Buy Term Insurance Directly

You can buy Term Insurance directly from the life insurance companies.

A list of the companies, with their fax and telephone numbers is shown below. You can try NTUC Income, UOB Life, Asia Life and Aviva. They are likely to be interested to reply to you.

Send a fax to them, asking them to quote the premium for you. You have to specify the
following:

1. Your age and gender
2. Sum assured
3. Term (level or reducing)

Some of them may send a quote to you. You can compare the quote with the benchmark premiums shown in my website:
http://www.tankinlian.com/faq/term.html

If the quoted premium is within 20% of my benchmark rates, they will represent good value to you.

All the best in your search. Share your results in my blog.

American International, Tel 6291 8000 Fax 6298 6000, http://www.aia.com.sg/
Aviva, Tel 6827 7988 Fax 6827 7900, http://www.aviva-singapore.com.sg/
AXA Life, Tel 6880 5500 Fax 6880 5501, http://www.axa.com.sg/
Friends Provident, Tel 6327 4019 Fax 6327 4020, http://www.fpinternational.com/
Great Eastern Life, Tel 6248 2000 Fax 6532 2214, http://www.lifeisgreat.com.sg/
HSBC Insurance. Tel 6225 6111 Fax 6221 2188, http://www.insurance.hsbc.com.sg/
Manulife, Tel 6737 1221 Fax 6737 8488, http://www.manulife.com.sg/
NTUC Income, Tel 6336 3322 Fax 6338 1500, http://www.income.com.sg/
Overseas Assurance, Tel 6248 2000 Fax 6532 2214, http://www.oac.com.sg/
Prudential Assurance, Tel 6535 8988 Fax 6532 4043, http://www.prudential.com.sg/
TM Asia Life, Tel 6224 3181 Fax 6223 9120, http://www.tmasialife.com/
Transamerica Life, Tel 6236 2366 Fax 6236 2123, http://www.transamerica.com.sg/
UOB Life, Tel 6227 8477 Fax 6224 3012, http://www.uoblife.com.sg/

Investment-linked plan with high distribution cost

Hi Mr. Tan

I just purchased an invesment linked plan from company X. It covers death, disability and crisis cover with terminal illness. The annual premuim is $3,000.

I want protection and saving for my retirement. I am Y yrs old and self employed with little CPF. The agent said this is the best plan out of all.

Can I take up this plan first as it is much cheaper in premium for my protection coverage and reduce it later to convert it into purely investment? The policy is now within the 14 days free look period.

REPLY

Can you find out how much of your premium is invested in the fund for the first few years, and when will 100% be invested?

I understand that the disctribution cost (to pay commission to the agent) from company X can take away 16 months of your premium. That is a lot of your savings to be taken away. You can look at this webpage, http://www.askdrmoney.com/Ins_ILP_RP.htm

I suggest that you cancel this policy immediately, i.e. within the 14 day free look period, until this matter is cleared up.

NTUC Income's Money Market Fund

Hi Kin Lian,

My thanks for all your contributions to financial education for your readers. May I ask your opinion on whether the NTUC Money Market Fund is safe, in view of the subprime problems please?

REPLY

I have checked the investments of this fund.

It is safe because the fund is invested in very short-term papers, average less than 6 months, mainly in interbank deposits with banks licensed to operate in Singapore. There is no exposure to subprime risk.

Personally, I have a significant investment in this fund.

Government Bonds

FIRST POSTED IN JULY 2007

Hi Mr Tan,
Due to the low fixed deposit interest rate, I intend to buy bonds issued by Singapore Government.

1) How many different types of bond we can buy as an individual?
2) Is there a minimum amount to buy?
3) How to buy and what risks do we have to take?

-------------------------------------

REPLY:

You can approach your bank or stockbroker. You can also view from the MAS website. Government bonds have the lowest risk, ie they are more secure than bank deposits.

Search my blog

Someone sent an e-mail to ask my views about "Traded Endowment policies". I replied that I had written about it in my blog.

Here is how you can search my blog for a topic of your interest. Go to the top of my blog and look for the box called "Search Blog". Type in the keyword, such as "Traded Endowment" or "Land Banking". You will get postings in my blog on your selected subject.

Someone sent an e-mail to ask me, "Where to buy Government bonds". I searched my blog for "Government bonds" and found a posting in July 2007. I re-dated this posting to appear at the top.

Logic Quiz A-7

There are five houses in a row. In each house lives a person with a different occupation, drinks a different beverage, plays a different sport and keeps a different pet.

1. The person who plays chess lives next to Albert.
2. The lawyer lives to the left of the teacher.
3. The person who plays chess lives next to the person who drinks tea.
4. The accountant lives to the left of the person who keeps cats.
5. The teacher plays golf.
6. The person who plays badminton lives to the left of the person who plays bowling.
7. The teacher lives next to Susan.
8. The salesman drinks beer.
9. The person who plays tennis lives in the second house.
10. Mary lives to the left of the person who drinks water.
11. John keeps birds.
12. The doctor lives in the third house.
13. The person who keeps birds lives to the left of the person who keeps dogs.
14. The person who plays tennis lives next to the salesman.
15. The person who keeps fish lives to the left of the person who keeps hamsters.
16. Robert drinks milk.

Question: Who drinks coffee?

Post your answer, time taken and name in this blog.

Answer can be found at:
http://www.tankinlian.com/logicquiz/qs.html

More quiz can be found at:
http://www.tankinlian.com/logicquiz/

Logic Quizzes at my website

Here is a treat for enthusiasts of the Logic Quiz.

You can have more quizzes from my website:
http://www.tankinlian.com/logicquiz/

Enjoy.

Answers to 6J16, 6A19

ANSWERS TO QUIZ 6J-17
Question: Who plays drum         Answer: Alice

               1           2           3           4        
student     Margaret    John        Peter       Alice      
eats        banana      papaya      apple       orange     
plays       trumpet     violin      piano       drum       
keeps       dog         cat         parrot      tortoise   

ANSWERS TO QUIZ 6A-19
Question: Who drives Mercedes         Answer: scientist

               1           2           3           4           5        
house       grey        purple      pink        maroon      brown      
is a        professor   marketeer   scientist   engineer    manager    
drinks      coffee      tea         water       wine        beer       
plays       tennis      badminton   golf        basketball  soccer     
drives      Volvo       Nissan      Mercedes    Honda       Totota     

Good chance to win the Sudoku Challenge

Someone sent an email to ask me if they have a good chance to win the competition by attending my workshop in Bishan.

The answer is "yes". After learning the four tips, you still have to practice hard with many puzzles (say 4 booklets with 500 puzzles). You will be able to do the puzzles very fast.

If you can solve the difficult puzzes within 10 minutes, your chance is quite good. Most of the participants take a longer time.

Bid and Offer prices of Unit Trust

Hi Mr Tan,

Not really about specific financial product, but I'm keen to know the difference between Bid-offer spread to Single pricing Unit Trusts. Is there a better model or do they work out the same?

REPLY

Most unit trusts indicate the Offer price and Bid price separately. You buy at the Offer price and you sell at the Bid price. The difference is called the Spread. It may vary from 1% to 5%, depending on the fund.

For example, if the spread is 2% and the Bid price is $2,00, the Offer price will be $2.04.

Some unit trust, also called a "no load" fund, will use a single price. You buy or sell at the single price. In some cases, the fund manager may impose a separate charge when you sell the units, especially if the investment is for a short period.

Alternatively, a no-load fund may impose a higher annual charge. For example, if the typical fund charges charges an annual charge of 1.5%, a no load fund may charge 2% yearly.

Sudoku Challenge 6 and 13 January 2008

The Bishan Community Club is organizing a national Sudoku Challenge as follows:

Preliminary: 6 Jan 2008 at the Bishan Community Club multi purpose hall (to select 16 finalists)
Grand Finals: 13 Jan 2008 at Suntec City (in support of the "Silver Industry Conference & Exhibition 2008)

Eligibility: The competitions are open to all Singapore Citizens and Permanent Residents, who are 40 years old and above (as at 1 January 2008).

Prizes: Top and consolation prizes will be given to all Finalists.

Registration: $3 per person
Walk-in: Bishan Community Club or any Community Centres/Clubs
Internet: http://one.pa.gov.sg/CRMSPortal/CRMSPortal.portal?_nfpb=true&_windowLabel=CRMSPortal_1&_urlType=action&CRMSPortal_1_action=CMFAdvanceSearch&_pageLabel=CRMSPortal_page_1

Bishan CC's Telephone: 6259 4720.
Closing Date: 31 December 2007

Tips on how to play Sudoku (Logic9): attend a workshop at Bishan CC

----------------------------------------------

PRIZES FOR THE NATIONAL SUDOKU CHALLENGE (sponsored by OTO)
Champion : OTO PowerFoot worth $880
1st Runner-up : OTO Big Foot worth $698
2nd Runner-up : OTO Electro Reflexologist worth $438
3rd Runner-up : OTO Trimax worth $328
5th to 8th : 4 pcs OTO Spinex worth $108 (each)
9th to 16th : 8 pcs OTO Eye Motion worth $48 (each)

Sudoku (Logic9) workshop

I am giving a 1.5 hour workshop at Bishan Community Club on Tuesday 18 December at 8 pm. If you are interested to attend, call the Club at 6259 4720. The fee is $5 only. You can pay on attendance at the workshop.

Special: You can buy 4 sets of puzzle books at a discounted price of $10 (normal $20).

If you are 40 years or older, you can register at the workshop to take part in the national Sudoku Challenge. Attractive prizes can be won. If you practice using my tips, you have a good chance to win the competition.

How long does it take to solve a Logic Quiz?

Dear Mr. Tan,

How much time should a person take to solve the Logic Quiz? How did you manage to create so many quizzes? It must have take a lot of time!

REPLY

When I first started to solve a 5X5 quiz (identified as type A), it took 30 minutes. After practicing many times, I am now able to solve it in 6 minutes. For the simple 4X4 quiz (identified as type J), I now take 3 minutes.

I wrote a computer program (using DOS BASIC language) to generate the quizzes. I am now able to produce 100 quizzes in 3 seconds. They follow different rule structures, and jumbles around the people and their characteristics. All the puzzles appear different.

If there is demand, I will print a book of puzzles. If not, I will publish in my website and let people exercise their minds.

You can try more quizzes at my website:
http://www.tankinlian.com/logicquiz/

Lower the cost of insurance

1. Can the cost of insurance be reduced?
Yes. Insurers have to design and market low cost insurance to cover personal risks, such as death, accidents and medical expenses.

The product has to be kept simple. The cost of marketing should be reduced considerably.

2. What about customers who prefer to have a return on their premiums?
It is better for customers to separate their insurance from investments. They will get a higher return on their investments and greater flexibility.

3. Is there still a role for insurance agents?
Yes. The agent plays a useful role to help the customer to get a competitive rate and to handle the paperwork. The commission can be 10% of the low cost premium.

As the premium is small, the commission is small. The agent cannot spend time to visit the customer. The agent has to improve the productvity. Most of the transactions can be handled through the telephone. If the customer has to be seen by the agent, the customer should visit the agent's office.

This is similar to buying stocks through a stockbroker or consulting a doctor.

4. Why are endowment and whole life products still popular in the developed markets?

They are popular in the markets where the customer can reduce tax by buying these life insurance products. The marketing cost of these products can be covered by the tax savings and still give a net benefit to the customer. The insurance adviser has to find the right customer who can benefit from the tax savings.

This situation does not apply in Singapore, as there is negligble tax savings from life insurance products. The marketing expenses eats into the investment return. Hence, it is better for the investments to be separated from insurance.

Types of Liability

I am familiar with liability due to negligence, but not clear about strict liability or absolute liability. Here is the explanation from an insurance book.

Type            Description                Example
No liability    Defendant cannot be held   Charitable institution in 
                liable                     some cases
.
Negligence      Defendant is liable if     Liability for damages caused
                found to be negligent      by motor accidents
.
Strict          Defendant is liable        Liability for damages resulting
liability       even if not negligent      from defective products
.
Absolute        Defendent is always        Liability for damages caused by
liability       liability, no defence      use of dynamite or dangerous 
                available                  animal

Corporate governance and risk management

In recent years, there has been a lot of attention on corporate governance and risk management. The aim was to get businesses to act responsibily and to avoid taking large risks that are not authorised by the shareholders.

Management consultants made a lot of money providing advice to boards of directors to teach them on these exotic matters. Regulators asked the boards to spend a lot of time and money on these matters.

What happened?

We still have the problem with the Special Investment Vehicles (SIV) set up by the large, "well managed" banks. These SIVs borrowed money on short term (where the interest rate is low) and invest them in long term risky assets (to get a high return). In good times, they made profit on the spread, i.e. the difference between the cost of funds and the return on risky assets.

When the subprime problem arose, investors did not want to refinance the short term borrowings. This caused a "credit crunch" to the SIVs. They were not able to pay their borrowings.

If the SIVs had to sell their assets to repay the borrowings, it would cause a collapse in the asset markets. The large banks that set up the SIVs decided to provide several billions of dollars of funding to take over the SIVs, and to write off billions of dollars in losses.

Lesson: After spending a lot of time and money on corporate governance and risk management, these banks still commit a large blunder in taking the risk of the SIVs.

A "common sense" approach would have prevented this mess. Do not borrow short and invest long. It does not require a complicated process of corporate governance or risk management.

Answer to J17, A17

ANSWERS TO QUIZ J-17
Question: Who enjoys reading         Answer: Katherine
_
               1           2           3           4         
student     Richard     Alice       Peter       Katherine   
eats        pear        orange      pineapple   apple       
plays       drum        piano       flute       violin      
enjoys      swimming    bicycling   fishing     reading     
_
ANSWERS TO QUIZ A-17
Question: Who plays drum         Answer: engineer
_
               1           2           3           4           5         
is a        technician  manager     specialist  engineer    scientist   
drive       Mercedes    Nissan      Toyota      Honda       BMW         
plays       bass        violin      trumpet     drum        flute       
eats        orange      banana      durian      papaya      apple       
enjoys      music       cards       karaoke     reading     movies      

Use credit card to buy shares?

This facility is being advertised by a bank. It looks appealling in a hot market. However, it comes with risks.

Read the advice from Dr Money.

http://newpaper.asia1.com.sg/columnists/story/0,4136,136759,00.html?
http://www.tankinlian.com/drmoney/

Logic Quiz 6A-19

There are five houses in a row with different colors. In each house lives a person with a different occupation, drinks a different beverage, plays a different sport and drives a different car.

1. The professor lives to the left of the person who drinks tea.
2. The engineer drives Honda.
3. The scientist lives to the left of the engineer.
4. The person who drives Honda lives to the left of the manager.
5. The brown house is occupied by the person who drinks beer.
6. The person who drives Totota lives in the last house.
7. The person who plays tennis drives Volvo.
8. The engineer plays basketball.
9. The marketeer lives in the second house.
10. The purple house is the second house.
11. The person who drinks water lives to the left of the person who drinks wine.
12. The grey house is to the left of the person who drives Nissan.
13. The person who drinks coffee lives next to the person who plays badminton.
14. The maroon house is to the left of the person who plays soccer.
15. The pink house is occupied by the person who plays golf.

Question: Who drives Mercedes

Give your answer, time taken and name in my blog.

Logic Quiz 6J-17

There are four students sitting in a row. Each student eats a different fruit, plays a different instrument and keeps a different pet.

1. The student who eats papaya sits in the second desk.
2. The student who eats apple sits to the left of the student who eats orange.
3. Margaret sits next to the student who plays violin.
4. Peter sits to the left of Alice.
5. John eats papaya.
6. The student who eats banana keeps dog.
7. The student who eats papaya sits to the left of the student who plays piano.
8. The student who plays trumpet sits to the left of the student who keeps cat.
9. The student who keeps parrot sits to the left of the student who keeps tortoise.

Question: Who plays drum

Give your answer, time and name in my blog.