on imputation under the circumstances that you have describe.
It is important for you to buy a product that gives you better value. Do not be swayed by minor differences such as this type of condition, which affect maybe 1 in a million people.
Best wishes for 2007
I send best wishes for 2007, to all readers of my blog. Best wishes for your good health and success.
Tan Kin Lian
Tan Kin Lian
Free lance programming in PHP, MySQL
I am looking for free lance programmers who are able to develop software in PHP and MySQL.
Please send your e-mail address to me at kinlian@gmail.com.
Please send your e-mail address to me at kinlian@gmail.com.
Friday, December 29, 2006
Lost & Found
The Land Transport Authority not operate a "lost and found" service for items that are lost in public transport vehicles.
According to a newspaper report, the Authority has recently decided to ask the major bus and taxi companies to operate their own "lost and found" service. The Authority will continue to provide this service for the small independent operators.
In my opinion, there is advantage for a centralised service. It can be operated more efficiently and achieve a more consistent standard of customer service. It is more convenient for the public.
If the Authority does not wish to handle this matter, they can call a tender for it to be operated by a private operator.
According to a newspaper report, the Authority has recently decided to ask the major bus and taxi companies to operate their own "lost and found" service. The Authority will continue to provide this service for the small independent operators.
In my opinion, there is advantage for a centralised service. It can be operated more efficiently and achieve a more consistent standard of customer service. It is more convenient for the public.
If the Authority does not wish to handle this matter, they can call a tender for it to be operated by a private operator.
Long German word
Note: Edited with assistance from Peer Mitze.
The German language has a way of joining many words together to form a long word. Here is an example of how long it can be. There is no actual word that appears in this way, but it is theoretically possible
DONAUDAMPFSCHIFFFAHRTSGESELLSCHAFTSAKTIONAERSVERSAMMLUNG
Individual words: DONAU DAMPFSCHIFFFAHRTS GESELLSCHAFTS AKTIONAERS VERSAMMLUNG
Translation: Donau steamship company shareholder general meeting
EISENBAHNGLEISZWISCHENRAUMREINIGUNGSBEAMTER
Individual words: EISENBAHN GLEIS ZWISCHENRAUM REINIGUNGS BEAMTER
Translation: Railway track gap cleaning officer
KOMMUNIKATIONSTECHNOLOGIEZENTRUM
Individual words: KOMMUNIKATIONS TECHNOLOGIE ZENTRUM
Communication Technology Center
Enjoy.
The German language has a way of joining many words together to form a long word. Here is an example of how long it can be. There is no actual word that appears in this way, but it is theoretically possible
DONAUDAMPFSCHIFFFAHRTSGESELLSCHAFTSAKTIONAERSVERSAMMLUNG
Individual words: DONAU DAMPFSCHIFFFAHRTS GESELLSCHAFTS AKTIONAERS VERSAMMLUNG
Translation: Donau steamship company shareholder general meeting
EISENBAHNGLEISZWISCHENRAUMREINIGUNGSBEAMTER
Individual words: EISENBAHN GLEIS ZWISCHENRAUM REINIGUNGS BEAMTER
Translation: Railway track gap cleaning officer
KOMMUNIKATIONSTECHNOLOGIEZENTRUM
Individual words: KOMMUNIKATIONS TECHNOLOGIE ZENTRUM
Communication Technology Center
Enjoy.
Join a car pool
NTUC Income is operating a service to help people to car pool. It is found in the Big Trumpet website, Big Trumpet
This will benefit two groups of people:
* the commuters can enjoy a more comfortable ride in a car
* the car owner can receive a contribution towards the cost of maintaining the car
It will also benefit the public transport system. When more people car pool, there is less rush in the MRT and bus.
This will benefit two groups of people:
* the commuters can enjoy a more comfortable ride in a car
* the car owner can receive a contribution towards the cost of maintaining the car
It will also benefit the public transport system. When more people car pool, there is less rush in the MRT and bus.
Article in Lianhe Wanbao
Translated from Lianhe Wanbao, December 2007
NTUC Income's CEO Mr Tan Kin Lian
Had Secondary 4 education, did self-study for Actuarial qualification
40 years ago, when NTUC Income's CEO Mr Tan Kin Lian was fresh out of school, he had only a secondary four certification. While he worked, he did some self-study. After 9 years, at the age of 27, he received his Actuarial professional qualification.
During that time only 2 people who self-studied received the actuarial certification, and Mr Tan is one of them. After that, those who want to get this professional certificate had to go to the university as no one was allowed to do self-study.
During those 9 years, Mr Tan worked in an insurance company and did various positions for instance as a programmer, an actuarial consultant and worked in management level. “Because of my work experience, I’m a more practical actuarial compare to a fresh graduate,” he said.
As an Actuary, his duty is based on economics theory and had to analyse, evaluate and manage future unknown risk. “I’m good in mathematics, statistics and finance. I need to about 2 months to prepare for an exam. This is enough. I don't have much time for a social life but I don't mind,” mentioned Mr Tan.
Mr Tan is stepping down from NTUC Income on 1st April 2007, after 30 years of service. He is the third local CEO to step down since June this year, after SingTel's and NOL’s CEOs.
Mr Tan, aged 58, said that he would continue working up to 70 years old. He plans to set up an insurance company that offers high quality and low-cost insurance, using high technology and commercial strategy, to increase an organisation's performance.
Mr Tan Kin Lian writes daily in his blog. The information in his blog is transparent and has an open approach.
On one occasion he was approached by an union official who addressed him as “smiling tiger”. He said this may sound embarrassing but he can felt that the party did not mean anything negative.
Mr Tan also shared a light moment he had. On the day the newspapers published the news of his resignation along with his photos, Mr Tan was flying. The steward asked," Excuse me, sir. Are you the person on the front page of the papers?"
After the announcement was made about him stepping down, his personal blog had hits up to 1,100. This is a four-fold increase. His personal blog is www.tankinlian.blogspot.com.
His most satisfied investment is a $300,000 investment in a computer system
For the past 30 years, Mr Tan had to make a lot of decisions. His decision to invest $300,000 for a computer system proof that he makes the right decision. The computer system's efficiency reduced operating expenses, improved the service quality and helped insurance agents to sell new products. “Because I was a programmer, it helped me to follow through this strategy. For the next 10 years, NTUC Income will enjoy speedy growth because of this system.”
What types of insurance does Mr Tan invests in?
As a CEO of an insurance cooperative, what are the types of insurance does he invests in?
Mr Tan mentioned that, when his children were young he took up term and life insurance. The sum assured is 5 times his annual salary. He took up a living policy for his wife, and also for his 3 children. He has comprehensive coverage for accident, medical and education.
Mr Tan also invests in ILP products for his retirement. His investments are all large, well-diversified and in low-cost plans. His returns for the past few years, is more than 10 per cent.
“For the next 10 to 20 years, I projected the returns to be around 5 to 6 per cent. I think it is a suitable investment for everyone,” said Mr Tan.
Mr Tan has two daughters and one son. His elder daughter is married to a Russian.
NTUC Income's CEO Mr Tan Kin Lian
Had Secondary 4 education, did self-study for Actuarial qualification
40 years ago, when NTUC Income's CEO Mr Tan Kin Lian was fresh out of school, he had only a secondary four certification. While he worked, he did some self-study. After 9 years, at the age of 27, he received his Actuarial professional qualification.
During that time only 2 people who self-studied received the actuarial certification, and Mr Tan is one of them. After that, those who want to get this professional certificate had to go to the university as no one was allowed to do self-study.
During those 9 years, Mr Tan worked in an insurance company and did various positions for instance as a programmer, an actuarial consultant and worked in management level. “Because of my work experience, I’m a more practical actuarial compare to a fresh graduate,” he said.
As an Actuary, his duty is based on economics theory and had to analyse, evaluate and manage future unknown risk. “I’m good in mathematics, statistics and finance. I need to about 2 months to prepare for an exam. This is enough. I don't have much time for a social life but I don't mind,” mentioned Mr Tan.
Mr Tan is stepping down from NTUC Income on 1st April 2007, after 30 years of service. He is the third local CEO to step down since June this year, after SingTel's and NOL’s CEOs.
Mr Tan, aged 58, said that he would continue working up to 70 years old. He plans to set up an insurance company that offers high quality and low-cost insurance, using high technology and commercial strategy, to increase an organisation's performance.
Mr Tan Kin Lian writes daily in his blog. The information in his blog is transparent and has an open approach.
On one occasion he was approached by an union official who addressed him as “smiling tiger”. He said this may sound embarrassing but he can felt that the party did not mean anything negative.
Mr Tan also shared a light moment he had. On the day the newspapers published the news of his resignation along with his photos, Mr Tan was flying. The steward asked," Excuse me, sir. Are you the person on the front page of the papers?"
After the announcement was made about him stepping down, his personal blog had hits up to 1,100. This is a four-fold increase. His personal blog is www.tankinlian.blogspot.com.
His most satisfied investment is a $300,000 investment in a computer system
For the past 30 years, Mr Tan had to make a lot of decisions. His decision to invest $300,000 for a computer system proof that he makes the right decision. The computer system's efficiency reduced operating expenses, improved the service quality and helped insurance agents to sell new products. “Because I was a programmer, it helped me to follow through this strategy. For the next 10 years, NTUC Income will enjoy speedy growth because of this system.”
What types of insurance does Mr Tan invests in?
As a CEO of an insurance cooperative, what are the types of insurance does he invests in?
Mr Tan mentioned that, when his children were young he took up term and life insurance. The sum assured is 5 times his annual salary. He took up a living policy for his wife, and also for his 3 children. He has comprehensive coverage for accident, medical and education.
Mr Tan also invests in ILP products for his retirement. His investments are all large, well-diversified and in low-cost plans. His returns for the past few years, is more than 10 per cent.
“For the next 10 to 20 years, I projected the returns to be around 5 to 6 per cent. I think it is a suitable investment for everyone,” said Mr Tan.
Mr Tan has two daughters and one son. His elder daughter is married to a Russian.
Advice on Land Banking?
Dear Mr Tan,
I noted that you have diversify your investments and wonder if you have the opportunity to look at "Land Banking" offerings from overseas institutions (registered in Singapore) like Walton International Group ?
My understanding is that the returns will double in five years time.
Can you advise ?
PL
------------------
Dear PL
I tend to be sceptical of these types of schemes. Do you have any positive experience with this product?
Tan Kin Lian
--------------------
Mr Tan,
So far, I have started on this investment for about a year and have not realised
any returns as yet. Only assurance is that the title deed for the land purchased registered with the local government.
I noted that you have diversify your investments and wonder if you have the opportunity to look at "Land Banking" offerings from overseas institutions (registered in Singapore) like Walton International Group ?
My understanding is that the returns will double in five years time.
Can you advise ?
PL
------------------
Dear PL
I tend to be sceptical of these types of schemes. Do you have any positive experience with this product?
Tan Kin Lian
--------------------
Mr Tan,
So far, I have started on this investment for about a year and have not realised
any returns as yet. Only assurance is that the title deed for the land purchased registered with the local government.
Am I buying the right financial product?
Mr. Tan,
Although I've working in the public sector for the past 13 years, is still a lay person who knows very little when it comes to investment.
Recently was introduced to a wealth consultant from X by a very close friend and have invested our (wife & I) OA & SA from CPF in equities, bonds & trusts. We are still quite blur on their performance since then.
I would like to seek your expert advise on:
a) Are we investing in the right products?
b) How can we monitor the performances of these products?
On top of these, we have been both holding whole life policies from NTUC & ManuLife and also a term rider (NTUC) to cover my housing plan and our only child has yet to have any plan at her age of 8.
a) How much coverage is sufficient at my age of 36 & my wife (33)?
b) After hearing from my adviser from X that there isn't any priority to purchase any educational plan for our daughter, what's your advise? &
c) Last but not least, how to improve my level of understanding with regards to the funds, equities, bonds and otyher instruments of investment in our local context?
Your blog is definitely one of them....!
TYG
--------------------
Dear TYG
You should ask the wealth consultant from X to give you an update of your investment. It is his or her responsibility.
You can ask the following questions:
- what is the returned earned by the fund that you have invested in, compared to benchmark
- how much does the fund charge as initial and annual fees?
You can read the FAQ in our website on our Flexi-link plan and Combined Fund an our Ideal plan for a child. It can be easily accessed from www.income.coop/faq.
http://www.income.coop/insurance/flexilink/faq-FlexiLink.asp
http://www.income.coop/insurance/combinedfunds/faq.asp
http://www.income.coop/insurance/ideal/faq-4child.asp
You can also call my salaried consultant at our business center, 6788 1111. They do not earn any commission.
You can switch your investment to our combined fund. My consultant will advise you on whether it is better for you stay with your current investment or make a switch, considering charges and other relevant matters.
I usually recommend a person to have life insurance for 5 to 10 years of the earnings. You can buy an i-Term to provide the cover. The premium is quite low.
http://www.income.coop/insurance/term/faq.asp
You can learn more about insurance and financial matters from this website:
www.knowyourinsurance.com.sg
Best wishes for 2007.
Tan Kin Lian
Although I've working in the public sector for the past 13 years, is still a lay person who knows very little when it comes to investment.
Recently was introduced to a wealth consultant from X by a very close friend and have invested our (wife & I) OA & SA from CPF in equities, bonds & trusts. We are still quite blur on their performance since then.
I would like to seek your expert advise on:
a) Are we investing in the right products?
b) How can we monitor the performances of these products?
On top of these, we have been both holding whole life policies from NTUC & ManuLife and also a term rider (NTUC) to cover my housing plan and our only child has yet to have any plan at her age of 8.
a) How much coverage is sufficient at my age of 36 & my wife (33)?
b) After hearing from my adviser from X that there isn't any priority to purchase any educational plan for our daughter, what's your advise? &
c) Last but not least, how to improve my level of understanding with regards to the funds, equities, bonds and otyher instruments of investment in our local context?
Your blog is definitely one of them....!
TYG
--------------------
Dear TYG
You should ask the wealth consultant from X to give you an update of your investment. It is his or her responsibility.
You can ask the following questions:
- what is the returned earned by the fund that you have invested in, compared to benchmark
- how much does the fund charge as initial and annual fees?
You can read the FAQ in our website on our Flexi-link plan and Combined Fund an our Ideal plan for a child. It can be easily accessed from www.income.coop/faq.
http://www.income.coop/insurance/flexilink/faq-FlexiLink.asp
http://www.income.coop/insurance/combinedfunds/faq.asp
http://www.income.coop/insurance/ideal/faq-4child.asp
You can also call my salaried consultant at our business center, 6788 1111. They do not earn any commission.
You can switch your investment to our combined fund. My consultant will advise you on whether it is better for you stay with your current investment or make a switch, considering charges and other relevant matters.
I usually recommend a person to have life insurance for 5 to 10 years of the earnings. You can buy an i-Term to provide the cover. The premium is quite low.
http://www.income.coop/insurance/term/faq.asp
You can learn more about insurance and financial matters from this website:
www.knowyourinsurance.com.sg
Best wishes for 2007.
Tan Kin Lian
Thursday, December 28, 2006
How should CEO's pay be determined?
BUSINESS TIMES
Question:
Mr Tan,
Sometimes, directors' fee/ management compensation stir up debates /draw criticisms from investing public. Some may hold the view that, CEO / senior management's compensation package should be calculated based on the success/ failure of the strategy implemented by the management . However, most of the time, company strategy has long term implications and thus it is hard to measure the success of such strategy in the short term.
In your view, how should a CEO's pay be determined? "
Journalist
----------------------
My reply:
The leader of any organisation, whether it is a business, social organisation or the government, should be prepared to place the interest of other people, including the customers and colleagues, above their personal interest. This gives them the moral authority to lead the organisation.
Any great organisation will take many years to build up. It is not a short term effort The success of the organisation is not the work of the leader alone. He or she needs the whole-hearted support of other people who share the same visision, including the colleagues, customers and external partners.
The leader should be adequately compensated, but it should not be done in a disportionate way. It is wrong to emphasise on short term rewards, based on stock options and shareholder value as determined by the stock market. This has led to many corporate scandals, including the use of accounting tricks to boost up short term profits.
I wish to see a return back to fundamental business ethics. Business leaders should make the effort to build a strong business that creates value to all stakehhlders over the long run. Everybody should be fairly and adequately rewarded.
Question:
Mr Tan,
Sometimes, directors' fee/ management compensation stir up debates /draw criticisms from investing public. Some may hold the view that, CEO / senior management's compensation package should be calculated based on the success/ failure of the strategy implemented by the management . However, most of the time, company strategy has long term implications and thus it is hard to measure the success of such strategy in the short term.
In your view, how should a CEO's pay be determined? "
Journalist
----------------------
My reply:
The leader of any organisation, whether it is a business, social organisation or the government, should be prepared to place the interest of other people, including the customers and colleagues, above their personal interest. This gives them the moral authority to lead the organisation.
Any great organisation will take many years to build up. It is not a short term effort The success of the organisation is not the work of the leader alone. He or she needs the whole-hearted support of other people who share the same visision, including the colleagues, customers and external partners.
The leader should be adequately compensated, but it should not be done in a disportionate way. It is wrong to emphasise on short term rewards, based on stock options and shareholder value as determined by the stock market. This has led to many corporate scandals, including the use of accounting tricks to boost up short term profits.
I wish to see a return back to fundamental business ethics. Business leaders should make the effort to build a strong business that creates value to all stakehhlders over the long run. Everybody should be fairly and adequately rewarded.
Consider issuing one security device for online banking
Editor
TODAY
I refer to the letters "Bank on safety and convenience" (Dec 27).
I use Internet banking. My bank recently sent me a security device. I had a lot of trouble registering it.
Those troubles are over, but now I have another problem: As I do not use it often, the device tends to be misplaced.
I imagine that, later, other banks and financial firms will also send me their security devices. It must be very inconvenient to carry them around, or to keep so many of them in my home or office.
I suggest that the Monetary Authority of Singapore encourage the financial firms to use a common security device, so that each customer need only keep one. This device should be registered with an independent party, and can be used by all financial firms.
If the customer is required to keep only one device, which can be used for multiple purposes, it is likely to be more convenient and practical.
Tan Kin Lian
TODAY
I refer to the letters "Bank on safety and convenience" (Dec 27).
I use Internet banking. My bank recently sent me a security device. I had a lot of trouble registering it.
Those troubles are over, but now I have another problem: As I do not use it often, the device tends to be misplaced.
I imagine that, later, other banks and financial firms will also send me their security devices. It must be very inconvenient to carry them around, or to keep so many of them in my home or office.
I suggest that the Monetary Authority of Singapore encourage the financial firms to use a common security device, so that each customer need only keep one. This device should be registered with an independent party, and can be used by all financial firms.
If the customer is required to keep only one device, which can be used for multiple purposes, it is likely to be more convenient and practical.
Tan Kin Lian
Tuesday, December 26, 2006
Financial planning for a young person
Dear Mr Tan
I wish to seek your advice as to how to help my son with his financial planning. He has just started work.
At the moment, he has 2 NTUC policies (endowment and Living). One of them is paid by him and an IL Insurance Policy with Prudential he bought a few months ago (from his classmate) before I stumbled on your website .
What other areas can he put his money to create wealth. He does not know anything about stocks and shares.
LC
--------------
Dear LC
I suggest that your son should invest in our Ideal plan (instead of the Prudential IL policy). I think that their charges amount to 16 months of premium, compared to 7 months under our Ideal plan.
You can read about our Ideal plan here:
Ideal
And the comparison of charges can be found at:
Charges
If your son wish to make a switch, I will ask my business center manager to offer a reduced front end charge, to compensate what what he has already incurred with the Prudential plan.
I wish to seek your advice as to how to help my son with his financial planning. He has just started work.
At the moment, he has 2 NTUC policies (endowment and Living). One of them is paid by him and an IL Insurance Policy with Prudential he bought a few months ago (from his classmate) before I stumbled on your website .
What other areas can he put his money to create wealth. He does not know anything about stocks and shares.
LC
--------------
Dear LC
I suggest that your son should invest in our Ideal plan (instead of the Prudential IL policy). I think that their charges amount to 16 months of premium, compared to 7 months under our Ideal plan.
You can read about our Ideal plan here:
Ideal
And the comparison of charges can be found at:
Charges
If your son wish to make a switch, I will ask my business center manager to offer a reduced front end charge, to compensate what what he has already incurred with the Prudential plan.
.NET Programming
I wish to look for free lance programmers who are able to do developing on .NET. If you are interested, send a reply to me at kinlian@gmail.com.
Monday, December 25, 2006
Use Skype Out
I registered for a Skype Out account. It allows me to call anyone (on their mobilephone or fixed line) from my PC.
I only pay the local call charges to Skype.
The quality of the call is good. As I am making the call, it is quite easy for me to go to the PC to do it. The other party receives the call on their mobilephone or telephone, in the usual way.
I encourage people to learn how to use Skype Out. It can save a lot of money on overseas calls.
I only pay the local call charges to Skype.
The quality of the call is good. As I am making the call, it is quite easy for me to go to the PC to do it. The other party receives the call on their mobilephone or telephone, in the usual way.
I encourage people to learn how to use Skype Out. It can save a lot of money on overseas calls.
Know Your Insurance
If you know about the insurance products, you can make the right choice and save a lot of money.
You can learn about the product in a fun way at this website: Know Your Insurance
You can do a simple test to check your understanding. It is interesting and fun.
The most popular products viewed by more than 1,500 visitors are:
Investment Linked Plan
Medical Insurance
Motor Insurance
i-Young
Manage Your Money
Life Annuity
Saving for Education
Invest Your CPF
You can learn about the product in a fun way at this website: Know Your Insurance
You can do a simple test to check your understanding. It is interesting and fun.
The most popular products viewed by more than 1,500 visitors are:
Investment Linked Plan
Medical Insurance
Motor Insurance
i-Young
Manage Your Money
Life Annuity
Saving for Education
Invest Your CPF
Sunday, December 24, 2006
STI Tracker Fund
I just read the report of the STI Tracker Fund, managed by StateStreets. I am quite impressed with their results.
The fund started in April 2002. During the past 50 months, it earned an average annual return of 11.6%, compared to a benchmark return of 7.9%.
During the latest 12 months to 30 June 2006, it earned 13.4%, compared to the benchmark of 10.1%. I have since checked with StateStreet. They confirmed that the ST Index does not include dividend.
So, the better performance of the fund is largely due to the dividend, which is close to 3% per annum. After taking this into account, the return from the ST Tracker Fund is almost the same as the market. The annual cost of this fund is only 0.3%.
I had invested in the STI Tracker Fund previously. It earned a magnificent return. I realised my investment, as the market is too high. I shall wait for another time to re-invest in this fund.
The fund started in April 2002. During the past 50 months, it earned an average annual return of 11.6%, compared to a benchmark return of 7.9%.
During the latest 12 months to 30 June 2006, it earned 13.4%, compared to the benchmark of 10.1%. I have since checked with StateStreet. They confirmed that the ST Index does not include dividend.
So, the better performance of the fund is largely due to the dividend, which is close to 3% per annum. After taking this into account, the return from the ST Tracker Fund is almost the same as the market. The annual cost of this fund is only 0.3%.
I had invested in the STI Tracker Fund previously. It earned a magnificent return. I realised my investment, as the market is too high. I shall wait for another time to re-invest in this fund.
Is it time to move out of the stock market?
Dear Mr Tan,
My family and I have invested $130,000 in Growth and Balanced fund managed by Income for the past two years. The average returns is about 20%. In view of the record high of stock market achieved in the world, there is potential correction in the near future.
To preserve our investment, we intend to continue the investment with Income instead of surrender the policy. Please advice me should I switch to conservative fund or any recommendation from you.
EE
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Dear EE
In my case, I have decided to stay largely invested in the Growth Fund. It has 30% invested in bonds, so it is not so risky.
In the case of the Balanced Fund, it is 50% invested in bonds, which is less risky.
If you feel uncomfortable about the level of the stockmarket, you can switch to the Conservative Fund (which has 70% invested in bonds). You can switch back to the Growth Fund at a later date.
Two months ago, I sold by ST Tracker Fund and re-invested in the Money Money Fund. This fund earns an interest rate of between 3% to 3.5% per annum. Since then, the ST Tracker has moved up further. So, one can never find the right time.
Tan Kin Lian
My family and I have invested $130,000 in Growth and Balanced fund managed by Income for the past two years. The average returns is about 20%. In view of the record high of stock market achieved in the world, there is potential correction in the near future.
To preserve our investment, we intend to continue the investment with Income instead of surrender the policy. Please advice me should I switch to conservative fund or any recommendation from you.
EE
------------
Dear EE
In my case, I have decided to stay largely invested in the Growth Fund. It has 30% invested in bonds, so it is not so risky.
In the case of the Balanced Fund, it is 50% invested in bonds, which is less risky.
If you feel uncomfortable about the level of the stockmarket, you can switch to the Conservative Fund (which has 70% invested in bonds). You can switch back to the Growth Fund at a later date.
Two months ago, I sold by ST Tracker Fund and re-invested in the Money Money Fund. This fund earns an interest rate of between 3% to 3.5% per annum. Since then, the ST Tracker has moved up further. So, one can never find the right time.
Tan Kin Lian
Secure Banking
I used internet banking. My bank recently sent a security device to me. I had a lot of trouble with the registration of the device. This is now over.
Now, I have problem in keeping this device. As I do not use it often, it tends to be misplaced.
Later, I imagine that other banks and financial firms will send their security device to me. It must be very troublesome to keep so many devices in my home, and my office.
I suggest that the Monetary Authority of Singapore encourage the financial firms to use a common device, so that each customer need only to keep one security device (like one NRIC). This device should be registered with an independent party, and can be used by all financial firms.
If the customer is required to keep only one device, which can be used for multiple purpose, it is likely to be more convenient and practical.
Now, I have problem in keeping this device. As I do not use it often, it tends to be misplaced.
Later, I imagine that other banks and financial firms will send their security device to me. It must be very troublesome to keep so many devices in my home, and my office.
I suggest that the Monetary Authority of Singapore encourage the financial firms to use a common device, so that each customer need only to keep one security device (like one NRIC). This device should be registered with an independent party, and can be used by all financial firms.
If the customer is required to keep only one device, which can be used for multiple purpose, it is likely to be more convenient and practical.
Customer is convinced with Enhanced Incomeshield
Dear Mr Tan,
What is your view on the following comments on one of H&S plan, which seems likely to be NTUC product.
One particular famous hospital & surgical plan requires the insured to call the insurer 4 days prior to admission for non-emergency cases.
Reason? To seek the insurer permission in admission. This means the insurer can dispute the reason for admission. In the policy contract itself, it is clearly stated that any dispute will be referred to a 3rd party for mediation. Come on, a sick person cannot go for mediation and family members main priority is to get the person's condition treated. I feel that this is a joke.
Unfortunately, this is no laughing matter. Can anyone imagine the implication of a potential dispute? What happens if the insured's health deteriorates as the result of the dispute? What happens if he dies? Will the insurer be held liable? Will the adviser be liable because he was the party who had help transacted the purchase of the policy? To me this is a useless insurance. A good insurance is one that gives you the peace of mind.
On the day when you need it, it helps you. A useless insurance is one that give you no peace of mind. On the day when you need it, it can bite you and tell you to go for mediation to settle the dispute.
AP
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Dear AP
The plan that you described is our Enhanced Incomeshield plan. You can find the details of this plan, including the 4 day advanced notice, covered in this FAQ. This requirement will be exercised fairly and in the interest of the policyholder. The main aim is to prevent over charging by the doctor, with the collaboration of the policyholder.
More details are in:
http://www.income.coop/insurance/enhancedshield/faq.asp
---------------------------
Hi Mr Tan,
Thanks for the info and your patience. Just signed up Preferred Incomeshield plan and riders for my wife and myself. Also bought a i-gift plan for my SRS.
Merry Xmas and Happy New Year.
AP
What is your view on the following comments on one of H&S plan, which seems likely to be NTUC product.
One particular famous hospital & surgical plan requires the insured to call the insurer 4 days prior to admission for non-emergency cases.
Reason? To seek the insurer permission in admission. This means the insurer can dispute the reason for admission. In the policy contract itself, it is clearly stated that any dispute will be referred to a 3rd party for mediation. Come on, a sick person cannot go for mediation and family members main priority is to get the person's condition treated. I feel that this is a joke.
Unfortunately, this is no laughing matter. Can anyone imagine the implication of a potential dispute? What happens if the insured's health deteriorates as the result of the dispute? What happens if he dies? Will the insurer be held liable? Will the adviser be liable because he was the party who had help transacted the purchase of the policy? To me this is a useless insurance. A good insurance is one that gives you the peace of mind.
On the day when you need it, it helps you. A useless insurance is one that give you no peace of mind. On the day when you need it, it can bite you and tell you to go for mediation to settle the dispute.
AP
--------------------
Dear AP
The plan that you described is our Enhanced Incomeshield plan. You can find the details of this plan, including the 4 day advanced notice, covered in this FAQ. This requirement will be exercised fairly and in the interest of the policyholder. The main aim is to prevent over charging by the doctor, with the collaboration of the policyholder.
More details are in:
http://www.income.coop/insurance/enhancedshield/faq.asp
---------------------------
Hi Mr Tan,
Thanks for the info and your patience. Just signed up Preferred Incomeshield plan and riders for my wife and myself. Also bought a i-gift plan for my SRS.
Merry Xmas and Happy New Year.
AP
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