Saturday, April 26, 2008

Calpers earned 19.1% return

Source: Bloomberg

California Public Employee Retirement Scheme (Calpers) earned a 19.1 percent return for the year ended June 30, 2007, according to its most recent annual report, compared with a gain of 18.4 percent on the Standard & Poor's 500 Index of stocks.

The fund had about 60 percent of its portfolio invested in public equity, about 24 percent in bonds and other fixed income, 8 percent in real estate, 6.7 percent in private equity and 1.4 percent in cash equivalents, the report said.

Friday, April 25, 2008

Homeowners convert to costlier fixed rate loans

Source: Bloomberg

Mortgage refinancing in the U.S. is increasing as record numbers of homeowners dump their adjustable-rate mortgages for the security of a fixed loan.

The amount of refinanced home loans will reach $321 billion by the end of June, the most in a year. Nine out of 10 of those borrowers will choose a fixed rate.

Property owners are abandoning adjustable-rate mortgages, or ARMs, to ward off the prospect of higher payments. About 6 million U.S. homeowners, or 59 percent of the ARM market, have Libor-indexed loans. The 12-month U.K. benchmark Libor rate rose more than two-thirds of a percentage point in the past month.

Question: Will this situation happen in Singapore? Will more people move from floating to fixed rate loans?

Bonus on participating policies

Dear Mr. Tan
I have several life insurance policies with X. They reported higher investment income for 2007. I hear that they will reduce their annual bonus on their policies and increase the maturity bonus. Is this fair to policyholders? If not, what action can the policyholder take?

The life insurance company and its appointed actuary is required to act fairly in the distribution of the annual bonus. They have to follow the principles set out in their contract or in their company bye-laws. Recently, the Monetary Authority of Singapore has issued a guideline on the distribution of bonuses on participating policies.

In the situation that you have described, the company X has to give a convincing explanation on why they are reducing their annual bonus, in spite of an increase in investment income. If you are unhappy with the explanation, you can lodge a complaint with MAS or with FiDREC.

You can ask MAS to verify if Company X has met with their obligation under the MAS guidelines.

Higher return and lower risk

Dear Mr Tan,

Indeed, having read through your website, I have come to understand just how great ETFs are, esp the STI ETF.
You mentioned that STI ETF is like a unit trust, less those high expense ratio and high sales charge. You also highlighted that for long term investors, it is good to invest in ETF.

Having thought through quite some time, I don't get the logic. Since STI ETF can be bought and sold like shares, why is it beneficial, especially to long term investors?

Shares are likely to earn a higher return compared to bonds and other safer investments. But shares are volatile, i.e risky.

By investing in a fund comprising of many shares, you reduce the risk through diversification. By investing for the long term, you average out the good and bad years, to get an average long term return.

Hence, a low cost investment fund, such as ETF, allows you to earn a higher return (from shares) and reduce the risk through diversification.

Is the worst over?

Dear Sir
It's nice to read your blog. Just to seek your views:
1) has the worse (financial market) over ?
2) is it time to start investing now or when ?

If you are investing for the long term, 10 years or longer, it is quite safe to start investing now.-

Large writedowns by banks

Source: Economist

UBS made public a summary of an internal investigation into the mistakes that led it to write down a total of $38 billion, the most by any European bank hit by the subprime crisis. The company laid most of the blame on positions taken by its investment-banking arm. To rebuild its fortunes, the Swiss bank is reducing the size of its investment-banking business to refocus on its private-client base.

Other banks added to the list of woes stemming from the mortgage markets. Credit Suisse, UBS's rival, swung to a loss in the first quarter largely because it took SFr5.3 billion ($5.0 billion) in writedowns. Bank of America said its first-quarter profit had fallen by 77% compared with a year ago, and that it would increase its provision for credit losses by $5 billion. Citigroup booked another $13 billion in writedowns and made a quarterly loss of $5.1 billion. And Royal Bank of Scotland said it needed to raise £12 billion ($24 billion), about a third of its market value, in a rights issue to help protect its core capital.

Total: USD 85 billion

High food prices

I saw a media report that the price of wheat and corn increased by 60% over the past 12 months. The price of rice increased by more than 100%.

The large increase in food prices is partly due to reduced supply and higher real demand. But the large increase is exaggerated considerly by speculation by the hedge funds. Ordinary people now start to hoard the grains, contributing to the speculative fever.

Like all speculation of this kind, the bubble will burst and the prices will come down to the correct market level. It will be higher than 12 months ago, but should not be at the high levels today.

My advice: buy enough rice to meet your family needs. Do not engage in the speculation and hoarding. If you do, be prepared to suffer a loss when the market drops.

Thursday, April 24, 2008

Peter Drucker: Innovation

This is what Peter Drucker said about "innovation".

Innovation is an important function of a business. It has to innovate to provide for different needs of the customers.

It is not enough for a business to just provide a product or service. It has provide better and more cheaply. It is not necessary for a business to grow bigger, but it has to grow better.

Innovation may result in a lower price, but it may also result in a new and better product, a new convenience, or a new want.

Innovation results in a different product or service, and creates a new potential of satisfaction. It may be to find a new use for an old product.

Innovation is not invention.

Innovation is easy and fun


Joseph Tay wrote an article in Today paper on 12 September entitled "Why innovation is hard and scary". The article said that uncertainty and fear of failure prevent us from taking risk.

I wish to present a different view - "Innovation is easy and fun". Here are four points.

Point one. I define innovation as doing something that you have done before, but finding a new way to do it. The aim is to improve the results.

As you have done it before, you can get the benchmark from the "old way". This benchmark can be used to compare against the "new way". If you can get better results, then the new way is better.

You will find it fun to get better results through innovation. Many people will love the challenge.

Innovation is different from creativity. Creativity means doing something that has not been done before. It is more difficult to handle. Innovation is easier.

Point two. To get better results, you will have to try many times. You have to face uncertainty - will the new way can produce better results? How to convince the boss?

Do not try to find the answer through planning or through theory. Try it out and see if it works. If not, try a different way. Be ready to try many times, and to measure the results.

Remember, Thomas Edison had to try 1,000 times before he found the right way to produce a light bulb.

I encourage "do, learn , adapt". You can learn best by experimentation. Because you have to t ry many, many times, it is better to act promptly. Do not spend too much time in analysing.

Point three. Do not ask for approval from your boss or from civil servant (if some government regulation might be involved). Be ready to trust your judgement.

If you ask for approval, the next person need to be familiar with the task before they can decide. They probably know less about the innovation than you. So, it is better for you to decide.

A well known sports manufacture has the slogan, "Just do it".

Point four. What happens if the change involve a high level of risk that can cause business failure?

If this is the case, you can try a pilot project. Try it on a small, experimental scale. If the pilot project works, you can present it for approval by your boss. By that time, you are convinced, and it will be quite easy to convince your boss on making the big bet.

Conclusion. I hope that my four points on innovation will be helpful to encourage people to be willing to innovate, and to improve. It can be easy and fun.

Tan Kin Lian


From: Wikipedia

The classic definitions of innovation include:

* the act of introducing something new (American Heritage Dictionary).
* the introduction of something new (Merriam-Webster Online)
* a new idea, method or device (Merriam-Webster Online)
* the successful exploitation of new ideas (Department of Trade and Industry, UK).
* change that creates a new dimension of performance (Peter Drucker)
* the process of making improvements by introducing something new

In economics, business and government policy, the "something new" must be substantially different, not an insignificant change. In economics, the change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy.

The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem.

Innovation is an important topic in the study of economics, business, technology, sociology, and engineering. Since innovation is also considered a major driver of the economy, the factors that lead to innovation are also considered to be critical to policy makers.

Views from Tan Kin Lian:
Innovation is doing something new. It is a change to an existing process, and is able to bring significant improvements. It does not need to be perfect; it only needs to be significantly better. This approach, "to be better, not perfect" can encourage people to act promptly to introduce innovation.

Declaring a benign cyst

Should a benign cyst be declared to the insurance company? Here is the advice from a doctor.

There are several types of breast cysts. Some do not have increased risks of malignacy and some do It is best for the applicant to re-declare the condition.

The applicant should obtain a copy of all her results from her attending physician and submit these resuts to the underwriter. It will be useful if she can also ask her attending physician to provide a short note of the diagnosis, when it was diagnosed and how the progress has been since being diagnosed.

Usually these patients are reviewed at least once a year and ultrasound will be done at reveiws to check on the progress. If the condition has been present for several years and nothing has happened, it is less likely to be any condition that will give rise to increased mortality.

12 months bond for training a new employee

Dear Mr. Tan

I surf the net and found about your blog, that has short article about training bond. I would like to know, would it be possible if i request for some sample from you for my reference. How is the calculation being made, terms and conditions and what are the procedures involve. I m still searching for more samples on the net but not much can be found. Hope you can help me with that. Thank you.


When I was in NTUC Income, we introduced a condition in the letter of appointment. It reads as follows (not the exact words):

In the event that the employee leaves the service for any reason during the first 12 months from the commencing date of service, the employee agrees to reimburse the employer an amount equal to one month's salary to compensate the employer for the cost of recruiting and training the employee.

The wording is not legally tight, but it is generally respected by the employee. In practice, the employer may waive this requirement under special circumstances. Most employees will think carefully before they join the company, and will only accept the employment if they are quite sure that they will stay for at least one year, or longer. It helps to weed out the employees that accept a job and continue to look for another job.

I hope that you find my comments to be helpful. Wish you all the best.

Cysts and cancer

Mr. Tan,
I found some breast lumps and was referred to TTSH for followup. The lumps turned out to be cysts, which are very common in women and which have no correlation to the incidence of subsequent breast cancer.

When I bought a H&S policy from income, I declared this verbally to the agent, but the agent decided that it was trivial and thus did not write down on the declaration form. Would you advise me to do a re-declaration?

How reasonable are the actuaries in assessing the risk of cancer in case of a benign condition like cysts. Why is it that the actuaries cannot accept doctor's letters stating that the presence of a benign condition does not increase the risk of cancer? I had to keep fighting for coverage on another condition I had and even then, NTUC didn't give me full coverage.

It is better for you to make a re-declaration now. Tell the insurance company that you did disclose it to the agent who decided that it did not need to be recorded. If the company accepts the declaration, then it is good for all parties. If not, the company has to deal with the agent.

I am not familiar with the probably of cyst and its impact on cancer. Sorry, I cannot comment on this matter. Let me ask a doctor.

Send your questions by e-mail

If you wish to ask a question, send an e-mail to me. Do not post it as a comment in my blog, as I may overlook it.

Non Disclosure

Claim officers are quick to use the non-disclosure clause to reject life and health insurance claims. They are treading on dangerous grounds.

Most life insurance policies have an "indisputable clause". The insurance company is not allowed to dispute a claim after a certain period (say 1 or 2 years), except in the event of fraud. To dispute the claim, the insurance company has to prove that the policyholder intends to commit fraud. The burden of proof is on the insurance company.

To reject a claim within the disputable period, the insurance company has to show that the non-disclosure is deliberate, i.e. that the policyholder knows about the medical condition and deliberately withhold it to get the insurance accepted.

Here is my advice to a policyholder who faces a rejected claim on the grounds of non-disclosure.

1. Ask the claim officer to state the following:
a) The wording of the non-disclosure and indusputability clause.
b) The facts and evidence to support their decision to reject the claim

2. Present your facts in writing to support your position that the policyholder acted in disclosing relevant information.

3. Meet with the claim officer and manager to resolve the matter. Have any formal decision recorded in writing.

If you decide, at a later stage, to bring a complant to FiDREC or to take up a legal case, your position will be supported by the written evidence.

U.S. Presidential Election

I have been following the primary election with great interest. The Republican Party has selected their candidate, John McCain, quite early. The Democratic Party is still at a deadlock.

The headline in MyPaper said, "The Democratic Conundrum"
Hillary Clinton: "She can't win but won't quit"
Barack Obama: "He's going to win but can't close it out".

I hope that the Democratic Party can sort out its conundrum early and field a strong candidate in the election in November.

Here is my suggestion. Clinton and Obama work together as a team. Clinton will be the Presidential candidate and Obama will be the Vice Presidential candidate in 2008. In 2012, Clinton will step down (i.e. a prior agreement) and support Obama as the Presidential candidate.

Clinton is now 60 years old and has more experience in Government. She should take the leadership in 2008. Obama is mid 40s. In 4 years time, Obama will have the experience to take over.

My personal wish is that a Democrat will be the next USA President.

Rejection of a critical illness claim

Dear Mr. Tan,

I bought a critical illness cover for my wife two years ago. Recently, she felt some pain on her breast and saw a doctor at the polyclinic. The doctor examined her and refererred her to Tan Tock Seng for further examination. She was diagnosed with breast cancer.

At the polyclinic, she told the doctor that she did a mammogram more than ten years ago. It showed a lumpy breast but The doctor at that time said that there was no need for repeat consultation. I called the clinic where she did her mammogram but was told that they could not find her previous record. My wife has all along been in good health until this unforseen illiness was detected last year.

The insurance company denied her claim becuase she did not disclosed the breast lump in her declaration form. There is no record on this matter except for her verbal conversation with the doctor at the polyclinic. Can the insurance company deny the claim? Please advise.


I am sorry to learn about your wife's medical condition and the rejection of the claim by the insurance company.

I suggest that you write to the insurance company formally to request for the following facts to be put down in writing:
a) the coverage of the policy
b) the policy condition regarding non-disclose and incontestibility clause
c) the facts of the case, in particular the evidence of her previous medical condition
d) the reason for the rejection

If the insurance company wish to reject the claim, they have to duty to prove non-disclosure of a previous medical condition. It seems that the verbal conversation does not constitute sufficient evidence to support the rejection. You should keep a record of these correspendence. If you meet with the claim manager, you can also ask for their position to be put down in writing.

If you feel that the insurance company has been unfair in rejection of the claim, you can lodge a complaint with the FiDREC (Financial industry Dispute Resolution Center).

You can also refer this matter to a lawyer, but at a later stage.

Wednesday, April 23, 2008

Dual Currency Investment

Dear Mr. Tan,

Dual currency premium deposit, if US$ is the base currrency and the dual currency deposit is Aud at intrerest of say 8.% with tenor to 1 month. How does it work and how should I set my strike price so that I do not lose my base currency principal


Read this FAQ

Soft commodity

A commodity such as coffee, cocoa, sugar and fruit. This term generally refers to commodities that are grown, rather than mined.

Soft commodities play a major part in the futures market. They are used both by farmers wishing to lock-in the future prices of their crops, and by speculative investors seeking a profit.

Beed cash? Rent out your HDB flat

Read the article by Dr. Money:,4136,152790,00.html

More Dr. Money's articles here:

Tuesday, April 22, 2008

Credit Card Debt

Hello Mr. Tan,

I read your blog re: the subject matter above. And you mention cooperative society can be of assistance. What/who are the cooperative society? I don't understand that term, and would really appreciate it if you could clarify?


I suggest that you contact Credit Counselling Singapore. They may be able to help you.

To my knowledge, the coperative societies are not able to help someone who is already in debt. You should join a cooperative society and start saving with it. When you need a loan, they can provide it to you at lower cost, compared to a credit card.

New way of marketing

A blog reader asked how a new life insurance company can market its products in Singapore, without paying high commission to agents.

It can adopt an innovative "educational" approach:

a) Educate the customers through the website
b) Give educational talks at workplaces and public venues
c) Distribute educational materials on the street
d) Print articles in the print media

This educational materials will inform the consumers about the value of insurance and the difference in cost between the "low cost" and "high cost" products. I expect that many consumers will prefer to buy the "low cost" products directly.

High prices of commodities

The prices of oil, gold, rice and other commodities have shot through the roof. The large increases are due to:

a) Shortage
b) Financial speculation

The actual shortage may be small and temporary. But the financial speculators, e.g. hedge funds, have taken advantage of the situation to push up prices beyond the fundamentals. Even ordinary people have jumped into the bandwagon.

These extreme price movements are a function of the free market. It is bad for the global economy and is hurting many poor people. It a weakness of the market mechanism.

I hope that there will be some measures to prevent the excessive speculation.

Avoid high cost ILP

Hi Mr. Tan,

I've been following your blog and it has been really great just reading your entries. You have come across as a very sincere and helpful person.

I would like to get some advise from you regarding insurance. I have bought an investment linked policy with an insurance company but would like to know if its wiser to just buy a pure insurance rather than an investment linked one?


It is better to buy Term insurance for the insurance protection and invest in a low cost investment fund. This is explained in these FAQs:

Most investment linked products have high charges that take away two years of your savings:

Monday, April 21, 2008

Share your experience

If you like me to share your experience in the main section of my blog (and not as a comment), you have to send an e-mail to me. This is for me to contact you and verify the facts that you have posted. I will not put your actual name, if you wish to remain anonymous.

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?


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%).

Customer Care Hotline

Some companies have a Customer Care hotline. Actually, it is frustrating to call the hotline, due to the following:

a) Spend 1 to 2 minutes to listen to a voice recording
b) Have to press many buttons to get through
c) Have to wait for many cycles (3 to 5 minutes) for an agent to be available, before the caller gives up.

I gave up and sent the following e-mail to the company:

"I had a lot of difficulty in reaching your Customer Care. If you really care about your customers, how about making it easy for them to get through and talk to someone?"

Cancel a high cost ILP

Many people were shocked when they learn that the investment-linked policy (ILP) that they bought from the insurance agent (who is usually their friend) can take away up to 2 years of their savings.

They feel let down by their friend, who offered a policy that give so poor value, and lock them up for a lifetime.

What can they do?

It is best to terminate the policy early (say within the first two years) and take a loss. As the high cost is usually spread over the the first five years, the policyholder will only bear part of the full cost by early termination. The policyholder can save on the high charges on the future premiums.

What is the alternative?

a) Save in a bank account for the time being. When you accumulate more than $3,000, you can buy 1,000 shares of STI ETF or other low cost ETFs on the Singapore Exchange.

b) Buy a low cost investment fund with no upfront spread, and low expense ratio. This will be available soon.

Earn more than the rate of inflation

Hi Kin Lian,

Many people buy life insurance policies to save for their future needs. For most of them, these policies takes most of their long term savings. Why does the policies give a poor return, which is sometimes not enough to cover the rate of inflation? What can ordinary people do, to get a return that can beat inflation?


You can read this FAQ to understand the true cost of life insurance. It is quite high, and represents a reduction of more than 4% from the actual yield. After taking this reduction, the net yield is not sufficient to cover the rate of inflation:

To beat inflation, it is better to buy Term insurance and invest in a low cost investment fund. This is explained in these FAQs:

Benefit Illustration

1. What is a benefit illustration?

A life insurance agent is required to provide a benefit illustration for the life insurance policy that they want to sell to you. This benefit illustration is mandatory, as a life insurance policy is a long term commitment. The format of this benefit illustration is approved by the Monetary Authority of Singapore. It can comprise of more than 10 pages and contain essential information about the policy.

The insurance agent is required to explain to you the key facts in the benefit illustration. In practice, the insurance agent is likely to avoid the key points that are important to the consumer, such as the yield on the policy and the commission earned by the agent.

2. What should the consumer look for in the benefit illustration?

You should ask the following questions to the agent:
a) What is the total premium paid, cash value and the net yield to the policyholder after 5, 10, 15 and 20 years
b) What is the amount paid as commission to the agent and the agency managers?
c) What is the gross yield expected from the insurance fund?

If you find the reduction in yield, i.e. difference between (c) and (a), to be more than 2%, then the life insurance policy is too expensive and give poor value to the consumer.

3. What yield should the consumer expect from the life insurance policy?

If you expect to pay premiums for 20 years in a savings type product (such as a whole life, endowment, critical illness or investment linked policy) , you should look for a net yield of at least 4% per annum. If you do not get this yield, the insurance policy gives poor value.

You should ask the agent to point out to you the paragraph in the benefit illustration that covers this point.

4. What is a fair rate of commission that should be earned by the agent?

As the consumer, you are paying for the commission earned by the agent and the agency managers. This is stated under the item of "distribution cost". You should ask the agent to point out this paragraph to you.

If you save a premium of $300 a month, the distribution cost can be more than $6,000. This is the money taken from you to pay the agent and the agency manager. This is too expensive. A fair rate of commision to the agent should be $200, and not a few thousand dollars.

If the agent cannot provide the information or a clear explanation to you, you should avoid the agent as he or she is incompetent or dishonest.

End of FAQ

Avoid buying life insurance on the street

Dear Mr. Tan,
I need your advice. I was hard sell into buying an insurance policy outside a MRT station. The agent was hard sell, giving me a lot of attractions of the product, such as cash back and unemployment benefit. When I returned home, my family told me that this policy gives a bad return. What can I do?

You can write to cancel the policy within 14 days and ask for a full refund of the premium.

Do not buy any insurance or financial product from sales people on the street. As a life insurance policy is a long term commitment, you need to understand it clearly. You cannot get a clear picture by listening to a presentation on the street.

Lesson: Do not buy a life insurance policy on the street

Opportunities in a Life Insurance Company

Policy Administration Executive/Senior Executive

The Policy Administration Executive/Senior Executive plays an important role to ensure smooth and efficient support for our group and individual business. This includes administration of new business and renewal of existing business, ensuring policies are issued and membership databases updated in a timely manner, followed by generation of accurate invoices.

The ideal candidate should have at least 1-2 years of relevant working experience, be matured, independent and self-driven. He/she should be meticulous, possess leadership qualities and be able to work with internal and external customers. A degree in Insurance, Finance or Business will be an advantage but Diploma holders with relevant working experience will be considered.

Policy Administration Supervisor/Administrative Assistant

The Policy Administration team is responsible for upkeep and maintaining policies and membership database of new and existing clients. Duties will include management of new business and renewals of existing clients, change in client database, premium adjustments and generating policy documents.

As a member of a dynamic and fast-growing organization, you should be meticulous, self-motivated and have an analytical mind. You will report to the team leader of the Policy Administration department.

A supervisor should possess a Diploma, ideally in Business, Finance or Insurance, preferably with at least 1 year’s working experience. However, fresh graduates who are willing to learn and work hard are welcome.

Interested? Send your resume to

Sunday, April 20, 2008

Regular savings in Wealth Accumulator

Dear Mr. Tan,

I have already committed to a investment linked policy with X. I have been paying $300 a month for the past year. My cash value is very low. I learn from your blog that this is due to the high commission earned by the insurance agent. If I swtich to the Wealth Accumulator, will I earn a better yield?

The investment linked policy that you have bought could take away up to two years of your savings, or $7,000. If you terminate it earlier, you will reduce your loss. If you invest in a fund with no front-end load, there is no additional cost to you. You will benefit from the savings in the remaining charges under the ILP.

As the low cost investment fund has smaller expense ratio, your investments will earn a better return over the longer term. This is in additional to the saving in the front end load. You will get a double benefit.

In general, it is advisable for you to terminate your existing regular premium ILP and move to the Wealth Accumulator.

Switch into the Wealth Accumulator account

Hi Mr. Tan,

I have a lot of money invested in NTUC's combined fund. Will it be better for me to switch my investment into the low cost investment fund that it becomes available, i.e. the Wealth Accumulator account?


I expect a new life insurance company will introduce the Wealth Accumulator plan in 6 to 12 months time. As it will have no front-end charge, you can switch from any existing fund or unit trust, at no switching cost.

You will benefit from the lower expense ratio of the low cost investment fund. The difference could be 0.5% to 2% for each year of investment. You may be able to get 5% to 40% more, over 10 to 20 years, by switching.

I hope that you will also be able to enjoy better customer service from the new company, as it will have a new computer system and call center to serve the customers better.

You can wait for details to be announced, before you make this decision.

New Life Insurance Company

Hi Mr. Tan,

I'm sure I'm not the first to tell you this. You give great advices on insurance buying and investments.I truly enjoy reading your blog and FAQs.

I'd like to have some suggestions for life insurance I'm planning to purchase. I'm 23 years old this year and just started working full-time with little or no savings.

I am thinking of getting the SAF Group Term policy with a Sum Assured of $200k with monthly premium of $25.60. Or shall I just get a decreasing term insurance and invest the rest like you always mention?

I can't seem to find good Decreasing Term insurance. Could you give me some advices on which particular insurance and ETF fund?


If you wait a few months, there will be a new life insurance company that will offer Decreasing Term and low cost investment funds.

Meanwhile, you can keep your savings in the bank account. Although it earns 1%, at least the saving is intact and is not used to pay hefty commission to the insurance agent.

You can buy the SAF Group Insurance. It offers a high protection at a very low cost. You will probably find the premium to be even lower than the benchmark rates shown here:

Decreasing Term

Dear Mr. Tan,

I am a 27 years old. I have bought life insurance with insurred sum of $30,000 which cost $50 premium a month.

I realised the insurred amount is far from sufficient for me especially I have parents in their fifties who will be retire soon, with insufficient savings for their retirement.

After reading from your website, I realised that the decreasing term insurance is affordable for me to provide a monthly income of $3,000 to my parents till they're 80yrs old, should anything happen to me.

However, when I have tried contacting Aviva and Ntuc Income on decreasing term insurance for insured amount for $900,000. They told me they do not offer decreasing term insurance. Do you have any idea which insurance companies still offer this? I know they do offer this level term insurance?


You have to buy a level Term for the time being. Perhaps you can insure for 5 to 10 years.

If you wait a few months, I expect a new life insurance company to offer the decreasing Term plan.

This FAQ shows you the cost of providing a monthly income of $3,000 under a Family Income benefit:

Avoid structured products

Dear Mr Tan,

What's your opinion of the above investment ? More details here..$File/Pricing%20Statement%20-%20Registration%20(with%20MM).pdf


This is a structured product. I advice people to avoid all structured products.
Read this FAQ:

Time Honoured Values

Dr. Lee Kum Tatt has spent a great deal of time studying how values affected his life, his family’s and that of others. Read some of his views on the importance of values to our lives in his Blog

Some of these articles were written many years ago but they are still valid.

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