Saturday, October 30, 2010

I don't know what I am defending anymore

Young Singaporeans like Lim Zi Rui are becoming increasingly disillusioned and they’re not afraid to let it show. The 23-year-old final-year aerospace engineering student was among a 1,000-strong crowd who attended a Ministerial Forum organised on Friday by Nanyang Technological University (NTU) Students’ Union. Senior Minister Goh Chok Tong was the guest-of-honour.
Singapore General Election Portal

My view
This is perhaps the strongest and most serious feedback sent to a top government leader about the state of unhappiness of the people of Singapore.

Singapore General Election Portal [4]

As the general election gets closer, there are more interesting articles being posted in the portal. Read here:
Singapore General Election Portal. Do bookmark this portal and visit it daily.

Keep server in full service

I engaged a local IT outsourcing contract (Typent) on a monthly contact to monitor my server and look out for cyber attacks and hardware failure. Details of the arrangement are found here.

My server went down today and was out of service for more than two hours. The data center rebooted the server on my request, but it did not work. I asked Typent to went down to the site to identify and fix the problem. It was important that my servers should be fully operational. This was a useful service provided by Typent, as they are familiar with servers. The fault was identified and rectified. The server became operational within one hour. The actual cause was a failure of a hardware switch in the data center, and not with my server.

It is useful to have a service that can be called on, in case of an emergency.  Without this service, it would haev been difficult for me or my developer to fix the problem.

Buy insurance that you really need

Buy insurance that you really need, and not what the agent sells to you, as the agent wishes to make a commission on each dollar that you pay - the more, the better.  Read this article.

Looking for a good life insurance policy?

I advise consumers to look at the benefit illustration for a whole life or investment-linked policy and check that the effect of deduction does not exceed 20% of the accumulated premium at the end of 25 years. This article explains why I chose 25 years as a gauge and how I derive the benchmark of 20%. It also give the benchmark for other durations.

Direct link

Don't combine protection needs

Published in Straits Times Online, Oct 30, 2010

I REFER to Ms Pearlyn Koh's letter ("Insurance clients have different needs"; Thursday). The different needs of the clients can be best met through term insurance, medical insurance, disability insurance and other protection products that are fairly priced and targeted at these needs.
The consumer should not combine the protection needs with the accumulation of savings in the whole-life and unit-linked policies where, in many cases, 50 per cent or more of the future savings could be taken away from them.

Ms Koh asked consumers to seek advisers to help them address their needs. Consumers should be careful to pick honest advisers. I have seen quite a few instances where dishonest advisers sold the wrong product to consumers using half truths and outright lies.
I urge the authorities to set up a hotline for consumers to address their complaints about being sold products that were not properly explained to them, and were unfair in their charges.

Tan Kin Lian

Work on Saturday

Dear Mr. Tan,
As I was driving into a car park, I said hello to the security guard.  We recognize each other as I park at the same car park every week. "Hi, not working today?", he asked.  "No, not on a Saturday," I replied.  "So good", he said with an envious look on his face.

It dawned on me there and then that to some, not having to work on a Saturdays is a real perk! I've not worked on Saturdays since mid 90s and I've forgotten, until I saw the look on the security guard, the agony of having to go to work on Saturdays.

I urge our Ministers and the civil servants to please come down from their high horses to walk the ground of the commoners, who by the way are actually your masters and customers. You are to serve us, not trample over us.


Server is now up

My server was done this morning due to a switch problem at the data center. It affected the TKL website and the SGEP portal. The server is now up.

Relative and absolute

Contributed by DareToAct
Why I learnt servicing institutional clients when i was an investment manager:

When market is up, the clients look at relative performance.
When market is down, the clients look at absolute performance.

These is basic human psychology and I think those in the Government servicing the citizens need to understand this well.

Don't tell the middle income to be happy with their Executive apartments or EC ---- they are eyeing the relatively pricier condos and landed properties.

Don't tell the lower income and older workers to compare themselves to poorer people in other countries or to compare with the poorer conditions in the past --- they are absolutely poor and afraid now.


T-shirt for unemployed

Contributed by DareToAct

Order here:

When Is Gambling an Addiction?

About two percent of Americans have a gambing problem.
When is gambling an entertaining pastime,
and when does it become a compulsive addiction?
Is stock trading a form of gambling addiction?
How common is compulsive gambling, and is there a gambling gene?
Addiction expert Dr. Timothy Fong responds to reader questions about compulsive gambling.

Singapore is 17th most prosperous country: 1st or 3rd world?

I refer to the article “S’pore is 17th most prosperous country” (Today, Oct 28).
Since Malaysia is the only other country in Asean that is in the top 50, at 43rd,
I think it may be interesting to compare Singapore and Malaysia,
from the perspective of what it may all mean to ordinary citizens?
Leong Sze Hian

Both boon and bane

Singapore is striving to change itself into a metropolis, a meeting place for wealth and talent,
but the flourishing life also comes with the high cost structure of global cities.

Termination of Financial Adviser Reps

Dear Kin Lian
Recently a group of financial adviser representatives were asked to resign and given termination letters.  They were given reason like 'poor production' and rumours spread that one group was 'churning' instructed by MAS.
This group approached MOM and was turned away citing MOM does not help self employed and asked them to approach a lawyer.
Subsequently, they confront the CEO and the reasons given was the company is downsizing.  They highlighted that there are still 'poor production' people and why they are not terminated.  Furthermore, those terminated for churning, were not aware, no compliance issue etc. which the CEO cannot addressed.
The above resulted in loosing their commissions and estimated 1000 clients who to date not serviced.
Should they approached MAS, probably MAS will say its is business decision, they will not interfere.
Mr Tan, hope you can given some light to these people and I am sure there are many others in the self employed industry need justice to be done
Thank you
 Pathetic observer

Friday, October 29, 2010

Minister should set a good example on volunteerism

 Dear Mr. Tan
I wonder why we have so many Ministers in the PMO doing coordination work and some without portfolios. Where can we find the job scopes of each Ministers, including the MM and the SM and the President? Given the remuneration they are getting, I can only assume that each of their jobs is uniquely important and cannot be done by any other Ministers and Ministries. And I am also wondering what do the Ministers discuss during Cabinet meetings if they are not discussing about how the Ministries should work together and how they can cooperate to make Singapore a better place for citizens? If they could be more productive in their meetings and in their work, they can save quite a bit of money and that can be utilized for many other things. One example will be to hire more teachers and more health care providers, at higher salaries?

Just a thought but I thought the senior Ministers should lead the country in heightening of volunteerism by not accepting salaries but work as volunteers in the PMO?


Employee training and the Internet

Five levels of communication in a connected world

My Money, Their Profits

I have always wondered,
Why is it that the market can go so high,
but my own account just doesn’t go anywhere?

On Wall Street: All Reward, No Risk

Hedge fund and private equity managers, like professional athletes, risk a lot to make a lot.
But the big banks pay people millions to gamble with other people’s money.

BT: Jittery developers go low-rise on confidence


The worst- kept secret in the property market
is out in the open.
Not only are developers less upbeat about the future but a third of them actually expect prices of new homes to decline.
And market performance for the suburban residential sector may be the worst hit.

Read the following website (open after 6 pm daily)

FISCA Talk - Invest for the Long Term ($10)

Upcoming event information: 
Invest for the long term Singapore Management University (SMU), School of Economics & Social Sciences, Level 3, Seminar Room 3.1 
Date: 13 November 2010, Saturday 03:00 PM 

This event is available to all at a special price of $10 only. We are able to bring down the cost as this is a SGX-sponsored event.

You can purchase additional copies of the Financial Planning book at a special price of $10 as a participant of the talk. You won't be able to get this price anywhere else.

An outline of the talk:

  • Principles of long term investing, compounding and dollar cost averaging
  • Earn a better yield by investing in equities
  • Reduce risk by investing for the long term in a low cost, diversified fund
  • How to access information from the SGX website
  • How to get information about ETFs, REITS and  blue chip shares (with high dividend yield)
  • How to open an account with a stockbroker (using a remisier or an online account)
  • Expenses of investing
There will be practical exercises and a question & answer session.

Register at

Land banking and law firm

Dear Mr. Tan
I invested $80,000 in a land banking product with a guaranteed return of 12% after one year. The company did not pay back the return and gave a lot of excuses for the delay. They have now closed their office and left Singapore. What can I do?

The lawyer acting for the land banking company is a big reputable firm in Singapore, well connected with the government. Why did the law firm act for such a shady company? Can the law firm be held responsible, if the land banking company is actually operating a scam? Surely the law firm knew about what was happening and actually helped the land banking company to avoid being caught legally in Singapore?

I am not an expert on such matters. I believe that the Commercial Affairs Department is now investigating into '
this matter. I hope that they will look into the possibility that the law firm had acted in cohoots with the land banking company or if they were morally and ethically questinable. Although the law firm wanted to earn the large fees, they should not lend their reputation to shady or doubtful practices or to an investment scam.

Thursday, October 28, 2010

Asking for my advice

Read this FAQ

Each day, a few consumers approached me to ask me to explain the life insurance policy that is recommended by an insurance agent. If the agent, who is earning a few thousand dollars is not able to explain the policy and convince the consumer, it is not fair for the consumer to expect me to spend the time to educate them on why they should or should not buy the policy. It is time consuming to educate an ignorant consumer.

I suggest that the consumer should read my book, Practical Guide on Financial Planning (available for $12 at and attend the educational talk ($36) organised by FISCA ( The consumer can save a lot of money (maybe $100,000 or more) by avoiding the bad products. But the consumer has to spend the time and put in the effort to be educated.

If the consumer applies the benchmark of 20% deduction at 25 years, the consumer would understand why most life insurance should be avoided. The FAQs in my website explains how this can be calculated.

Seach for "benefit illustration" at

Unable to trust the agents

Dear Mr Tan,
An independent financial advisor recently reviewed the policies belong to my wife and me. She recommended us to to surrender our policies and take up her whole life policy.

Both my wife and me are not familiar with the types of policies that we had purchased. My wife took the agent's advice and surrendered her policies. I decided to learn more about insurance before I decide. However, I am still very confused on whether to surrender my policy and has decided to write in to seek your advise.

I currently hold (details of policies provided ...) I am really confused because I asked a friend who is also an agent for help. She reviewed my policy and told me not to cancel it and instead asked me to add another whole life policy costing another 4k a year!

My general advice is never to surrender a policy to take up a new policy. Each life insurance policy is costly and each time you make a change you incur the upfront cost all over again. In fact, most life insurance policies give bad value to the policy and should not be taken up in the first place. So, if you give up an existing policy to take up a new policy, you are most likely to commit a big mistake the second time.

The financial adviser is well trained to present figures (and often in a misleading fashion) to confuse and take advantage of the consumer (who is likely to make a bad decision).

Read these two FAQs

Nourishing the poor

Wong Wee Nam has written an excellent article about the income gap. Singapore fared among the worst in the world.

Is Google a monopoly?

Cheers to SDP

Hi Mr Tan,
I have always been a supporter for the opposition. It is not easy to go against the Government here, as we all know and well aware, many ended up with tragedies. These people really have the guts, courage and passion. I really salute them ! 

I still keep a book written and  signed by the late JB Jeyaretnam, who sold his books around Shenton Way about 7 years ago, when I met him. He is one of the Singapore Hero. Even my late father, who was illiterate, like his bravery, talent and sacrifices - without admitting defeat, even though he was made a bankrupt .

Hope your email and blog can reach to more people to encourage the SDP. Too bad the area I stayed is always walk over, there's no chance for voting at all. 

Cheers to SDP !

Warren Buffett's Philosophy

Here are some wonderful tips from the most successful man in the world - not only in money but also in the philosophy of life.

Warren Buffett and Bill Gates have pledged to donate most of their wealth to philantrophy. They have set up a foundation to start doing good to the world. They are also going round America to encourage other billionaires to do the same. They are also going round the world to meet the billionaires. These are wonderful people.

The Blind Girl

Beware miracle cure claims

I refer to "Baby dies after injection in the brain" (Oct 25)
and want to applaud Today for this timely news report.
I am an assistant professor in early childhood and special needs education.
Dr Noel Chia Kok Hwee

Insurance for premature baby

Hi Mr Tan,
I will like to find out if insurance companies offer policies for babies that were born premature. I have a 8-months-old baby that was born premature, and has been certified by the doctor to be healthy. I tried to apply for policies from a certain insurance company. However, the company has rejected my application "after very careful consideration." How should I proceed to get insurance for my baby?

It is better for you to save in a low cost investment fund to accumulate savings for your child. It gives you a better yield over the long term. You can use the savings for various purposes. In the case of medical care, you can see if your baby can be accepted for medishield. If not, you can take the risk on your own. If there is any serious medical condition (which is probably unlikely), the child can still be treated in subsidised ward (B2) and the cost is quite affordable, and can be paid out of Medisave and personal savings.

Read my book, Practical Guide on Financial Planning (available at

Should I continue my existing life policy?

Dear Mr Tan,
Having read your article on "How to read a Benefit Illustration (Par Policy)", I became curious about the deduction effect of my policy. With reference to ploicy year 25, the total premium amount paid at that point would be $37,680 and the effect of deductions would be $24,830. Guaranteed cash value at 25 years is $41,600 and death benefit is $100,000. Is it worth continuing with this policy?

Read this FAQ and get the information to make a decision.

SDP needs your help to step up campaign

Several investors who have lost a lot of money on the mini-bonds, Pinnacle notes and other financial products have expressed the wish to see a stronger opposition contesting the next general election. I hope that these investors and other citizens who have been unfairly treated by our system, will do their part to make this happen.

I have met with the leaders and active members of our political parties and know the difficulties that they faced in finding the people and money for the contests. Many of the leaders have made big personal sacrifices in participating in politics to offer an alternative to our citizens. Some have lost their jobs and incomes and have sued in court. But they struggled on - in their fight for a more just and equal society, for democracy, freedom of speech and human rights, for jobs at adequate wages and  a more affordable cost of living.

I want to introduce you to the Singapore Democratic Party and invite you to visit their website, Do spend some time to read and understand what they stand for, and what they are fighting for.

Some people have a negative opinion of Dr. Chee Soon Juan, due to past events and slanted coverage in the mainstream media. I have got to know Dr. Chee well in during the past two years. He is positive and sensible in his approach. He has a family with three young children. Like many ordinary citizens, they have to struggle financially to meet the high cost of living with an inadequate income stream. Dr. Chee and his family could have led a comfortable life by staying out of politics or migrating from Singapore.

I know that many people are afraid to be involved with an "opposition" political party. But if few people are willing to step forward, the situation in Singapore will continue to get worse for the ordinary people. There is one thing that you can do, in the background. You can make an anonymous donation to help any of the political party in this struggle. I urge you to step forward and be as generous as you.

Tan Kin Lian

$8 bypass operation

The Minister for Health paid $8 for a bypass operations. This is low compared to what ordinary citizens have to pay for similar or less complicated operations, even when the citizens have Medishield and supplementary private covers similar to what was bought by the Minister.

One key reason is the ability to make the right decision in our complicated system. The Minister is probably more knowledgeable, compared to ordinary citizens, on what should or should not be spent and how to make the best use of the government facilities. Furthermore, he is likely to get the best advice from doctors who will look after his interest and help him to make the best decisions under the system.

Unfortunately, this type of helpful advice is not available to ordinary citizens who might have been asked to take more expensive tests and treatments (when cheaper options are available), due to the "conflict of interest" of the medical professionals - who earn a share of the medical charges.

I hope that the Minister for Health will set up a helpline to give the friendly advice to citizens on what they should do with their treatment, so that they can get the same help as the Minister probably had. And one more point, Minister. Please staff the helpline adequately, so that patients can get through without a long wait.

Tan Kin Lian

If any reader of my blog has a personal experience of paying too much for your medical bill, in spite of your insurance coverage, please write to me at

Consumer needs advisers

MR TAN Kin Lian ('Why insurers, agents may turn a deaf ear to SM Goh's appeal'; yesterday)
is jumping to the conclusion...
His letter would carry more weight if...
He should also not make the generalisation that...
Pearlyn Koh (Ms)

My view
I hope that one of my readers will write a rebuttal to this letter. There are countless cases where the adviser can take advantage of the ignorance of the consumer to sell the the wrong product that takes away a large part of their savings - so that the adviser can earn a large commission.

Further note
I have written a reply to Ms Pearly Koh's letter. Watch out for it in the ST Online. I will publish my reply in my blog in 3 days time. Still, I hope that other readers, especially those that have been misled by insurance advisers, will write in to reply to Ms Pearlyn Koh.

Wednesday, October 27, 2010

Minister's $8 bypass operation

There are two interesting blogs about the Minister for Health's $8 bypass operation.
Singapore General Election Portal

SM Goh and Term Insurance

Here is the text of my letter to the Straits Times in response to SM Goh's call to life insurance companies to sell term insurance. The editor made some editorial changes to the published letter.


Try your luck with 2D and win a prize.

Welcome to 2D
This game is played over 6 days. Each day, the participant can guess up to 5 numbers (which can be repeated) from 00 to 99. Five numbers will be drawn each day.
The winner will be the player who has guessed the most correct numbers drawn during the 6 days.

Register an account and start to pick your numbers!!!
Prefered browser: Internet Explore

Goh Meng Seng and Election

I want to introduce Goh Meng Seng to you. He helped me in Hong Lim Park with the Chinese version of my speech. He will be standing for election under the National Solidarity Party. Read his interview in
Singapore General Election Portal. He is socialist in his approach - and so am I.

Issues for the general election

For a summary and update of the issues that are relevant to the coming general election in Singapore, do visit this website daily. Bookmark it.
Singapore General Election Portal 

What needs to be insured?

Know what needs to be insured and avoid paying premium for insurance that is not really needed or takes away too much of your money that should go into personal saving. Use this knowledge to test if your insurance agent is looking after your interest or his own commission.

More Singaporeans covered by health insurance

Why mortgage insurance is so important

A mortgage insurance ensures that the owners or occupiers of the property
can continue owning the house despite the occurrence of a catastrophic event.

Why insurers, agents may turn a deaf ear to SM Goh's appeal

If an insurer or its agent can earn so much by selling a whole-life or investment-linked policy,
why should they want to sell term insurance?
If MAS wishes to give better protection to consumers,
it should carry out a survey to find out
if the consumers are being given the proper advice and being charged fairly
on the life insurance products.

Tan Kin Lian

Tuesday, October 26, 2010

Higher inflation and higher interest rate

This article explains that the prospect of higher inflation and higher interest rate in the near future. With higher interest rate, you will have to pay more for your mortgage installments. Be careful.

Getting Revenge Against Your Insurance Company

A new Accenture survey suggests that insurance fraud may be how some consumers
retaliate against poor service from insurance companies.

Insurers' barriers to health protection

I TOTALLY agree with Senior Minister Goh Chok Tong's call to insurers
("Keep insurance affordable: SM Goh"; last Saturday),
so that Singaporeans are not under-insured.
Insurers have put many obstacles for Singaporeans to be sufficiently insured,
especially those with less than a clean bill of health.
I have been insured with NTUC Income under the Basic Medishield plan, but realise that...
Victor Goh

Big banks and Europe

Too big to fail? Europe is facing problems with some  big banks.

Benchmark for deduction - life insurance policy

I advise consumers to look at the benefit illustration for a whole life or investment-linked policy and check that the effect of deduction does not exceed 20% of the accumulated premium at the end of 25 years. This article explains why I chose 25 years as a gauge and how I derive the benchmark of 20%. It also give the benchmark for other durations. It is the SECRET that many consumers are looking for.

Pain of higher interest rate

Suppose you took a loan of $400,000 to buy a HDB flat and pay over 25 years at 2.6% interest. Your monthly installment is $1,780. If your family income (net of CPF contribution) is $4,500, the monthly installment takes away 40% of your income. You may think that it is still manageable.

Many people are paying 40% (or more) of their family income towards the mortgage payment. They use their CPF contributions and top it with their cash contribution.

What will happen if interest rate start to rise? Thirty years ago, borrowers were paying interest at 8% on their mortgage loan.

Let us just look at the impact of interest rate at 5% per annum. Your monthly would change to $2,250. This would represents 50% of your family income.  The increase in interest rate will take away 10% of their net income. Can you afford this higher payment?

What happens when interest rate goes up to 7%? The monthly payment will jump to $$2,650. This will represent  60% of your income. The jump in interest rate from 2.6% to 7% will take away 20% of your income.

Will interest rate increase to 5%? Quite likely. Will it increase to 7%. Maybe. Some countries have interest rate at 10% or higher in recent years. Who says that this may not happen?

Lesson: avoid paying a high price for your property. make sure that the price does not exceed 5 years of your income. If your income is $4,500 a month, do not pay more than $270,000 for your property. Certainly, $400,000 is too much, and too dangerous!

Tan Kin Lian

The less you know about finance the better

Everywhere you turn these days, some bigwig policymaker is talking about
the importance of financial literacy education.
The only problem is, there’s a fair amount of evidence that a lot of what we do
to teach better financial habits, like courses in high school, doesn't work.
Maybe we should ignore real-world complexity altogether
and just teach people financial rules of thumb.

The soft or confrontational approach?

A place for both the considered and the confrontational
Securities Investors Association (Singapore) with its softer approach
can rightly claim credit for its more recent achievements.
But it would be unfair to deny due recognition to those early trailblazers
whose style was more "confrontational" .
Narayana Narayana

Dealing with Wall Street

15 Inviolable Rules for Dealing with Wall Street
New York street sign
Those of you who have to interact with the sharks should learn the following rules:

CPF Life - Make it attractive

My student in SMU asked me, "Prof Tan, I find the CPF Life to be very complicated. It is so difficult to decide on choosing the four options, as they seem to work differently, with the DDA etc."

I agree with her views. I also find it to be difficult. I sent the attached article to the Straits Times two months ago, but they declined to publish it. In this article, I suggested how the Government can get out of the current mess that they have created.

Retrenchment benefit for Singaporeans giving up their citizenships?

Contributed by DareToAct

When a company restructures, often times it hires new employees from other companies and retrenches some existing employees. When it does so, it pays these employees retrenchment benefits. Some unscrupulous companies try to move their employees around to "uninspiring" jobs and hope that the employees will just quit the company and find jobs elsewhere.

Most people will agree that Singapore is run like a company. Our cabinet ministers and senior civil servants are paid like corporate executives. When Singapore Inc was having growth problem after the Asian financial crisis, our government stepped up their foreign talent strategy and "recruited" many to join Singapore Inc. Those Singaporeans who lost their jobs due to the restructuring were urged to upgrade, retrain, redesign. From what I can gather reading newspapers and other media, it seems like many "employees" of Singapore Inc are not finding it easy to cope.

Maybe the government can consider this: pay retrenchment benefits to Singaporean who wants to "resign" from Singapore Inc. It allows those who think they can have a better life elsewhere to leave with a small sum of money (they deserved it as they have contributed to Singapore Inc's growth from 3rd world to 1st) so that they can settle better into their new "job". It is also good for Singapore Inc as the CEO can now spend time doing "unproductive" work like explaining policies to those who do not have the capacity to understand or worry about being fired at AGM.

It's a win-win, no?


Monday, October 25, 2010

Promotion at i-Shop

There are several promotions of up to 40% of the books available at i-Shop.

Bundle of 5 books - 40%
Wisdom on How to Live Life - 3 books by Tommy Wong - 20%
Bundle of 4 rechargeable torchlights - 23%

Insurance woes of stroke victim's daughter .

I am a professional in the same industry and did not wish to leave the matter to others.
Policyholders should have the right to decide if they want to be represented by an agent or immediate family members when they are critically ill.
Lee Meow Hua (Ms)

A Theory of Justice - Joseph Stiglitz

Among the casualties of this whole mess, according to Stiglitz? Faith
in the legal system itself. "The legal system is supposed to be the
codification of our norms and beliefs, things that we need to make
our system work," he said. "If the legal system is seen as exploitative,
then confidence in our whole system starts eroding."

"When you say the Pledge of Allegiance, you say, with 'justice for
all," Stiglitz said. "People aren't sure that we have justice for all.
Somebody is caught for a minor drug offense, they are sent to prison
for a very long time. And yet, these so-called white-collar crimes,
which are not victimless; almost none of these guys, almost none of
them, go to prison."

"Families are as important as corporations," he said. "Keeping kids
in school, not forcing them out of their home, keeping the
community together, is certainly as important as keeping a
corporation alive."

Joseph Stiglitz

Deceptive and predatory practices

During a wide-ranging interview with DailyFinance at AOL
headquarters in New York City this week, Stiglitz, who served as
chief economist of the World Bank from 1997-2000 and is currently
University Professor at Columbia University, explained how the
availability of cheap money (thanks in large measure to former Fed
Chairman Alan Greenspan), combined with outright mortgage fraud
and deceptive and predatory lending practices put millions of people
into homes they couldn't afford and caused real estate prices to
skyrocket. That created a bubble that would inevitably pop.

My comment
Deceptive and predatory practices are also found in Singapore. They
have to be addressed by the authority.

Structure of a Life Insurance Policy

This article explains the structure of a life insurance policy in simple terms for a lay person. It helps you to understand the role of a life insurance policy and how to pay the right price for its benefits. More importantly, it helps you to avoid paying too much for a life insurance policy that can become a financial burden to you for a lifetime.

Conversation with a Job Entrant

This job entrant is being pushed to buy a life insurance policy that he does not fully understand and will take away nearly 50% of his future savings. Read how to avoid this type of risk that falls on most young people.

Sunday, October 24, 2010

Life insurance - past and present

Dear Mr Tan,
I have been following your blog for a number of years and I find that it offers good advice on financial and insurance planning. However, I cannot reconcile your views advising against buying whole life insurance policies to buying term policies. When you were heading NTUC Income, the company was actively promoting whole life insurance policies. Now you are advising against buying whole life policies because of the poor returns. Has something drastically changed ? If so, what has or have changed ? Please kindly enlighten me.
Thank you.
When I headed NTUC Income, I offered whole life policies that gave a good yield to the policyholders. I bought many of these policies for myself and my family.

If you can find a policy that gives a good yield, you can buy it. But if it gives a poor yield and takes away 40% or more of your future accumulated premiums, you should avoid it. This matter has been covered in my website and blog on many occasions. 

Read this FAQ:

A fair deal

I met a successful life insurance agent in Indonesia. He is experienced in selling health insurance and single premium products. He explained to me about how he is able to convince his clients about the value of his product.

I asked him if he would sell a whole life or investment linked product where 50% of the accumulated premium is taken away from the consumer. The policy pays a high commission to the agent. He considered this matter and replied "no". He felt that it would not be fair to give a poor deal to the consumer. He was quite surprised that this type of product is being sold in Singapore.


There are a few surveys that are still open. Please click on the "Survey" tab on the right or the following:

Layout for a Book

I am looking for a person to do the layout for my new book. I have written it in a Word document and need to have it laid out in A5 size. There are some images that need to be enhanced and touched up. You need to have a knowledge of Word and Paint. If you are interested, please send an e-mail to

TKL apps on Apple App Store

You can search for "Tan Kin Lian" in the Apple App Store and download several free apps, e.g. Tangram and Shape Quiz. These apps have a rating of 4+
The paid versions, which has 100 shapes, are also available.

Jail for Corporate Crooks

Joseph Stigliz, ex World Bank Chief Economist and 2001 Winner of Nobel prize (Economics), calls for jail time for corporate crooks and questions the wisdom behind policies favouring a few big corporations over 300 million people.


These are two executive articles. I like you to read them because Singapore bas been following the bad practices that had caused the economic downfall of America - the bad behavior of the banks and the corporate sector. Although Singapore is enjoying a healthy economy now, there is the risk the continuing problems in America will hit the rest of the world and caused the next global recession. If it happens, Singapore can be hit quite hard.

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