Saturday, November 04, 2006

How to provide for my family

Dear Mr Tan

I am thinking of retiring at 60 in 2007. I like your advice concerning adequate provision for my family. What do I need to do?

I have a 4 year old son, my wife takes (mid 40s) earns about $x monthly. She may also decide to retire.

I have 2 fixed deposits of $50,000. One insurance policy will mature to realise $350,000. We have other policies and investments of about $1 million).

We do not have any outstanding debt.

Best Rgds



Dear GY

I advise you to consider the following plans:

For investing CPF or bank deposits:

For your wife to invest regular savings:

Low cost term insurance (to provide security to your family)

Life annuity
Life annuity

My business center manager will ask my product specialist to contact you.
The specialist is paid a salary and does not earn a commission. Feel free to
talk to the specialist.

Tan Kin Lian

Friday, November 03, 2006

Ideal Plan for your child

What is the best plan for a parent to save for a child?

It is the ideal plan. It is flexible and can give you a better return for the future. It is better than a traditional Education policy.

Find out more:

Ideal plan for your child

Act now. Read the FAQ. Call our hotline 62 INCOME (6246 2663)

Flexi-Link: Earn up to $26,000 more

The Flexi-Link is for you to invest your CPF or fixed deposit to earn a better return.

By choosing the right fund (ie a large, well diversified, low charge fund), you can earn up to $26,000 more, for an investment of $50,000.

Find our more:

FAQ on Flexi-Link

Act now. Read our FAQ and call our hotline now. And benefit from this wonderful investment.

Ideal Plan: Earn up to $32,000 more

The Ideal plan is designed for young people to save regularly and invest for their future needs.

By choosing the right fund (ie large, well diversified, low charge fund) for a monthly saving of $200, they can earn up to $32,000 more, compared to similar plans in the market.

More details can be found at:

Ideal plan

Act now. Read the FAQ and call our hotline. Make the right choice, and get a better return on your savings.

Thursday, November 02, 2006

Shop for the best financial products

Where can you get the best insurance, bank or loan products.
Visit this independent website Best Products

Compare fixed deposit with money market fund

Hi Mr Tan,

I am just curious about NTUC's Flexi-cash investment versus MayBank's iSavvy time deposit.

iSavvy returns between 3% to 3.15% (returns variou with different lock-in period), with minimum of $25,000.

Say if I don't forsee an immediate use of my cash, would iSavvy suit me better?

When you have decided to invest your $100k into Flexi-Cash, have you too considered the merits of iSavvy? (being higher returns)



Dear MT

The advantage of Flexi-cash is its flexibility. I can withdraw my money at any time, without any penalty. This allows me to invest in an equity fund at the right time, eg if the market has corrected.

Another advantage is that the return is flexible. If the interest rate in the money market goes up, the return in flexi-cash will also go up. As interest rate is expected to increse, it will be to the advantage of the saver to be on "floating rate".

For the small difference in return, compared to the "locked up deposit" from Maybank, I prefer to be in flexi-cash.

Tan Kin Lian

Wednesday, November 01, 2006

It cost only $10 a month to insure for $100,000


i-Term, 10 years term, male, non-smoker
monthly premium for $100,000

20 9.20 6.50 70
30 10.10 6.70 66
40 18.90 12.80 68
50 45.30 37.40 82
60 135.70 107.90 80
69 328.60 264.80 80

Premiums are based on age at entry.

A male at age 30 can insure for $100,000 for 10 years at a premium of $10.10 a month. If he opts for decreasing term assurance (where the assured reduces by 10% each year), the premium is only $6.70. By choosing a decreasing term, the premium reduces by about 20% to 30%, depending on entry age.

More people join Incomeshield

With the introduction of the Enhanced Incomeshield, more people are joining us. Each month, we receive 5,200 new applicants (as compared to 3,000 previously).

About 2,000 policyholders leave us each month to join other plans (a decline from 3,500 previously).

We are able to clear the new applications promptly, if they do not have any pre-existing medical condition.

For those with medical conditions, we are not able to clear them as they require to be underwritten. We are still short handled. I apologise for the delay.

Invest in a life annuity

Life Annuity for single premium of $100,000

Immediate Annuity (Participating)

Age Male Female
With-CP No-CP With-CP No-CP

55 $391.60 $428.20 $366.60 $391.20
60 $428.60 $488.40 $400.90 $439.10
65 $473.60 $567.40 $443.30 $504.10
70 $528.50 $672.10 $496.10 $593.70

With-CP: with capital protection, ie refund of balance of capital sum on early death
No-CP: no capital protection, ie no refund on early death

Participating: a bonus will be added to increase the annuity each year. The amount of bonus depends on the investment yield of the annuity fund. It is not guaranteed, but is expected to average about 2.5% per year.

Buy a life annuity

I advice a retiree to invest in a life annuity. You can get a better return (compared to bank deposit) and the payment is guaranteed for a lifetime.

A male at age 65 can invest $100,000 to buy a capital-protected life annuity that pays $473.60 per month (or 5.7% per annum). Each year, a bonus may be added to the life annuity, depending on the yield of the annuity fund. I expect the bonus to average around 2.5% over the long term. This means that the annuity payment is likely to increase by about 2.5% a year. This is helpful to offset the increase in the cost of living.

Under the capital protected life annuity, the balance of the capital sum (after deducting the annuity payments) will be refunded to the estate in the event of early death. Only the interest is forgone. If the annuitant lives longer and has received more than than the capital sum, there is no refund.

The annuitant has the option to buy a non-protected life annuity, which pays a higher monthly income. For a male at age 65, the non-protected annuity pays $567.40 per month (or 6.8% per annum). This is nearly 20% more than a capital-protected annuity. This annuity will also enjoy bonus.

I advise the retiree to buy a non-protected annuity, as it pays more to the annuitant. The annuitant probably have a property or other assets to pass to the children. The annuity should be kept mainly for the retiree. By accepting a non-protected annuity, the payout will be higher.

The amount of annuity depends on the age at the time of purchase, and on the gender of the annuitant. The difference between capital protected and non-protected also varies according to each person.

FAQ on Life Annuity

Put your cash in money market now

Dear Mr Tan,

I have been caught with some bad experience both with insurance and investment but nothing serious to affect my life savings.

Being in my fifties, I runs a small business and have enough saving for my retirement which have for some years been kept in USD and SGD deposits earning very poor interest and suffering depreciating USD exchange rates.

I am afraid to invest in stock or funds at this moment thinking it is too high. Do you think I should wait or do something now with my savings? I am more thinking of protecting my nesteggs, avoiding it being eroded by inflation, poor interest rates and depreciating exchange rates.

I am of course feeling sorry to myself that I missed the current booming market.



Dear P

It may be better to wait for the market to correct, before investing in the equity fund. In the meantime, you can put your money in the money market fund (ie flexi-cash) plan to earn about 2.5% to 3% per annum. There is no lock-in period.


When the market correct, which I hope may happen within the next 12 months, you can invest in an equity fund.

This is what I did for the cash in my bank account. I put in the flexi-cash and will wait for a market correction.

If the market does not correct, I will be happy to get 2.5% to 3% per annum. This rate will change with the money market.

Tan Kin Lian

Consumers need advice "untouched by selfish agenda"

Dear Mr Tan

Like many faceless citizens, I am a fan of yours, more so after reading your blog and viewing your new website.

I have also been very impressed with Larry Haverkamp (Dr Money).

Both of you are a rare breed to whom all of us should go to for financial advice because I find the information from both of you so untouched by selfish agenda unlike others whom I understand of course have to make a living and so must try to sell whatever they can get the most profit out of.

All the regulations such as 14 days cooling off period are just something for the promoters to overcome.

I wonder if it is possible for more professional in your trade to model themselves after you and Mr Haverkemp.

I have no doubt we would be better off as a commercial city and society with more real value and respect given to the consumers at large.

Currently its seems that being a professionals are more like having a licence to profit as much as possible from the consumers who of course cannot be more sophiscated or more informed than the professionals and thus are generally at their mercy.

There must be a big untapped market for unbiased information to guide consumers around with their insurance, investment and other aspects of our life.

I hope by your examples, you may have shown the way for other professionals to follow as to how to really help their customers and at same time make a reasonable profit, making it a win win situation for all instead a zero sum situation of taking as much as possible from the customers and leaving their customers the risks of investment and insurance policies drawn up by the professionals as much as the laws allowed them for their interests instead of being fair to their customers.

Lastly, I am surprised that you have been able to actively engaged the readers of your blog and keeping it so updated despite your currently responsibilities in running Income and giving lectures etc.

I hope to attend one of your lectures before you leave. Meantime, you may put this and your reply on your blog if you wish.

My best wishes to you and congratulations on your success in this regards.

Warmest regards

BP Pan

Our agents give better value to customers

Dear Mr Tan

It is mentioned that the consultants at the business centres do not earn a commission.

What about insurance agents who are not from the business centres? Are they also paid a salary and do not earn any commission?




Dear OC

Our insurance agents (or advisers) are paid a commission on the insurance policies that they sell. Our agents earn a lower commission rate (compared to agents from other insurance companies). We are able to offer products that with lower premium and better return to our policyholders.

Please read the following FAQ:


Do you wish to visit our business center or have an adviser to contact you?

Tan Kin Lian

Hard boiled eggs

Do you know how to make hard boil eggs which are easy to peel off the shell?

Here is an advice from an experienced hand.

1. Place eggs in single layer in pot/saucepan.
2. Cover with at least one inch of water over tops of shells.
3. Cover pot with lid and bring to a boil.
4. As soon as it begins to boil, remove from heat and let stand.
5. When cooked to desired level, drain off hot water.
6. Immediately cover with tap/cold water.
7. Hard-cooked eggs: let stand in tap/cold water until completely cooled.

Tuesday, October 31, 2006

Top up showed a large gain in a few months

In June, we write to our investment-linked policies to top up their investments, as the stockmarket had corrected by about 10 percent.

Many policyholders responded to our advice. They have made a return of 5% to 10% during the past few months. Those who top-up earlier had a bigger gain, compared to those who acted later. In many cases, the amount of the top-up was more than their initial investment.

Here are some examples:

Nr Age Prev Inv Fund Top-up Now Gain
1. 46 5,000 Growth 75,000 79,494 6.0%
2. 45 30,000 Tech 50,000 56,004 12.0%
3. 40 20,000 Growth 99,700 104,422 4.7%
4. 55 50,000 Prime 50,000 54,715 9.4%
5. 61 40,000 Growth 55,000 58,076 5.6%

Cooling off period for sale of financial products

Banks employ marketing officers to sell complex financial products to their customers. The best time to catch the customer is on the maturity of their fixed deposits. As the customers are not happy with the low interest rate, the marketing officer introduced a structured deposit to the customer.

Many of these customers are ordinary people, who do not understand the risk and the fairness of the terms of the product.

The banks are required to give materials in writing to the customer. The matuerials explain the risk in some general way. But the marketing officer, during their talk, explain away the risk. They say, "The chance of losing all your money is very small". These statements are given verbally and not put down in writing.

Many people buy the complex risky products, without understanding the risk.

I suggest that the banks should be requird to give a 14 day cooling off period to the customer, and that it should happen on receipt of the wordings of the contract. The cooling off period must be prominently displayed on the front of the contract.

During the past ten or more years, life insurance companies are required to give a 14 day cooling off period for the sale of their products. This right has to be prominently conveyed to the customer.

I hope that there is a similar requirement for the complex structured products that are now being marketed by the banks.

Monday, October 30, 2006

NTUC Income does NOT treat AMD as suicide

Hello Mr Tan,

I noted that the government is trying to get Singaporeans to sign Advanced Medical Directive. From the insurer's point of view, is death via termination of life support system considered suicide?



Dear TTY

NTUC Income does not treat AMD as "suicide".

We are guided by the following view stated in a FAQ from MOH website.

Does the AMD Act encourage euthanasia?

No, the AMD Act does NOT encourage euthanasia. On the contrary, the AMD Act is explicitly and categorically against euthanasia. The Act states in:

Section 17(1) - Nothing in the Act shall authorise an act that causes or accelerates death as distinct from an act that permits the dying process to take its natural course.

Section 17(2) - It is hereby declared that nothing in this Act shall condone, authorise or approve abetment of suicide, mercy killing or euthanasia.

A terminally ill patient CANNOT use the AMD to commit suicide, nor does the AMD allow doctors to abet in any suicidal attempt. This is punishable by law.

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