Saturday, November 24, 2012

Get Value from your Life Insurance

A new insurance portal likes my book on Life Insurance. They bought 100 copies to give to their customers. There are many examples in the book about what are good and bad insurance products.

The portal is also keen to distribute a PDF copy of my book and are willing to pay me a royalty (to be discussed).

The book can be ordered here:

Those who are too lazy to find out are destined by lose a few ten thousand dollars, or more, on bad insurance products.

Guarantee to IMF - Appeal by Kenneth Jeyaretnam

Beware of financial traps

Most consumers are not aware that an investment linked policy or an universal life policy can be a financial trap. Beware!

Moon represents my heart (4 languages)

Here are the lyrics of the popular Chinese song "The moon represents my heart" sung in four languages

And here is the video of this song,

Friday, November 23, 2012

Letter sent on Government Service

I receive letter sent "On Government Service" without any postage. Does this mean that Singapore Post, which is now a privatised body, is delivering the letters free, or does it charge the Government for the mail delivered at a bulk special rate?

Government policy and private sector

The Government tendered the land for Executive Condo development to the private sector, because they do not want to deal with the demands of the citizens. They prefer to let the private sector deal with the conflicting demands. This does not seem to work, because the problem does come back to the Government in another form. Read this:

I prefer the Government to deal with the policy issues directly, rather than pass these issues to the private sector. This approach seems to produce quite conflicting results.

Vivo Life Policy

Here is an analysis of the Vivo Life policy, based on the start of the policy and after two years (for a policyholder who wishes to know if he should continue or terminate the policy).

Thursday, November 22, 2012

Transparency and interpretation of policy conditions

An insurance company is advertising about the transparency of their insurance policies. While this is commendable, consumers should be aware that there are other important matters that need to be considered, such as interpretation of policy conditions and exclusions.

A company's reputation in honoring claims and treating customers fairly is probably more important than the transparency of their policy wordings.

Beware of financial traps

A successful entrepreneur, who had made a lot of money, asked for my advice about a universal life policy that was recommended to him. He had to put in $1 million in savings to get $5 million of insurance protection for his family. I told him to send the benefit illustration for me to take a look but advised him to be cautious, as there is a trap waiting for him.

I recall a case, described in my book "Get Value from Your Life Insurance" where the customer was not aware about the trap in a universal life policy (see case #16 in my book). The book is available at

High income earners should also be aware of another trap in an investment-linked product that was designed to hide the high charges, until it became too late, causing the customer to lose $50,000.

A sensible advice on coping with high medical bills

I told an American friend, who had lived in Singapore for many years, that many elderly people are concerned about the high cost of health care in Singapore and had approached me to find out the "best medical plan" to cover their risk. I told my friend about the advice that I gave to the elderly. When he heard it, he remarked, "This is very sensible and yet many people do not realize it. It is nice for you to put it in simple terms." Here is my "sensible advice".

Threat of legal action

Is it really necessary for a Government Minister to get a lawyer to write to the websites over a mistake of fact, when an assistant could have pointed out the correct facts to the webmasters?

This type of heavy handed approach, while instilling fear, will cause the Government to lose the respect of the citizens.

Check on billing arrangement first

Dear Mr. Tan

My girlfriend was admitted to Raffles Hospital to do a MRI and subsequently remove a ostheoma from her forehead that was causing sharp pains and tension headaches. We went to Raffles Hospital because we wanted to have a second opinion after seeing a neurologist at TTSH that suggested my girlfriend be put on long-term pain medication which, in my opinion, does not solve the root cause of the problem and might in fact cause more problems in the future.

My gilrfriend is covered under Prudential's PruShield Premier Plus plan  with the Shield Extra rider that covers all deductables and co-insurance. As a former Financial Planner, I have always presumed that the difference between going to Government Re-structured Hospitals and Private Hospitals, with MediShield cover, is the payment of deposits during admission (i.e no need for deposit at Re-Structred Hospitals), and the rest of the bill will be billed directly to the insurer.

So imagine my shock when we were preparing for discharge from the hospital and the billing department informed us that we would have to clear the bill of $9606 (after $1250 has been deducted from her Medisave for deposit) before she can be discharged! According to Raffles Hospital, they will collect full payment from us before submitting a claim to Prudential, and only when Prudential has disbursed the claim will Raffles Hospital reimburse the amount back to us.

Luckily I was able to get a loan in the short time to cover the bill or I dread to imagine the consequencces. Now it got me thinking, what about others that might have been caught out in a similar situation but was unable to raise the amount needed? Is there a possibility of a standard practise across all hospitals regardless of Re-Structured or Private in cases where the patient is covered under a Shield Plan? As it stands now, the difference in practises between hospitals is extremely myriad and confusing even to active Financial Planners selling Shield Plans, let alone the layman.

I would love to hear your insight on this issue and what are possible ways for Insurers and Hospitals to work closer together to make seeking treatment less daunting than it already is in Singapore. 

It is better to check with the hospital on their billing arrangement, prior to admission.

Wednesday, November 21, 2012

Wrong classification of hospital claim

The policyholder was shocked that the private Shield plan paid out only $150 from a hospital bill of $6,200 in a subsidized B2 ward. This was due to a wrong classification of a large item called consumables, and the insurer did not notice it. Fortunately, a friend helped the patient to get a larger payout

Inconsiderate customer survey

I received many requests to participate in customer survey that were created by inconsiderate people. They ask 100 or more questions, but do not tell you in advance. You have to go through several webpages before you find out.

Recently, Paypal invited me to do their customer service survey. I replied to the e-mail asking someone to reply to me, to confirm that there is a person who monitors the replies. They did. I followed up with this e-mail:

QUOTE: Can you tell me how many questions are in the questionnaire?I have been invited to answer questions that show me, one page at a time, and goes on for more than 100 questions.
I did not know after going through 5 pages, that there are many more pages to go. UNQUOTE
Instead of replying to my question, Paypal got someone to call me by telephone. He started with this message, "Before we continue, I like to tell you that this call is recorded for training purpose, etc ... "

I replied, "This is rubbish" and put down the telephone. I hope that this message goes to the survey companies. They have to understand that they are wasting customer's time with their methods and damaging the goodwill of their clients.

Make it easier for people to live closer to workplace

17 November 2012

Editor, Forum Page
Straits Times

The Strategic Planning Director of the Urban Redevelopment Authority said that
more commercial and industrial hubs will be developed out side of the Central 
Business District to provide more jobs "closer to the homes" and to "reduce traffic
congestion" ("Commercial nodes distributed islandwide, ST 17 Nov 2012).

I suggest that a more holistic approach be taken to deal with the challenges 
of accommodating a larger population within a small island. Apart from 
providing jobs closer to the homes, we should make it possible for people to 
live closer to their workplace, so as to reduce time and expenses
of commuting.

For decades, the government policy was to encourage people to own their 
homes. After investing in their homes, many people have to commute long distance
to their workplace. This adds to the congestion on our public transport and roads.

Why not make it easier for people to rent their homes, by making more rental homes
available and reduce the fiscal disincentives towards renting? It will be easier for the tenants  
to move their homes closer to their workplace on the expiry of the lease. 

We can look at the example of Switzerland, where a high proportion of their citizens rent, 
rather then own, their homes.

For those who have already bought their homes, we can make it easier for them to sell their
homes and buy a new home closer to their workplace, by waiving the stamp duty and 
reducing the cost of legal and other cost of transaction.  

While this may not suit all families, some families who find this approach to be workable. We need 
various measures to work together to solve the problem holistically.

Tan Kin Lian

Stem cell therapy

This video explains how stem cell therapy is used to reverse the aging process and improve your health. It is a marketing video by a company that sells a product called Purtier. I find the video to be quite educational, but it is rather long (more than 1 hour).

This product, which is sold through multi-level marketing, is probably quite expensive. If you have personal experience on the use of this product (either positive or negative), share your views here

Tuesday, November 20, 2012

Misleading statements

Here are some statements made by some life insurance agents to convince their clients to buy their expensive insurance policies that give a poor return. Have you been misled by these statements?

Monday, November 19, 2012

IMF Pledge

I have made a donation to the fund for Kenneth Jeyaretnam to take up the issue of the IMF Pledge. He is doing it on behalf of all Singaporeans and deserve our support. Please donate generously.

Kenneth Jeyaretnam made a good summary of my views on this matter.

Sunday, November 18, 2012

Review the underwriting requirements for Medishield


14 November 2012

Editor, Voices
Today Paper

I support that approach by the Ministry of Health in 
encouraging the uninsured people, especially the elderly, to apply
for coverage under Medishield (Today, 14 November).

The main obstacles faced by these uninsured people is passing the
underwriting requirements for acceptance under the Medishield scheme.

Many of the elderly people do have some chronic conditions or
other ailments that bar them from getting the cover. We cannot expect them 
to be in the same state of good health as young people.

I suggest that the Ministry of Health should have a moratorium on 
their current underwriting requirements for a period of six months 
to allow the uninsured to join the scheme. During this moratorium, they 
can be accepted without any medical examination or health

It would be acceptable to exclude any claims for a period of three or six months 
from the date of joining. After the "waiting period", they should be allowed
to get the full benefit of the insurance.

As the elderly people are already paying a higher premium, compared to 
young people, the higher incidence of claims should not have any 
significant adverse impact on the insurance pool. 

I hope that the Ministry of Health can consult the insurance practitioners, 
especially those that do not have any vested interest, to find out the right 
approach to this challenge.

Tan Kin Lian

Mistaken about the yield

Mr. X posted in my Facebook that he is happy with his Manulife policy that gave him a return of 6% p.a. On my request, he sent the details to me. I checked the calculations and found that he was mistaken. Here is my reply.
You are paying $376.64 in annual premium each year on this policy. The surrender value, at the end of 20 years, including the bonus, is $8,434. The yield for the 20 year period is 1.06% p.a. It is a poor yield. It can hardly keep up with the rate of inflation over this period.
Although the insurance policy does provide some life insurance protection, the cost of this protection is extremely small.
Most life insurance policies offer a yield of 2% to 3% p.a. and is still considered to be a poor yield. In my talk on insurance, I advised that the benchmark for a good yield is 4% p.a. on a life insurance policy.

Choosing a good life insurance policy

Choosing a good life insurance policy is the same as choosing a good consumer product. Shop around. Compare prices, Take your time. Do not make a hasty decision. Be clear about what you want and make sure you pay the right price. Do not take the trust the statements of the sales person blindly (as they want to close the sale and earn the commission).

Helping small entrepreneurs

This article is well written and convey correctly, the problems faced by small entrepreneurs in Singapore.

Half truths about life insurance

The insurance agent makes a lot of money by selling investment-linked policies using half truths. What are these half-truths? You hear them from your agent and they sound convincing. But, if you are discerning, you can see the flaw in these half truths.

Read this article and avoid being conned.

I want to clarify that there are many insurance agents who show concern for their clients, and offer products that are suitable for the clients. Some of them are helping me in Financial Services Consumer Association (FISCA) and provide advice for a modest fee (say $100 per hour).

Some of the agents selling the "bad products" are newly trained agents, and are not personally aware that these products are bad for consumers. They are trained by their agency managers to sell the benefits, but they did not realize that these are "half truths".

They sell these "benefits" to their family members, classmates and friends, without realizing that they are locking them in a bad investment that will make them poor, while giving big profits to their insurance managers and big income to their agency managers!

Listed property firm in Germany

Will you invest in this listed property firm in Germany? There are many risks that you may be unaware of. Do not just believe the statements from the marketing agent; you have to verify them from independent sources.

Giving up power

I give full respect to President Hu Jiantao for being willing to give up full power and make it easy for the new leader to take charge.

Desire for a happy life

Here are excerpts of the speech from the new leader of China. Pay special attention to the following statement, 

"Our people have an ardent love for life. They wish to have better education, more stable jobs, more income, greater social security, better medical and health care, improved housing conditions, and a better environment.
They want their children to have sound growth, have good jobs and lead a more enjoyable life. To meet their desire for a happy life is our mission."

Our Singapore leaders can pay attention to this goal as well - not just in hollow words, but in true belief.

Unjustified voiding of motor policy

While driving in Malaysia in 2007, Mrs Lee’s car churned out black smoke at the engine bay. She stopped at a motor workshop and was advised to replace the extractor. She was assured that many cars from Singapore had made similar replacements at the workshop and they did not have any problem.

She agreed to the replacement of the extractor and was able to pass the annual vehicle inspection test, required by the Land Transport Authority, for the next four years.

In August 2012, she gave permission to her 32 year old son to drive the car. The son hit the rear of another vehicle. After lodging the accident report, Mrs Lee’s insurer discovered the replaced extractor and voided the insurance cover on the grounds that it was an unauthorized replacement. Mrs Lee was previously insured with another insurance company and had changed to the new insurer in June 2012.

The insurer rejected the repair of Mrs Lee’s car and also repudiated liability for the claim from the third party, which amounted to $9,500.

I found the voiding of the policy to be unjustified as the repair was carried out by a proper workshop in Malaysia and was necessitated due to a problem with the engine at that time. Furthermore, it had passed the vehicle inspection test conducted under the Land Transport Authority rules for the following four years.

It seemed to be quite common for an insurer to repudiate liability on questionable grounds, leaving the motorist in a difficult position.

Improve information on bus services

14 November 2012

Editor, Forum Page
Straits Times

Mr. Noel Low said that the tinted windows in buses make it difficult for
commuters to ascertain their locations on overcast days and at night
(Problems posed by tinted bus windows, ST 14 Nov).

I agree with his suggestions that the bus should contain a digital 
display to show the location of the next stop. I saw this system in the
buses in London.

My friend told me that the buses in Hong Kong and Shenzhen have the
display in English and Chinese and also the sequential stop number. They
also provided free Wi-fi service!

With the GPS system already installed in the buses for the fare system, it
should be easy to incorporate the software to provide this digital display at a
minimal cost. 

Another useful service is to provide the bus arrival time at each bus stop. This
can access the data on the locations of the all buses, that are now captured 
for the fare collection. 

I hope that the Land Transport Authority can install a tablet at each bus
stop to display the bus arrival times.

We need to improve our the use of our bus services to complement the
trains that are now over-crowded. This will encourage more people to take 
buses, and relieve the congestion on our trains and roads.

Tan Kin Lian

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