The government recently approved granting of reverse mortgage on HDB flats. We received about 250 enquiries during the first few days.
We have since approved 3 reverse mortgage loans on HDB flats. All applicants are above 70 years old (condition set by NTUC Income). The names given below are not the real name.
CASE #1
Mr & Mrs Chan have no dependents. Their 3-room HDB Flat is situated at Marine Parade with a current market valuation of $240k. There is no outstanding loan on the
flat.
We have approved a monthly advance of $300 over 16 years at a modest loan to valuation ratio of 40%. We may eventually extend to a monthly advance of $540 (within acceptable loan to valuation ratio of 70%), pending borrower's decision.
CASE #2
Mr & Mrs Cheong have no dependents. Their 3-room HDB Flat (23 yrs old) is situated at Jurong East with a current market valuation of $160k. There is no outstanding loan on the flat.
We have approved a monthly advance of $295 over 18 years at maximum loan to
valuation ratio of 70%.
CASE #3
Mr Teo is currently staying with his wife. He is receiving some allowances from his 3 children. His 4-room HDB Flat (18 yrs old) is situated at Simei with a current market valuation of $250k. There is no outstanding loan on the flat.
At his request, we have approved a monthly advance of $400 over 12 years at
a modest loan to valuation ratio of 34%. He has intention to either sell
or downgrade the flat again (previously downgraded fr 5-room) at the end of
the loan period.
Saturday, March 25, 2006
Friday, March 24, 2006
Special features of loans from NTUC Income
NTUC Income plans to offer loans with the following special features:
- competitive rates
- fixed rates for first 3 or 5 years
- repayment start after one year
- lower rates for "preferred" policyholders
- deferment of installments due to loss of employment
- rebate on prompt payment of installments
We hope that our loans will be more suited to our policyholders.
- competitive rates
- fixed rates for first 3 or 5 years
- repayment start after one year
- lower rates for "preferred" policyholders
- deferment of installments due to loss of employment
- rebate on prompt payment of installments
We hope that our loans will be more suited to our policyholders.
Payment of death claims under DPS
24 March 2006
Editor
Forum Page
Straits Times
I refer to the article by Lorna Tan entitled "Key difference in two DPS options not highlighted: Case" (Straits Times, 23 March 2006)
The article highlighted some concern about how the benefit under the Dependent Protection Scheme that is insured with NTUC Income and Great Eastern will be paid out.
The sum involved is only $46,000 or slightly more. In the event of death and the absence of a nomination or will, the benefit will be paid to the family members (ie spouse, children, parents) according to the Insurance Act. It is usually quite straight forward.
NTUC has paid out 300 DPS claims since being appointed one of the insurer. More than 95% of these claims were paid to the proper claimants according to the Insurance Act, who were either executors of wills for those who have made a will or family members for those without a will. The remaining 5% are paid according to specific
nomination submitted by the policyholder. The nominees are usually family members.
Most policyholders will thus find this arrangement to be suitable.
A policyholder of NTUC Income can submit a specific nomination, if they wish to distribute the proceeds in a different manner. The forms are available on request.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Editor
Forum Page
Straits Times
I refer to the article by Lorna Tan entitled "Key difference in two DPS options not highlighted: Case" (Straits Times, 23 March 2006)
The article highlighted some concern about how the benefit under the Dependent Protection Scheme that is insured with NTUC Income and Great Eastern will be paid out.
The sum involved is only $46,000 or slightly more. In the event of death and the absence of a nomination or will, the benefit will be paid to the family members (ie spouse, children, parents) according to the Insurance Act. It is usually quite straight forward.
NTUC has paid out 300 DPS claims since being appointed one of the insurer. More than 95% of these claims were paid to the proper claimants according to the Insurance Act, who were either executors of wills for those who have made a will or family members for those without a will. The remaining 5% are paid according to specific
nomination submitted by the policyholder. The nominees are usually family members.
Most policyholders will thus find this arrangement to be suitable.
A policyholder of NTUC Income can submit a specific nomination, if they wish to distribute the proceeds in a different manner. The forms are available on request.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Reply: Annuity plans need improvements
24 March 2006
Editor
Zaobao
I refer to the letter, 'Annuity plans need improvements', by Mr Yang Song Jian, (Zaobao, 23 March).
Mr Yang asked insurance companies to improve the annuity plans to better take care of the elderly. More should be done educate Singaporeans on the importance of financial planning and savings.
I agree.
In a recent survey, we found out that 50 percent of the respondents wanted to increase their regular savings for their retirement. They know that their current savings in the Central Provident Fund is inadequate.
As a general guide, each person should set aside 10 to 15 percent of the regular earnings as savings for the future. They can use the savings for their retirement or to meet emergencies, in they lose their jobs or have to pay a large medical bill.
They should invest these savings in a flexible plan that can give an attractive rate of return, by investing for the long term.
NTUC Income offers a choice of attractive annuity plans. We handle 65 percent of all life annuities sold in Singapore. Our annuities offer an attractive return, an annual bonus (in most years) to supplement the guaranteed return, and a refund of the balance of the capital on death.
There are a few ways for the public to learn about financial planning:
- see an insurance adviser;
- attend an educational talk;
- visit an educational website.
NTUC Income holds an educational talk every week. The topics include retirement plans, medical insurance, financial planning, reverse mortgage scheme, etc. Schedule of the talks can be found at www.income.coop/seminar. Admission to these talks is free.
We also manage an educational website at www.KnowYourInsurance.com.sg. It is available in English, Chinese and Malay versions. The website covers a wide range of insurance topics, such as: personal accident, medical insurance, financial planning, travel insurance and saving for education.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Editor
Zaobao
I refer to the letter, 'Annuity plans need improvements', by Mr Yang Song Jian, (Zaobao, 23 March).
Mr Yang asked insurance companies to improve the annuity plans to better take care of the elderly. More should be done educate Singaporeans on the importance of financial planning and savings.
I agree.
In a recent survey, we found out that 50 percent of the respondents wanted to increase their regular savings for their retirement. They know that their current savings in the Central Provident Fund is inadequate.
As a general guide, each person should set aside 10 to 15 percent of the regular earnings as savings for the future. They can use the savings for their retirement or to meet emergencies, in they lose their jobs or have to pay a large medical bill.
They should invest these savings in a flexible plan that can give an attractive rate of return, by investing for the long term.
NTUC Income offers a choice of attractive annuity plans. We handle 65 percent of all life annuities sold in Singapore. Our annuities offer an attractive return, an annual bonus (in most years) to supplement the guaranteed return, and a refund of the balance of the capital on death.
There are a few ways for the public to learn about financial planning:
- see an insurance adviser;
- attend an educational talk;
- visit an educational website.
NTUC Income holds an educational talk every week. The topics include retirement plans, medical insurance, financial planning, reverse mortgage scheme, etc. Schedule of the talks can be found at www.income.coop/seminar. Admission to these talks is free.
We also manage an educational website at www.KnowYourInsurance.com.sg. It is available in English, Chinese and Malay versions. The website covers a wide range of insurance topics, such as: personal accident, medical insurance, financial planning, travel insurance and saving for education.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Tuesday, March 21, 2006
Pensioners lost money on their investments ?
Recently, I saw a news article with this headline. It refers to another country. This can be a frightening prospect.
Here are some suggestions on how to invest your retirement money and not face the same risk:
- invest for the long term
- invest in a professionally managed and well diversified fund
It does not matter that the value of the investments can go up or down. They do not concern you. If you are investing for the long term in equities, you should get a better return compared to bonds.
Based on past record, the average return over 10 or 20 years is likely to be 6% to 9%.
The combined fund from NTUC Income is structured to give a good return, with little risk. In fact, risk can be turned to an advantage.
If are keen to learn more, you can call us to attend an educational talk.
Here are some suggestions on how to invest your retirement money and not face the same risk:
- invest for the long term
- invest in a professionally managed and well diversified fund
It does not matter that the value of the investments can go up or down. They do not concern you. If you are investing for the long term in equities, you should get a better return compared to bonds.
Based on past record, the average return over 10 or 20 years is likely to be 6% to 9%.
The combined fund from NTUC Income is structured to give a good return, with little risk. In fact, risk can be turned to an advantage.
If are keen to learn more, you can call us to attend an educational talk.
Monday, March 20, 2006
Participating or adjustible annuity?
NTUC Income holds a 60% market share in life annuity. Our key product is the participating annuity.
PARTICIPATING ANNUITY
A male annuitant investing $100,000 at age 62 in a immediate life annuity (with no
capital refund) receives $524 per month.
This represents a payout of 6.3% per annum, comparising of a guaranteed return of 2.5% with the balance being a consumption of the capital.
If we earn a net investment return over 2.5%, we will add a bonus to the annuity. We expect an average bonus of 2.5% per annum over the future years, but this is not guaranteed.
If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $446 per month (ie 5.3% p.a).
ADJUSTIBLE ANNUITY
Some annuitants prefer to have a larger payout, instead of an increasing payout.
We are considering to offer an adjustible annuity that comprise of a guaranteed amount of $524 per month, plus an non-guaranteed amount of $136, making a total payment of $660 per month. The annual payout is 7.9%
The non-guaranteed amount may be adjusted up or down, according to our investment return. If the net investment return is 5%, the amount will not be changed. If it is higher, the non-guaratneed amount will be increased. If it is lower, the amount will be reduced. Any adjustment is expected to be in small gradual steps.
The guaranteed amount will always be payable.
We may offer the option of the adjustible annuity, if there is interest in this product.
If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $602 per month (ie 7.2% p.a).
PARTICIPATING ANNUITY
A male annuitant investing $100,000 at age 62 in a immediate life annuity (with no
capital refund) receives $524 per month.
This represents a payout of 6.3% per annum, comparising of a guaranteed return of 2.5% with the balance being a consumption of the capital.
If we earn a net investment return over 2.5%, we will add a bonus to the annuity. We expect an average bonus of 2.5% per annum over the future years, but this is not guaranteed.
If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $446 per month (ie 5.3% p.a).
ADJUSTIBLE ANNUITY
Some annuitants prefer to have a larger payout, instead of an increasing payout.
We are considering to offer an adjustible annuity that comprise of a guaranteed amount of $524 per month, plus an non-guaranteed amount of $136, making a total payment of $660 per month. The annual payout is 7.9%
The non-guaranteed amount may be adjusted up or down, according to our investment return. If the net investment return is 5%, the amount will not be changed. If it is higher, the non-guaratneed amount will be increased. If it is lower, the amount will be reduced. Any adjustment is expected to be in small gradual steps.
The guaranteed amount will always be payable.
We may offer the option of the adjustible annuity, if there is interest in this product.
If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $602 per month (ie 7.2% p.a).
Sunday, March 19, 2006
Why NTUC Income supports Idac
19 March 2006
Editor
Forum Page
Straits Times
I refer to the report entitled "Only 11 insurers left on Idac accident scheme" (St Times, 18 March).
The report covered the reasons why several insurers left the Idac scheme. I wish to tell the other side of the story - why NTUC Income choose to remain in the scheme.
Each day, about 60 of our policyholders and 30 third party claimants reported their accidents to an Idac center.
It is easy for claimants to visit any of 12 Idac centers located in various parts of Singapore. They can get the address by calling 6788 6616.
The accident report and damage assessment is usually completed within 20 minutes. There is no undue delay and hassle.
Most policyholders are willing to leave their vehicles at the Idac center for the repairs to be arranged by us. The repairs are usually completed within five days. If they are covered under our Quality Plus plan, we provide a courtesy car for their use.
We carry out an inspection of the vehicle after the repair, to ensure that the repair is carried out to a satisfactory standard. We also provide six month warranty on the repair.
If the policyholder prefers his regular workshop to repair the vehicle, we offer a cash settlement based on our best estimate of the repair cost. Less than 5% of policyholder choose this option.
We carry out a survey of our policyholders after the repair. We have consistently obtained high scores:
- 98% are satisfied with the service provided by Idac center
- 96% are satisfied with the quality of the repair
We have a small percentage of disputes, usually not involving Idac services. They involve the determination of the party responsible for the accident, potential loss of no-claim discount, and replacement of "wear and tear" parts. We try our best to resolve these disputes.
By using the Idac scheme, we are able to reduce our repair bill by about 15%, representing about 6% of total claims. We pass the saving to our policyholders through lower premium. We are able to offer premium rates that are 10% to 15% lower than the market.
Your report alleged that "Idac was feeding a top insurer early information about cases". This is an unfair statement. I wish to give our perspective.
The Idac scheme allows for immediate reporting of all cases into a centralised computer system. We use this information to contact third party claimants and make direct settlement with them. This helps us to reduce the cost of third party claims. We believe that this information is available to any other insurers, if they choose to use it pro-actively.
Finally, I wish to state that NTUC Income has a sufficient volume of business to start an assessment system on our own. We have decided to support an industry wide scheme, as it is the best way to overcome the inflated repair bills that have troubled the insurance industry in many countries over the past decades.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Editor
Forum Page
Straits Times
I refer to the report entitled "Only 11 insurers left on Idac accident scheme" (St Times, 18 March).
The report covered the reasons why several insurers left the Idac scheme. I wish to tell the other side of the story - why NTUC Income choose to remain in the scheme.
Each day, about 60 of our policyholders and 30 third party claimants reported their accidents to an Idac center.
It is easy for claimants to visit any of 12 Idac centers located in various parts of Singapore. They can get the address by calling 6788 6616.
The accident report and damage assessment is usually completed within 20 minutes. There is no undue delay and hassle.
Most policyholders are willing to leave their vehicles at the Idac center for the repairs to be arranged by us. The repairs are usually completed within five days. If they are covered under our Quality Plus plan, we provide a courtesy car for their use.
We carry out an inspection of the vehicle after the repair, to ensure that the repair is carried out to a satisfactory standard. We also provide six month warranty on the repair.
If the policyholder prefers his regular workshop to repair the vehicle, we offer a cash settlement based on our best estimate of the repair cost. Less than 5% of policyholder choose this option.
We carry out a survey of our policyholders after the repair. We have consistently obtained high scores:
- 98% are satisfied with the service provided by Idac center
- 96% are satisfied with the quality of the repair
We have a small percentage of disputes, usually not involving Idac services. They involve the determination of the party responsible for the accident, potential loss of no-claim discount, and replacement of "wear and tear" parts. We try our best to resolve these disputes.
By using the Idac scheme, we are able to reduce our repair bill by about 15%, representing about 6% of total claims. We pass the saving to our policyholders through lower premium. We are able to offer premium rates that are 10% to 15% lower than the market.
Your report alleged that "Idac was feeding a top insurer early information about cases". This is an unfair statement. I wish to give our perspective.
The Idac scheme allows for immediate reporting of all cases into a centralised computer system. We use this information to contact third party claimants and make direct settlement with them. This helps us to reduce the cost of third party claims. We believe that this information is available to any other insurers, if they choose to use it pro-actively.
Finally, I wish to state that NTUC Income has a sufficient volume of business to start an assessment system on our own. We have decided to support an industry wide scheme, as it is the best way to overcome the inflated repair bills that have troubled the insurance industry in many countries over the past decades.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Friday, March 17, 2006
How to pass your wealth to your children
The baby boomer generation, who are now in their 50s and 60s, benefitted from the economic growth and are generally quite wealthy.
Some of them are thinking of how best to transfer a portion of their wealth to their children.
I suggest that they should make a partial transfer now, when their children are in their 20s. The children need the mney now, rather than 20 years later (when their parents pass away).
NTUC Income will organise seminars to cover will writing, annuity plan, term annuity, trust, estate duty and similar topics.
More details will be announced later.
Some of them are thinking of how best to transfer a portion of their wealth to their children.
I suggest that they should make a partial transfer now, when their children are in their 20s. The children need the mney now, rather than 20 years later (when their parents pass away).
NTUC Income will organise seminars to cover will writing, annuity plan, term annuity, trust, estate duty and similar topics.
More details will be announced later.
Preferred policyholder
NTUC Income plans to register a "preferred policyholder". They will be allowed to have a loan in the future (for car, house, and other purpose) at a preferential interest rate and more attractive terms.
This will be specially useful for young policyholders. The saving on interest can amount to a lot of money.
We will communicate to our policyholders soon.
This will be specially useful for young policyholders. The saving on interest can amount to a lot of money.
We will communicate to our policyholders soon.
High cost of living
I read a news report that young people find the cost of living to be high in Singapore.
I agree.
When I was young, the HDB flats and shops were at a subsidisied and controlled price. This helps to keep the cost of living low, and make Singapore competitive.
During the late 1980s, the HDB flats were allowed to appreciate to the "market price". This benefitted the HDB flat owners, but increased the cost of living for the next generation.
Looking back, it would have been better for Singapore, if HDB flats had been kept at the controlled prices. But, it is too late to turn back the clock.
At the current high prices, property will be just like any other investment. One has to think carefully before investing in property. Is the price right?
For some people, it may be better to rent a property. The rental may be lower than the cost of owning the property.
The capital sum can be invested in other means, eg in unit trusts or the combined fund from NTUC Income. These investments may give a better return in the long run.
Get advice. Make the right choice.
I agree.
When I was young, the HDB flats and shops were at a subsidisied and controlled price. This helps to keep the cost of living low, and make Singapore competitive.
During the late 1980s, the HDB flats were allowed to appreciate to the "market price". This benefitted the HDB flat owners, but increased the cost of living for the next generation.
Looking back, it would have been better for Singapore, if HDB flats had been kept at the controlled prices. But, it is too late to turn back the clock.
At the current high prices, property will be just like any other investment. One has to think carefully before investing in property. Is the price right?
For some people, it may be better to rent a property. The rental may be lower than the cost of owning the property.
The capital sum can be invested in other means, eg in unit trusts or the combined fund from NTUC Income. These investments may give a better return in the long run.
Get advice. Make the right choice.
Thursday, March 16, 2006
Incomeshield Unlimited
Someone suggested that we should call our medical plan as "Incomeshield Unlimited".
This plan now provides unlimited lifetime coverage. The total claimable amount is subject to certain specific and annual limits, but is unlimited in the amount that can be claimed during a lifetime.
Our coverage is better than the $5,100,000 limit that is advertised by another medical plan (which charge much higher premium than Incomeshield).
This plan now provides unlimited lifetime coverage. The total claimable amount is subject to certain specific and annual limits, but is unlimited in the amount that can be claimed during a lifetime.
Our coverage is better than the $5,100,000 limit that is advertised by another medical plan (which charge much higher premium than Incomeshield).
Logic9 National Competition
Here is an interesting competition to find the faster players to solve the Logic9 (Sudoku) puzzle. Registration is free.
Click on the following link to get details of the competition and to register
http://www.logic9.com.sg.
You have a chance to win up to 36,000 worth of prizes. The top prize for each age group is an IBM Thinkpad notebook worth $4,000.
You stand a better chance of winning, if you practice for this competition. You can buy a Logic9 CD or booklet for $5 only at selected NTUC Fairprice supermarkets.
Click on the following link to get details of the competition and to register
http://www.logic9.com.sg.
You have a chance to win up to 36,000 worth of prizes. The top prize for each age group is an IBM Thinkpad notebook worth $4,000.
You stand a better chance of winning, if you practice for this competition. You can buy a Logic9 CD or booklet for $5 only at selected NTUC Fairprice supermarkets.
Tuesday, March 14, 2006
Growth plan gives a fairly attractive return
A policyholder invested $50,000 in a Growth plan in 2001. It matured 5 years later with a maturity value of $58,000.
The policyholder earned a net return of 3.1% over the past 5 years on the Growth policy.
As the Growth policy has to be invested mostly in short term secure bonds, the return of 3.1% is quite attractive. During the past five years, Government bonds provide a return of around 3%.
Apart from giving a fairly good return, our Growth plan also give life insurance cover, which is built into the contract and not charged separately.
Our aim is to invest the funds prudently, get a fairly attractive return, and return most of the return to our policyholders.
Here is the good news for our policyholders of our Growth plan. The bonus rate has been increased recently. We expect to give better than 3.1% return in future years, based on the higher bonus rates. For a Growth plan that is invested for more than 10 years, the return should be higher than 4% per annum, based on our current bonus rates.
The policyholder earned a net return of 3.1% over the past 5 years on the Growth policy.
As the Growth policy has to be invested mostly in short term secure bonds, the return of 3.1% is quite attractive. During the past five years, Government bonds provide a return of around 3%.
Apart from giving a fairly good return, our Growth plan also give life insurance cover, which is built into the contract and not charged separately.
Our aim is to invest the funds prudently, get a fairly attractive return, and return most of the return to our policyholders.
Here is the good news for our policyholders of our Growth plan. The bonus rate has been increased recently. We expect to give better than 3.1% return in future years, based on the higher bonus rates. For a Growth plan that is invested for more than 10 years, the return should be higher than 4% per annum, based on our current bonus rates.
Survey of Young People
2,140 young people responded to the survey.
Which is more important to you?
* Get a better return on your savings 86%
* Make regular savings from salary 52%
* Adequate insurance cover 42%
* Get preferential terms for a loan in the future 19%
NTUC Income is planning to offer special terms for a loan "preferred policyholder". Which do you prefer?
* Lower interest rate 92%
* Hassle free application 50%
* Longer repayment period 29%
* Higher loan amount 27%
* Pre-approval of loan 15%
Which type of loan is likely to be attractive to you?
* To buy a home 66%
* For education 43%
* To buy a car or motor cycle 41%
* Loan for marriage 20%
* Other purpose 26%
To be a "preferred policyholder", you will need to be insured for at least 2 years and have total regular saving of more than $5,000. Do you find these conditions acceptable?
* I am interested to qualify in 2 years time 41%
* I already meet them 35%
* I am not interested at all 24%
Which is more important to you?
* Get a better return on your savings 86%
* Make regular savings from salary 52%
* Adequate insurance cover 42%
* Get preferential terms for a loan in the future 19%
NTUC Income is planning to offer special terms for a loan "preferred policyholder". Which do you prefer?
* Lower interest rate 92%
* Hassle free application 50%
* Longer repayment period 29%
* Higher loan amount 27%
* Pre-approval of loan 15%
Which type of loan is likely to be attractive to you?
* To buy a home 66%
* For education 43%
* To buy a car or motor cycle 41%
* Loan for marriage 20%
* Other purpose 26%
To be a "preferred policyholder", you will need to be insured for at least 2 years and have total regular saving of more than $5,000. Do you find these conditions acceptable?
* I am interested to qualify in 2 years time 41%
* I already meet them 35%
* I am not interested at all 24%
Switch and save on part of the 150%
Some people invested in a regular premium investment linked product from another insurer and have to incur up a distribution cost. Up to 150% of the annual premium may be taken away from their investment during the first few years.
A policyholder who has bought an expensive policy recently, and who was not told clearly about the high distribution cost, may find it better to switch to NTUC Income now.
They do not have to incur the distribution cost for the remaining period (usually up to three years) and can take a similar ILP policy from NTUC Income (Ideal 5) where 100% of the saving is invested from the first month.
There is a small catch. We impose $20 more in policy fee each year. You can see our adviser or visit our business center.
A policyholder who has bought an expensive policy recently, and who was not told clearly about the high distribution cost, may find it better to switch to NTUC Income now.
They do not have to incur the distribution cost for the remaining period (usually up to three years) and can take a similar ILP policy from NTUC Income (Ideal 5) where 100% of the saving is invested from the first month.
There is a small catch. We impose $20 more in policy fee each year. You can see our adviser or visit our business center.
Get 150% more
NTUC Income advertise our Ideal plan, which invests 100% of the monthly premium from the start. Similar plans from other insurers take away as much as 150% of the annual premium during the first few years.
Some insurers are unhappy with our advertisement. They expressed that our advertisement denigrates their product.
Here is my reply.
We wish to educate the general public that they have an option to buy a regular investment linked plan that does not carry a large front end load.
We do not intend to denigrate the products of other member companies. I am
sure that they are capable of convincing the consumers about the necessity
and value of paying the front end load.
Some insurers are unhappy with our advertisement. They expressed that our advertisement denigrates their product.
Here is my reply.
We wish to educate the general public that they have an option to buy a regular investment linked plan that does not carry a large front end load.
We do not intend to denigrate the products of other member companies. I am
sure that they are capable of convincing the consumers about the necessity
and value of paying the front end load.
Monday, March 13, 2006
Internet portal reduce front end charges
The Straits Times reported that two internet portals have reduced their front end charges for investing in unit trusts. The charges have been reduced to 1% and 2.5% respectively.
The unit trusts sold by these portals have high annual charges, typically from 1.5% to 2.5% per annum.
These high annual charges can reduce your return over a 10 year period.
By comparison, the combined fund from NTUC Income has modest charges, as follows:
- initial spread: 1.5% to 3.5%, depending on amount invested
- annual charge: about 1% per annum.
By investing with NTUC Income, you can get a return of about 3% to 12% more over 10 years, assuming that the performance of the fund is similar. This better return comes mainly from our lower annual charge.
The unit trusts sold by these portals have high annual charges, typically from 1.5% to 2.5% per annum.
These high annual charges can reduce your return over a 10 year period.
By comparison, the combined fund from NTUC Income has modest charges, as follows:
- initial spread: 1.5% to 3.5%, depending on amount invested
- annual charge: about 1% per annum.
By investing with NTUC Income, you can get a return of about 3% to 12% more over 10 years, assuming that the performance of the fund is similar. This better return comes mainly from our lower annual charge.
Thursday, March 09, 2006
How to give to your adult child
A woman in her mid 50s wanted to pass some of her wealth to her adult child. But she does not want to give a lump sum as the child may spent the money.
I suggested to buy an annuity for the child. The annuity will make an annual payment for a certain number of years. The payment can start from a certain date in the future.
She thought that this was a good idea. It did not occur to her.
The annuity provides a return of 3% to 4% per annum, guaranteed. It is tax exempt.
She originally wanted to buy a property and give the rental income to the child. However, this may involve some knowledge of how to look after the property and to find tentant. It may be too troublesome for the child.
I suggested to buy an annuity for the child. The annuity will make an annual payment for a certain number of years. The payment can start from a certain date in the future.
She thought that this was a good idea. It did not occur to her.
The annuity provides a return of 3% to 4% per annum, guaranteed. It is tax exempt.
She originally wanted to buy a property and give the rental income to the child. However, this may involve some knowledge of how to look after the property and to find tentant. It may be too troublesome for the child.
Get an affordable medical plan
If a male aged 25 buy an expensive medical plan, he has to pay a total premium of $57,600 in premium up to age 80 based on current premium rates.
The total premium may increase in the future, as the premiums are subject to revision.
If he buys Incomeshield with corresponding top-up rider, total premium is only $40,100, or 31% lower.
The coverage under both plans are largely similar.
The total premium may increase in the future, as the premiums are subject to revision.
If he buys Incomeshield with corresponding top-up rider, total premium is only $40,100, or 31% lower.
The coverage under both plans are largely similar.
Tuesday, March 07, 2006
Inadequate life insurance
The average amount of life insurance per breadwinner is $37,000. This is inadequate.
Each breadwinner should aim to have 3 to 5 years of earnings to take care of the needs of the family in the event of premature death. As a guide, they should aim to have a sum of $100,000 in life insurance.
Many people find it costly to insure for $100,000 in an endowment, whole life or dread disease policy. The premium is too high.
The current amount of life insurance probably reflect what they can afford to spend for a traditional life policy.
I suggest that they should take a personal accident or term life policy to make up the difference. The premium is quite low, as it is intended solely for protection.
Each breadwinner should aim to have 3 to 5 years of earnings to take care of the needs of the family in the event of premature death. As a guide, they should aim to have a sum of $100,000 in life insurance.
Many people find it costly to insure for $100,000 in an endowment, whole life or dread disease policy. The premium is too high.
The current amount of life insurance probably reflect what they can afford to spend for a traditional life policy.
I suggest that they should take a personal accident or term life policy to make up the difference. The premium is quite low, as it is intended solely for protection.
Subscribe to:
Posts (Atom)