Saturday, October 12, 2013

Be careful about low cash values

A bank marketed a life insurance policy where the consumer has to pay $10,000 annual premium for 5 years, making a total payment of $50,000.
At the end of 10 years, the policy pays between $55,000 to $61,000 (not guaranteed) giving a yield of about 2% p.a.
The surrender value before maturity is less than $35,000 (as against $50,000 in premium paid) and this is not highlighted to the unwary consumer - although it is shown in the benefit illustration.
A consumer said that the product was sold to her as a saving plan, and she was not told that this is a life insurance policy. There is suspected mis-selling.

When I showed this policy to an independent financial adviser, his comments are:
1. This is a rip off product
2. How can MAS allow the insurer to sell such a product? How does it pass the compliance test of being fair to consumers?

Talk on Puzzles

This is a 90 min workshop. Mr. Tan Kin Lian will explain the use of the following mementos:

a) Shape Quiz
b) Tangram Quiz
c) Amazing Numbers

The fee for the talk is $10 but each participant will get 10 sets of the mememto worth $20. They can buy additional paks at $1 each (usual price is $2). This special price is available only on the day of the talk.

Teachers can use these puzzles to teach creating thinking and problem solving to their pupils.

Register here:

Asking workshop to do a third party claim

Be careful about signing a letter of authorization to ask a workshop to handle a 3rd party claim. Read

Monday, October 07, 2013

Parents, help your children to make the right start in financial planning

I wish to give this important message to parents. The little things that you do, can mean a lot to the future of your children.
They are now studying hard, to get good results for their university examinations, to look for a job. After they land a job, they will work hard (day and night) to do it well, aiming to get a promotion and an increase in salary.
A part part of their hard work is likely to be wasted. Why? Whatever they earn, whatever they save, is likely to be taken away from them, due to a bad financial decision. This happened to 30,000 people every year. 
They are going to buy a bad life insurance policy, most likely an investment linked policy, that will take away 40% of their savings. 
And you, the parent, should take a large part of the blame. Why? You did not give them good advice. 
Here is what you can do. Buy the two books written by Tan Kin Lian and give it to them as a gift. The titles are "Practical Guide on Financial Planning" and "Get Value for your Life Insurance". Each book cost only $12. 
They can save $100,000 for your child, if they read them and avoid buying the bad life insurance policies. 

Make it easy to use Wireless@SG

Printed in the Straits Times Forum, 7 Oct 2013
THE Infocomm Development Authority of Singapore (IDA) has said that there is no more government funding for the Wireless@SG hot spot network ("Wireless hot spot deployment: IDA replies"; last Friday).
I am surprised that this service, which is useful to students and low-income people, is not funded by the Government. The cost of this service should be quite modest compared to the many expensive projects that are undertaken by IDA.
During the earlier phase of the project, the sign-in process was handled by several operators using their own interfaces. This caused a big problem for people who had to log in to the hot spots provided by other operators.
In the next phase, it is better for IDA to find an operator to manage a common sign-in service that can be used seamlessly across different types of devices.
The proposed sign-in process using SIM-based authentication, which is expected to be launched next April, is useful for devices with SIM cards, but may not work with other mobile devices.
It is better to find a simple and effective system that can work across all devices, especially one that can be implemented quickly and with less expense and technical risk.
Tan Kin Lian

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