Monday, April 21, 2008

Buy Low cost insurance now

Dear Mr. Tan,

You advised your blog readers to wait for the new life insurance company to offer low cost products. What happens if there is a delay in the availability of these products? What if death or disabiilty occurs and the people are not insured?

REPLY

I advised them to buy low cost insurance (i.e. Term and Decreasing Term) now. They should avoid high cost life insurance policy that takes away two years of their savings.

In the meantime, they should keep their savings in the bank. Although the interest rate is low, at least the savings are intact and not taken away to pay commission.

If they have accumulated more than $3,000, they can buy 1,000 units of ST ETF. Or any other low cost investment funds with a small front end load (not more than 1%).
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2 comments:

Anonymous said...

Just to add to Mr. Tan's suggestion to save, which I fully agree.

However, readers should also be cautious of the pending worldwide recession that is just around the corner. The news extract below is statement from GIC.

I have reiterated many times that this is not a good time to invest and it is better to keep cash for the next two to three years. You will need it to survive during the recession. The index will not be at 3,000 pts but will fall deeply below 2,400 pts and subsequently to 1,800 pts. No point to average down. A better way is to keep cash and buy your ETFs when costs only $1,800 or less.

R.

The following news extract from Reuters:

Singapore's GIC warns of global recession, crisis
21 Apr, 2008, 1617 hrs IST, REUTERS
SINGAPORE: Singapore's GIC, one of the biggest sovereign wealth funds, warned on Monday the world could be facing its worst recession in 30 years and that financial markets would be highly volatile.

Sovereign wealth funds from Asia and the Middle East have become more influential in financial markets after pouring billions of dollars into big banks on Wall Street and Europe that were reeling from losses related to the US mortgage market.

The Government of Singapore Investment Corp (GIC), which analysts estimate could manage assets or more than $300 billion, said financial turmoil would leave markets extremely volatile over the next one to two years.

"We could be facing a recession which is longer, deeper and wider than any recession we have encountered in the last 30 years," Deputy Chairman Tony Tan told GIC's staff on Monday.

April 23, 2008 2:02 AM
Anonymous said...

I think when he warned of recession it was with what already invested in mind and interest.The warning was to play safe that if the banking and financial institutions do not tweak their current parameters recession would happen. I don't see but signs of recovery and the current markets reflect it.Yes the current markets are still spooked by high oil prices but the prices are due to weakening of the dollar. The oil prices are adjusting to this change.
However, we mustn't let our guards down . On the other hand we shouldn't get paranoid .

April 23, 2008 5:42 PM

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