Tuesday, January 01, 2008

Get adequate insurance at a low cost

Dear Mr. Tan,

You advised to buy personal accident insurance now, and life insurance later. What happens if at a later date, I am in poor health and not accepted for life insurance?

REPLY

The risk of uninsurability is quite low (less than 0.5% a year).

The bigger risks are:

1. People hesitate in buying expensive insurance, and are inadequately insured against accidents (more than 50%).

2. People buy an expensive life insurance and lapse the policy due to inability to continue paying the premium (5% a year).

It is better to have adequate personal accident insurance now, and upgrade to a more expensive insurance at a later date. For young people, the risk of meeting an accident is much higher than contracting a serious illness.
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3 comments:

Khiat Han Hwee Adrian said...

Term insurance has a part in insurance planning. Life Insurance also has a part.

A person who prefers not to get a life insurance must know how to prepare for the lack of it into their later years. Low cost is not everything. Some of you still require advice but hopefully you are able to get the right person to show you how.

The person who get a Life Insurance will eventually be better off than the person who get a term but instead squandered the rest of the savings away.

January 02, 2008 1:22 AM
Anonymous said...

I think it is perfectly fine for a person to buy term insurance and not invest but use the money for other purposes - go for travel, catch the latest movies/musical, buy a branded watch, touch-up the house etc.

whether he invest or squanders it away, that is his business. you all have no right to force people to invest. if i think investing is too troublesome, then i don't invest. I have this choice.

I think it is rubbish to force someone to invest. you can still live a good stress-free life with decent income.

I hope this blog do not use fear of inflation, fear of not enough for the future, fear of losing out, to scare people into investing. using this emotion is just as bad as scaring people to buy insurance.

I find some of the comments and articles on this blog using this "scare" tactics to force people to invest. oh, your money in 20 years time will halved, etc. this is nonsense. I have not invested my money for the last twenty years and my money is safe with CPF and I am still have money for travel and others. my insurance cover is $20,000 and I have 3 kids. So?

I don't understand why you all want to force people to invest in low-cost funds. "low cost" is still cost right? Are you saying our government is incompetent in managing our money? I think not.

inflation projection is just a "projection". if you saying inflation is 2% p.a, can you guaranteed that next year this time, everything in Singapore go up by 2%? therefore I rather keep my money in fixed deposits and CPF, where it is truly no costs.

if investing in low cost funds is right way, our government would have help us to invest already. if mr. tan wants to push his own products as part of his retirement business, that's his choice but please dun force people to invest because they have a choice not to and still stay happy and
stress-free.

regards.

January 02, 2008 3:44 PM
Anonymous said...

I think that is your business whether you wish to invest or not to invest. Whether you have enough for retirement is also your business. Everything is your business. You have complete freedom. There is no force nor touting nor promotion of any product.
I think you got it all wrong to think Mr. Tan's blog is to promote his products and that he has vested interest whether you agree or not agree to his advice or to other posters' advice.
This blog is to educate the buying public to do what is right. If you disagree with the comments you should rebut or debunk the advice
instead of accusing Mr. Tan of instilling fear and exploiting emotion as tactics to make people buy his products or ideas.He has none of these.
You must be very rich and have a huge balance in your CPF to care whether you earning a decent rate or will have enough to retire. This blog is not for you. It is for those poor souls who are inevitable victims of unscrupulous insurance agents who are on the prowl preying on unwary victims like them. You are safe from these agents but the poor ones are not.They are uneducated, ignorant, gullible, and too trusting that they get cheated and fleeced by greedy , incompetent and dishonest insurance salesmen.
They need protection and help with their personal finances.
So you see the objectives of this blog is not to force anyone to invest in low cost funds. You can invest under your pillow or bed or in the toilet cistern.It is your freedom if you think that is the best place to invest your money.
The blog is also to educate and to create awareness of errant or rogue agents on the loose and how to spot them out. It is also to identify the good products from the bad ones. This is a service to people who want to know about insurance and investment.

January 02, 2008 11:36 PM

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