Posted at request of Huang HW
I live in front of Bishan Active Park. Carnivals and other activities are very often held on week-ends on this field. Every-time this happens, the noise is unbearable. I take my family out to avoid the noise.
My limit was really reached on Sunday(15 Nov 2010). The duration and magnitude of the noise was not particularly bad but I have two children, one having an 'O' level paper on Monday (15 Nov) and another in the midst of taking the 'A' levels.
How can my children prepare for their examinations. Many of you may be suggesting complaining to the police or my MP. But the event is LivEnabled@the Park officiated by a Minister Lim!
To add insult to injury, I can hear load knocking noises as they are clearing the site as I am writing this. Its now 40 minutes past mid-night!
Can somebody help!
Huang HW
CNA report
Monday, November 15, 2010
Sunday, November 14, 2010
Interesting articles in SGEP
There are a few interesting articles in SGEP. One is an explanation about Quantitative Easing and why it will not work and the day of reckoning will come. This is important for investors to study.
There are also some postings about election platform entitled "Its about You" and the quality candidates that will be contesting the election from the Singapore Democratic Party.
General Election Portal.
There are also some postings about election platform entitled "Its about You" and the quality candidates that will be contesting the election from the Singapore Democratic Party.
General Election Portal.
Get a Fair Deal
Here are some tips on how to get a fair deal on your insurance - what to look out for, and what to avoid.
Vitamin Account (6 year SGD equity linked structured deposit)
A customer invested $40,000 in the vitamin account in 2005. She received a payout of 4% in the first year and no subsequent payout. Five years have passed. The deposit will mature in one year's time. if there is no further payout (which is likely), the total return is 4% for 6 years or 0.66% per year. This is a poor yield for an investor who locked up the money for 6 years.
In the past, many investors have received a poor yield on various tranches of capital guaranteed structured products. I usually advice investors to avoid structured products. The can get a better yield on government bonds or a low cost investment fund.
Learn bow to get a better yield. Attend the talk on financial planning held on 4 December. Register here.
In the past, many investors have received a poor yield on various tranches of capital guaranteed structured products. I usually advice investors to avoid structured products. The can get a better yield on government bonds or a low cost investment fund.
Learn bow to get a better yield. Attend the talk on financial planning held on 4 December. Register here.
Be prudent in buying insurance
You should be prudent in buying the insurance that are really necessary and the coverage is clearly described. Do not spend money on unnecessary insurance or suffer the pain of seeing your claim rejected due to non-disclosure or misunderstanding the terms of the coverage.
www.tankinlian.com/latest.aspx
www.tankinlian.com/latest.aspx
FISCA analysis of DBS preference shares
FISCA members can refer to a brief analysis of the DBS preference shares in the FISCA website
(www.fisca.sg) under FiSCA members corner > FiSCA Evaluated Products. This is only available to FISCA members who have logged in. It is a brief analysis made by an expert who went through the 117 page document. I will write a fuller explanation later.
(www.fisca.sg) under FiSCA members corner > FiSCA Evaluated Products. This is only available to FISCA members who have logged in. It is a brief analysis made by an expert who went through the 117 page document. I will write a fuller explanation later.
Saturday, November 13, 2010
Wisdom on How to Live Life - Dr. Tommy Wong
Dr. Tommy Wong introduces his 3 books on "Wisdom on How to Live Life" in this video. You can order the 3 books here (enjoy a promotional price!).
Watch this video
Watch this video
Financial planning book - discount of 33.3%
Enjoy a 33.3% discount when you order 3 copies of the financial planning book for $24. Each book cost $12, so you are getting the 3rd copy free. You can join with your friends to buy the 3 copies and share the discount. You can also buy the 3 copies to be given away as a Gift.
Spend 3 hours to read the book and learn how you can save more than $100,000 by making the right investment (or avoiding the bad one). Invest in your financial literacy and be confident of making the right decision.
www.tankinlian.com/ishop
You can also place your order by sending an e-mail to inbox@tankinlian.com with your mailing address and mobile phone number.
Spend 3 hours to read the book and learn how you can save more than $100,000 by making the right investment (or avoiding the bad one). Invest in your financial literacy and be confident of making the right decision.
www.tankinlian.com/ishop
You can also place your order by sending an e-mail to inbox@tankinlian.com with your mailing address and mobile phone number.
Recent events and financial literacy
If you wish to understand the exchange of letters in the Straits Times on SM Goh's suggestion for insurance agents to sell term insurance, and also the merits of investing in the DBS preference shares, you can register and attend the talk on financial planning conducted on 4 December 2010.
Be educated about insurance and financial planning and be confident about taking the right decision. You will be able to understand the advice given to you by an insurance agent and to distinguish between the good and bad advice, from the perspective of the consumer.
More details here.
Be educated about insurance and financial planning and be confident about taking the right decision. You will be able to understand the advice given to you by an insurance agent and to distinguish between the good and bad advice, from the perspective of the consumer.
More details here.
Friday, November 12, 2010
Invest in preference shares
If you wish to invest in preference shares, you can read this FAQ which explains some of the terms of the preference shares. It is stored in www.tankinlian.com/ask.aspx (search for Preference Shares).
Youth gangs
There are some incidents involving youth games engaging in violence. Here are the views of readers.
www.easyapps.sg/sgep/latest.aspx
www.easyapps.sg/sgep/latest.aspx
Product Highlight Sheet for DBS Preference Shares
I was surprised to find that consumers have to read a 117 page prospectus on the DBS preference shares. I recall that, one or two years ago, MAS had a requirement for financial products to be described in a product highlight sheet. Is this requirement already implemented? Can someone working in MAS or the financial sector enlighten me?
Answer
I spoke to a MAS official. She told me that the requirement of a Product Highlight Sheet has been accepted by MAS but has not been implemented yet. Still, it would be nice for DBS to provide this PHS, rather than give a lengthy prospectus to the retail public.
Answer
I spoke to a MAS official. She told me that the requirement of a Product Highlight Sheet has been accepted by MAS but has not been implemented yet. Still, it would be nice for DBS to provide this PHS, rather than give a lengthy prospectus to the retail public.
Preference shares - perpetual and redeemable
Dear Mr. Tan,
The DBS preference shares are perpetual (i.e. have no expiry date), but are callable (redeemable) by the bank in 2020. Does it mean that DBS will return the capital investment to the investors in 2020?
REPLY
The perpetual nature allows DBS to keep the money forever and to pay the dividend at the specified rate.If DBS is in trouble, they may not pay the dividend (you have to check on this point).If DBS goes bankrupt, you may lose all of the invested sum (but this risk is very small). A preference shareholder has a higher risk that a bond holder but lower risk than DBS sharehholders.
The DBS preference shares are perpetual (i.e. have no expiry date), but are callable (redeemable) by the bank in 2020. Does it mean that DBS will return the capital investment to the investors in 2020?
REPLY
The perpetual nature allows DBS to keep the money forever and to pay the dividend at the specified rate.If DBS is in trouble, they may not pay the dividend (you have to check on this point).If DBS goes bankrupt, you may lose all of the invested sum (but this risk is very small). A preference shareholder has a higher risk that a bond holder but lower risk than DBS sharehholders.
DBS has the option to redeem the preference shares in 2020 and pay back the shareholders. They will do so, if they find that the interest rate is low and they can refinance the preference shares at lower cost. However, if interest rate goes up high, they are likely to keep the preference shares beyond 2020.
The preference shareholder can sell the shares at any time through the stockmarket, at the prevailing market price. The price will increase above par, if the market interest rate has dropped. the price will decrease if the market interest rate increases.
I have asked a financial expert to make a brief analysis and post the details in the FISCA website (www.fisca.sg). It will be available to FISCA members after login.
Medishield for a pensioner
Dear Mr Tan
Can you advise if there is a need for a pensioner to purchase Medishield. As a pensioner, the medical scheme covers 85% of the medical charges. I am worried that it may come a time that I may not be able to pay the 15% medical charges if the amounts are very large.
REPLY
Frankly, I don't see why the bill should be so large. If the cost of treatment is really expensive, you can opt for B2 ward where the cost is capped. The 15% can be paid from Medisave savings. In fact, if you have a Shield plan, it is complicated (with deductible and co-payment) that it may not cover your 15% co-payment. So, you may be paying money for nothing.
Can you advise if there is a need for a pensioner to purchase Medishield. As a pensioner, the medical scheme covers 85% of the medical charges. I am worried that it may come a time that I may not be able to pay the 15% medical charges if the amounts are very large.
REPLY
Frankly, I don't see why the bill should be so large. If the cost of treatment is really expensive, you can opt for B2 ward where the cost is capped. The 15% can be paid from Medisave savings. In fact, if you have a Shield plan, it is complicated (with deductible and co-payment) that it may not cover your 15% co-payment. So, you may be paying money for nothing.
DBS Preference Shares
Hi Mr Tan,
However the prospectus is a 117 page long document, and it is not easy to understand. Buried inside this huge document is a section on risks, but the language is extremely difficult to understand. If DBS is targeting retail customers, the risks associated with this investment should be clearly articulated. It seems that DBS has yet to learn its lesson from the Lehman saga.
I have seen a lot of ads recently on the issuance of DBS Preference Shares with a dividend rate of 4.7% (emphasised in huge fonts). I wanted to find out more and read up its prospectus on
However the prospectus is a 117 page long document, and it is not easy to understand. Buried inside this huge document is a section on risks, but the language is extremely difficult to understand. If DBS is targeting retail customers, the risks associated with this investment should be clearly articulated. It seems that DBS has yet to learn its lesson from the Lehman saga.
REPLY
I have ased a financial expert to make an analysis of this preference shares. The analysis will be available to posted in the members' section of the FISCA website and will be available only to members after login. Go to www.fisca.sgBut agents exert powerful sway over buyer's choice
Published in the Straits Times
SENIOR Minister Goh Chok Tong's observations about keeping life insurance coverage affordable
focused on the conventional practice of recommending whole life or savings plans instead of term insurance ('Keep insurance affordable: SM Goh'; Oct 23).
This practice is evident in a finding published by the Life Insurance Association of Singapore, which stated that Singaporeans are under-insured by 67 per cent, or by as much as $329,223 based on average household expenses; when term insurance is, by contrast, far more affordable.
One aspect of Mr Tan Kin Lian's comments on Wednesday ('Two key factors insurance buyers don't know') describes the inherent conflict of interest between a fatter commission and the consumer's immediate protection needs.
Usually, if a proper financial needs analysis is done prior to making the sale, a buyer's required insurance protection may well amount to hundreds of thousands of dollars. Instead, what usually happens in an insurance sale is that the recommended products, while meeting the buyer's budget constraints, do not satisfy his protection needs.
In fact, private bankers or insurance agents who sell savings plans with embedded insurance protection often use the savings elements to attract and keep consumers to a long-term commitment of their budget, thereby depriving them of a future budget for protection needs and giving them the impression that insurance protection is costly.
If responsible advisers recommend term insurance, consumers can easily meet coverage needs without resorting to high-premium, low-coverage products like whole-life or endowments.
Last Friday's reply by Mr Jeffrey Tan, president of the Insurance and Financial Practitioners Association of Singapore ('Choice of insurance plan hinges on affordability, buyer's needs'), omitted an agent's powerful influence on the client's choice.
There are three ways to better police recommendations:
* Agents should be trained to offer needs-based advice rather than just product advice.
* Conduct compliance checks on an agent's recommendations to meet protection needs; and
* Check whether a client who picks a savings plan over protection needs has been given a booklet which tells him about the benefits of term insurance within the free-look period, so he can reconsider his choice.
Brendan Yong
http://www.straitstimes.com/STForum/Story/STIStory_602320.html
SENIOR Minister Goh Chok Tong's observations about keeping life insurance coverage affordable
focused on the conventional practice of recommending whole life or savings plans instead of term insurance ('Keep insurance affordable: SM Goh'; Oct 23).
This practice is evident in a finding published by the Life Insurance Association of Singapore, which stated that Singaporeans are under-insured by 67 per cent, or by as much as $329,223 based on average household expenses; when term insurance is, by contrast, far more affordable.
One aspect of Mr Tan Kin Lian's comments on Wednesday ('Two key factors insurance buyers don't know') describes the inherent conflict of interest between a fatter commission and the consumer's immediate protection needs.
Usually, if a proper financial needs analysis is done prior to making the sale, a buyer's required insurance protection may well amount to hundreds of thousands of dollars. Instead, what usually happens in an insurance sale is that the recommended products, while meeting the buyer's budget constraints, do not satisfy his protection needs.
In fact, private bankers or insurance agents who sell savings plans with embedded insurance protection often use the savings elements to attract and keep consumers to a long-term commitment of their budget, thereby depriving them of a future budget for protection needs and giving them the impression that insurance protection is costly.
If responsible advisers recommend term insurance, consumers can easily meet coverage needs without resorting to high-premium, low-coverage products like whole-life or endowments.
Last Friday's reply by Mr Jeffrey Tan, president of the Insurance and Financial Practitioners Association of Singapore ('Choice of insurance plan hinges on affordability, buyer's needs'), omitted an agent's powerful influence on the client's choice.
There are three ways to better police recommendations:
* Agents should be trained to offer needs-based advice rather than just product advice.
* Conduct compliance checks on an agent's recommendations to meet protection needs; and
* Check whether a client who picks a savings plan over protection needs has been given a booklet which tells him about the benefits of term insurance within the free-look period, so he can reconsider his choice.
Brendan Yong
http://www.straitstimes.com/STForum/Story/STIStory_602320.html
Gideon Lee: Buyers, not agents, decide the products they want...
Published in Straits Times
I AM curious about Mr Tan Kin Lian's ardent advocacy of term insurance
over whole-life and investment-linked plans
('Two key factors insurance buyers don't know'; Wednesday) in his reply
to Insurance and Financial Practitioners Association of Singapore president
Jeffrey Tan's letter
('Choice of insurance plan hinges on affordability, buyer's needs'; last Friday).
When Mr Tan Kin Lian was the chief executive officer of NTUC Income for 20 years,
he endorsed the sale of thousands of whole-life and endowment policies
and investment-linked plans (ILP).
He isn't quite right when he states that agents prefer selling whole-life plans
instead of term insurance because they can earn significantly more commission.
Policies are usually sold and bought based on a client's budget limit
rather than the sum assured.
An agent earns the same commission for a term plan
that charges a monthly premium of $200 a month
as he does for a whole-life policy or ILP with the same premium.
Most buyers also prefer whole-life and ILP over term insurance
because they do not believe they will ever need to claim on their policy,
especially for critical illnesses, and want to get their premiums back.
Almost every client of mine asks me how he can retrieve his premiums
if nothing happens to him.
Mr Tan Kin Lian inflates the commission an agent earns.
If agents earn as much as he thinks,
recruitment shouldn't be an insurance manager's biggest headache as it is now.
Mr Tan is also wrong
when he states that distribution costs are paid to agents for the advice they give.
Distribution cost, as the name suggests, is commission paid for selling the product
and is not an advisory fee.
An agent is paid according to the amount of money he brings in.
To offer an analogy, a doctor's charge for consultation
is separate from the income he earns through selling medicine in his clinic.
In the agent's case, the consultation is free.
It is not the agent's fault if a customer needs more cover.
Mr Tan Kin Lian's one-policy-fits-all-needs solution
does not help clarify the different insurance requirements of buyers.
Gideon Lee
My comments
I hope that some consumers will write to the Straits Times to show how they have been misled by insurance agents into buying the bad financial product.
I will be writing a reply to the points raised by Gideon Lee.
Churning of Life Insurance Policies
Some life insurance agents 'churn' their client's policies to earn a fat commission again. Does this practice apply to unit trust, where the upfront commission is 3% of the invested amount? Here are my views. Consumers should be aware about this practice and avoid being churned by the agent.
www.tankinlian.com/latest.aspx
www.tankinlian.com/latest.aspx
Thursday, November 11, 2010
Financial Planning Talk - 4 Dec 2010
I am giving a talk on financial planning on Sat 4 Dec from 3 tp 6 pm. Details can be found at http://www.fisca.sg/ (Events). I encourage consumers to attend this talk and learn about the basics of financial planning. This is specially suitable for young people entering the workforce for the first time. By being educated, you will avoid being misled into buying the wrong life insurance policy that will take away a large proportion of your future lifetime savings. The book, Practical Guide on Financial Planning, will be given free to all participants.
Spend 3 hours and $36 ($10 for FISCA members) and avoid making a bad mistake. Parents should encourage their children (who are entering the workforce) to attend this talk.
Tan Kin Lian
Spend 3 hours and $36 ($10 for FISCA members) and avoid making a bad mistake. Parents should encourage their children (who are entering the workforce) to attend this talk.
Tan Kin Lian
Talk to NTU Risk Management Society
I gave a talk to 50 members of the risk management society of NTU. The seminar room was packed. I told the following stories which they found to be fascinating:
Invest in Gold Bars
Dual Currency Deposit
Land Banking
I hope that they remember the stories and learned about the risk of being cheated or exposed to high risk that they were not aware of. I also told them to share these stories with their parents, so that they will not be misled into bad investments.
I encourage my readers to attend the talk on financial planning, and to encourage your friends to attend the talk. Spend 3 hours and $30 and avoid losing $30,000 or more through a bad investment. Invest in your financial education. Encourage your friends to make this investment too!
Tan Kin Lian
Invest in Gold Bars
Dual Currency Deposit
Land Banking
I hope that they remember the stories and learned about the risk of being cheated or exposed to high risk that they were not aware of. I also told them to share these stories with their parents, so that they will not be misled into bad investments.
I encourage my readers to attend the talk on financial planning, and to encourage your friends to attend the talk. Spend 3 hours and $30 and avoid losing $30,000 or more through a bad investment. Invest in your financial education. Encourage your friends to make this investment too!
Tan Kin Lian
Visit to Masdar City
I visited Masdar City, which is near the Abu Dhabi airport to view the development. It is one large construction site. The project has been delayed. I was not able to get an appointment for someone to show me around the site (as I did not make prior arrangement). So, it was quite disappointing. It may take a few more years before this development, which is billed as a city of the future, will be ready.
Political parties and general election
What are the political parties in Singapore doing to prepare for the general election? Go to General Election Portal and see a list of articles. They are quite active!
Choice of insurance plan and cost
Here is a letter from the President of the association representing insurance agents about the choice of insurance plan and a reply from Tan Kin Lian
www.tankinlian.com/latest.aspx
www.tankinlian.com/latest.aspx
Wednesday, November 10, 2010
Resource materials in TKL website
My website (www.tankinlian.com) contain useful resource materials. They are kept in PDF documents under the Information tab.
I am personally the biggest user of the resource materials. I get questions from consumers and journalists on a variety of topics. I refer to the resource materials to get the information that is needed to reply to the questions.
I also use the resource materials to write my books, articles, letters to the newspapers and to prepare for the educational talks that I give on many topics.
I am able to access the resource materials when I am overseas. I just go to the website, type in the keyword and get the PDF that I need.
I encourage corporations to have an active website to contain information for their customers and employees. This will make the corporation more accessible and can help to build up the business of the corporation. It is a wonderful tool that should not be neglected.
Tan Kin Lian
I am personally the biggest user of the resource materials. I get questions from consumers and journalists on a variety of topics. I refer to the resource materials to get the information that is needed to reply to the questions.
I also use the resource materials to write my books, articles, letters to the newspapers and to prepare for the educational talks that I give on many topics.
I am able to access the resource materials when I am overseas. I just go to the website, type in the keyword and get the PDF that I need.
I encourage corporations to have an active website to contain information for their customers and employees. This will make the corporation more accessible and can help to build up the business of the corporation. It is a wonderful tool that should not be neglected.
Tan Kin Lian
Past general elections in Singapore
Go to SGEP, select "Resources" and view the various resource materials about the past general elections in Singapore.
Extract the key information from a webpage
I wish to write a script (i.e. computer program) that can go to a webpage, extract the HTML code, and remove all advertisements, graphics and supplementary information - leaving only the key content of that page. This script will need an understanding of the structure of the HTML page and also some artificial intelligence. I will send the URL of the webpage to this script and it should return the text contained in the webpage.
If any expert knows how to write this script or wish to give it a try, send an e-mail to kinlian@gmail.com.
If any expert knows how to write this script or wish to give it a try, send an e-mail to kinlian@gmail.com.
MacDonald's Monopoly Promotion
Dear Mr Tan,
Recently Mcdonalds is having Monopoly promotion. When we buy their value meal they will issue playing cards to us. One of the prize is a car Kia Soul 1.6L (auto) worth $50000. In order to win the car we have to collect 3 cards namely Holland Road M318, Orchard Road M319, Ardmore Park M320
I have collected two cards Holland Road M318 and Ardmore Park M320. I need the 3rd card Orchard Road M319 to win the car. I will willing to share the money from the sale of the car equally between the holders of the three cards, after making a donation of $5000 to FISCA.
I know it will not be easy to win the car, but if we join together, we will have a much better chance to win together.
HXS
My comment
If anyone has the Orchard M319, please send an e-mail to kinlian@gmail.com. But I guess that this may be the most rare card.
Financial Planning book at 40% discount
You can enjoy a 40% discount on the financial planning book and other puzzle books through the 5 book bundle promotion at www.tankinlian.com/ishop.
Two key factors insurance buyers don't know
Published in the Straits Times Forum Page
I REFER to the reply by Mr Jeffrey Tan,
president of the Insurance and Financial Practitioners Association of Singapore
('Choice of insurance plan hinges on affordability, buyer's needs'; last Friday).
In buying a product, the consumer should be aware of its price.
This is especially important for a life insurance policy,
which requires a large sum of money to be paid over many years.
For most people, this could be the next biggest financial commitment
after the mortgage on their home.
Consumers should learn to read the benefit illustration of the life insurance policy
and look for two key items: distribution cost and accumulated savings.
The distribution cost is
the amount that is subtracted from the consumer's savings
to pay for the advice given by the agent.
Typically, the distribution cost takes away one to two years of the premium.
So, if the premium is $500 a month, the distribution cost could amount to $12,000.
Is the insurance agent's advice worth that much to the consumer?
The deduction results in a portion of the accumulated savings
being taken away from the consumer.
This portion could be more than 50 per cent after 30 years.
If the accumulated savings is $300,000,
the consumer could be giving away more than $150,000.
The net yield earned on the savings is usually insufficient to cover inflation.
So, how can the agent claim to be giving good advice to a consumer
by selling this policy?
In his reply, Mr Tan stated that not all term insurance policies
pay a lower commission than traditional whole-life and investment-linked policies.
I disagree.
If a consumer buys a term insurance to cover $300,000,
the premium should be less than $400 a year.
The agent may be able to earn $400 in commission over a few years.
If the agent sells a whole-life or investment-linked policy,
the agent may be able to earn more than several thousand dollars in commission.
Unsurprisingly, most agents prefer to sell the policy
that pays a fatter commission.
They tell consumers to avoid a term insurance policy because it does not give any return.
However, consumers are not aware of how much they will be losing
in a whole-life or investment-linked policy.
Tan Kin Lian
http://www.straitstimes.com/
('Choice of insurance plan hinges on affordability, buyer's needs'; last Friday).
In buying a product, the consumer should be aware of its price.
This is especially important for a life insurance policy,
which requires a large sum of money to be paid over many years.
For most people, this could be the next biggest financial commitment
after the mortgage on their home.
Consumers should learn to read the benefit illustration of the life insurance policy
and look for two key items: distribution cost and accumulated savings.
The distribution cost is
the amount that is subtracted from the consumer's savings
to pay for the advice given by the agent.
Typically, the distribution cost takes away one to two years of the premium.
So, if the premium is $500 a month, the distribution cost could amount to $12,000.
Is the insurance agent's advice worth that much to the consumer?
The deduction results in a portion of the accumulated savings
being taken away from the consumer.
This portion could be more than 50 per cent after 30 years.
If the accumulated savings is $300,000,
the consumer could be giving away more than $150,000.
The net yield earned on the savings is usually insufficient to cover inflation.
So, how can the agent claim to be giving good advice to a consumer
by selling this policy?
In his reply, Mr Tan stated that not all term insurance policies
pay a lower commission than traditional whole-life and investment-linked policies.
I disagree.
If a consumer buys a term insurance to cover $300,000,
the premium should be less than $400 a year.
The agent may be able to earn $400 in commission over a few years.
If the agent sells a whole-life or investment-linked policy,
the agent may be able to earn more than several thousand dollars in commission.
Unsurprisingly, most agents prefer to sell the policy
that pays a fatter commission.
They tell consumers to avoid a term insurance policy because it does not give any return.
However, consumers are not aware of how much they will be losing
in a whole-life or investment-linked policy.
Tan Kin Lian
http://www.straitstimes.com/
What is "churning" ?
Dear Kin Lian
I hope you could consider publishing this in your Blog to clear the doubts as currently I personally feel that this definition is very vague.
What is the definition of 'CHURNING'
Currently it seems there is no industry standards to the definition of 'CHURNING'.
Scenario 1, if a investor purchased a unit trust paid 3% upfront and made profit of 10% in less than 1-2 months and decided to sell and reinvest in another fund, and does not mind paying another 3% to the adviser, is this "Churning"?
Scenario 2, a investor purchased a unit trust paid 3% upfront, loss 1% and sell the investments, reinvest again and pay another 3% upfront, this is definitely 'CHURNING'.
In some firms, they take Scenario 1 as 'churning'. Is this the industry practise?
Even currently in investment platforms there are 'WRAP' and 'NON WRAP' fees. 'WARP' are those which charges as invester x% annually and when they switch there is no up front whereas 'NON WRAP' there are up-front. Again, for 'WRAP' fees it can vary from 0.5% to as much as 1.5% annually. Some firms take 'NON WRAP' as CHURNING, so if this is true that why implement such facility. Must as well remove it.
As a long term investor, why should I go for 'WRAP' fees if I decide to just remain in 1 good fund. By paying 1.5% annually, it deplict my value and why should I let the adviser and firm earn it.
Banks in the past adopt 'NON WRAP' whilst FA Firms tend to discourage it and make it mandatory to go 'WRAP'. Why? Maybe they need the 'WRAP FEES' to maintain their business which is ridiculous.
Mr Tan, it will be good if you could maybe rope in industry experts or the blog members to comment on this. This issue has in the past and now, caused advisers to be forced to resign and terminated because of scenario 1.
Concerned Investor
My view
The investor has to pay an upfront fee of 3% to 5% or an annual wrap fee of 1.5% to invest in a unit trust. These charges are rather high and depletes the return to the investor. But, they are good fees shared by the adviser and the FA firm. There is now a dispute between the adviser and the FA firm in how to share the proceeds of the fees.
Churning is a term used to describe the activity of an agent giving advice to the client to terminating one insurance policy and take up a different policy. It allows the agent to earn the high upfront commission (of 1 to 2 year's premium) again. It harms the interest of the consumer.
It can be used to describe the activity of switching from one fund to another. In this case, the cost to the consumer is 3% to 5% of the premium, and not a large percentage. However, if this activity is carried out several times in a year, the harm can be quite large. So, it should be treated as churning also.
Investing in a unit trust should be a long term investment. The investor should keep the investment for a few years, before making a switch for the purpose of asset allocation. It should not be done earlier.
If the consumer wishes to speculate in the stock market for short term gains, the consumer should select the liquid blue chip shares. The cost of trading is only 0.3% of the invested sum and has to be paid on the way in, and on the way out. The speculation should not be made through a fund, which is for long term investment.
Tuesday, November 09, 2010
Abu Dhabi and Masdar
I have visited Dubai a few times but have not yet visited Abu Dhabi, which is the capital of the United Arab Emirates and just 1 and 1/2 hour drive from Dubai. Someone told me that Abu Dhabi is rather conservative and is quite different from the open and cosmopolitan culture in Dubai.
Abu Dhabi has a bold project to develop a new city, called Masdar. It is being marketed as what a modern city should be. It uses renewable energy and has an underground system using automated, driver-less personal vehicles. This allows the pedestrians to walk at the street level free of vehicles.
I heard that the development of Masdar is behind schedule - still, I am interested to take a look.
Abu Dhabi has a bold project to develop a new city, called Masdar. It is being marketed as what a modern city should be. It uses renewable energy and has an underground system using automated, driver-less personal vehicles. This allows the pedestrians to walk at the street level free of vehicles.
I heard that the development of Masdar is behind schedule - still, I am interested to take a look.
Win-win approach
I found an interesting example of the win-win approach in Dubai.
During the global financial crisis, Dubai needed a few billion dollars to pay off the short term credit that was pulled out by the banks. They had to turn to Abu Dhabi for help. In return for the financial assistance, Dubai agreed to rename Burj Dubai (which is currently the tallest building in the world) to Burj Khalifa, i.e. after the name of the Ruler of Abu Dhabi.
Burj Dubai was supposed to be a landmark in Dubai, so the change of name cause the loss of this iconic name. They found an interesting solution. Burj Khalifa is next to Dubai Mall, which is a prominent shopping mall in Dubai. So, the Metro station that serve this location is now called Burj Khalifa Dubai Mall, which allow the name of Dubai to be retained for this icon.
During the global financial crisis, Dubai needed a few billion dollars to pay off the short term credit that was pulled out by the banks. They had to turn to Abu Dhabi for help. In return for the financial assistance, Dubai agreed to rename Burj Dubai (which is currently the tallest building in the world) to Burj Khalifa, i.e. after the name of the Ruler of Abu Dhabi.
Burj Dubai was supposed to be a landmark in Dubai, so the change of name cause the loss of this iconic name. They found an interesting solution. Burj Khalifa is next to Dubai Mall, which is a prominent shopping mall in Dubai. So, the Metro station that serve this location is now called Burj Khalifa Dubai Mall, which allow the name of Dubai to be retained for this icon.
Capital controls to stop asset bubbles
Asian economies may need to turn to capital controls as quantitative easing by the U.S. threatens to spur asset bubbles in the region’s stock, currency and property markets, the World Bank said.
Any curbs should be “targeted,” temporary and tailored to address specific problems, Sri Mulyani Indrawati, a World Bank managing director, said in an interview. This could include countries tying up funds for as long as a year to help limit hot-money, she said.
http://www.bloomberg.com/news/2010-11-08/world-bank-says-asia-may-need-capital-controls-to-curb-fed-created-bubbles.html
Any curbs should be “targeted,” temporary and tailored to address specific problems, Sri Mulyani Indrawati, a World Bank managing director, said in an interview. This could include countries tying up funds for as long as a year to help limit hot-money, she said.
http://www.bloomberg.com/news/2010-11-08/world-bank-says-asia-may-need-capital-controls-to-curb-fed-created-bubbles.html
Interesting topics in SGEP
There are several interesting topics and letter posted in the Singapore General Election Portal by Gerald. You can choose those that interest you and read them. www.easyapps.sg/sgep/latest.aspx.
Quantitative Easing - impact on Singapore
Someone asked for my views about the impact of quantitative easing on the Singapore economy. I must confess that I am not an economic expert but I believe that most economists are also unsure about the likely impact of these measures.
My own views are pessimistic, as expressed in this article about the Global Economic Turmoil. The low interest rate, stimulus package and quantitative easing adopted in America is causing asset bubbles around the world. In the short term, stock markets and property prices have shot up, but these are likely to cause a lot of problems in the months ahead.
America hopes to create more jobs with these measures. They expect the jobs to be created with the recovery of economic growth. I expect that these measures will fail to create the jobs, due to globalization, wide disparity of income, uncertainty of the future and other factors. If America goes into a double dip recession, it will reduce demand for the rest of the world and cause problems in the emerging countries that depend on consumer demand in America. It does not make sense to ask give money to a debtor to spend.
The long term solution is an economic system that can provide jobs for everyone who is willing to work. This will not come with the current economic structure, which is based on competition. It requires a new approach to distributing the work opportunities in a fair and regulated market, which will continue to be a free market in giving choice to workers and employers. My ideas are contained in this article on Creating Employment.
In the short term, the asset markets are booming, due to cheap money. You can join the party for the fun. But, like all bubbles, the pain has to come afterwards.
Tan Kin Lian
My own views are pessimistic, as expressed in this article about the Global Economic Turmoil. The low interest rate, stimulus package and quantitative easing adopted in America is causing asset bubbles around the world. In the short term, stock markets and property prices have shot up, but these are likely to cause a lot of problems in the months ahead.
America hopes to create more jobs with these measures. They expect the jobs to be created with the recovery of economic growth. I expect that these measures will fail to create the jobs, due to globalization, wide disparity of income, uncertainty of the future and other factors. If America goes into a double dip recession, it will reduce demand for the rest of the world and cause problems in the emerging countries that depend on consumer demand in America. It does not make sense to ask give money to a debtor to spend.
The long term solution is an economic system that can provide jobs for everyone who is willing to work. This will not come with the current economic structure, which is based on competition. It requires a new approach to distributing the work opportunities in a fair and regulated market, which will continue to be a free market in giving choice to workers and employers. My ideas are contained in this article on Creating Employment.
In the short term, the asset markets are booming, due to cheap money. You can join the party for the fun. But, like all bubbles, the pain has to come afterwards.
Tan Kin Lian
Dubai - hassle free for travellers
Dubai is the only place that I had visited, which does not require the traveler to complete an immigration or custom form. This archaic practice, first started more than a century ago, continued is continued mindlessly by government officials in many countries. I am thankful that the European countries have at least simplified their entry forms.
Singapore can learn a lesson from Dubai and get rid of the immigration form that visitors are required to complete in entering Singapore. The main purpose of the form is for tracking of tourist statistics. Are the statistics so important to add to the hassle for visitors?
If we are interested to know their country of origin, look at their passport. There is already a lot of information that is captured on the magnetic strip of the passport. If we want to know how many tourist stay in our hotels, we can get the information from the occupancy rates.If we want to know how many people are on group tours, ask the travel agencies. If we want to know how many people are first time visitors to Singapore, we can match the passport numbers against our huge database. We need to check anyway for the terrorists that are not allowed to enter our country.
It is time for the Singapore immigration to get rid of the dubious entry form. And perhaps, they can encourage the Asean countries to do the same, so as to make it hassle free for people to travel around Asean and promote tourism.
Tan Kin Lian
Now in Dubai on a business trip
Singapore can learn a lesson from Dubai and get rid of the immigration form that visitors are required to complete in entering Singapore. The main purpose of the form is for tracking of tourist statistics. Are the statistics so important to add to the hassle for visitors?
If we are interested to know their country of origin, look at their passport. There is already a lot of information that is captured on the magnetic strip of the passport. If we want to know how many tourist stay in our hotels, we can get the information from the occupancy rates.If we want to know how many people are on group tours, ask the travel agencies. If we want to know how many people are first time visitors to Singapore, we can match the passport numbers against our huge database. We need to check anyway for the terrorists that are not allowed to enter our country.
It is time for the Singapore immigration to get rid of the dubious entry form. And perhaps, they can encourage the Asean countries to do the same, so as to make it hassle free for people to travel around Asean and promote tourism.
Tan Kin Lian
Now in Dubai on a business trip
Water, Water Everywhere
Singapore leads the world in developing water resources. However, it requires the use of energy, which is also costly. Read:
http://www.newscientist.com/projects/ibm/artwater2010
http://www.newscientist.com/projects/ibm/artwater2010
Monday, November 08, 2010
FISCA Talk - Consumer Guide to Insurance
I have received several requests from readers to conduct a talk on insurance. In response to this request, I have prepared the outline of the talk here. The fee for the talk will be $20 (for FISCA members) and $30 (for public).
I wish to carry out a survey to find out how many people are interested in this talk. Please reply to this survey. If there is sufficient interest, I will ask FISCA to organise this talk.
I wish to carry out a survey to find out how many people are interested in this talk. Please reply to this survey. If there is sufficient interest, I will ask FISCA to organise this talk.
Different Types of ETFs
ETFs have evolved over the years, becoming more complex. Investors considering ETFs should evaluate each investment closely and not assume all ETFs are alike. In the last few years, a number of leveraged and inverse ETFs have been introduced to the market that are very different from the traditional variety of ETFs.
www.tankinlian.com/ask.aspx
www.tankinlian.com/ask.aspx
Is life insurance good or bad?
Life insurance can be good and can be bad. It is good if it is priced fairly and the consumer pays a premium rate that reflects the risk and a reasonable margin for the insurance company to pay its expenses and make a fair profit. It provides a mechanism to pool the risk and pay a compensation to those who suffer the insured event.
It is bad if the insurance is priced in a predatory manner, over-charges the consumer and is sold with inaccurate and misleading statements - so as to allow the insurance agent to earn a fat commission and the insurance company to make a fat profit.
Read this article.
It is bad if the insurance is priced in a predatory manner, over-charges the consumer and is sold with inaccurate and misleading statements - so as to allow the insurance agent to earn a fat commission and the insurance company to make a fat profit.
Read this article.
General Election in Singapore - latest news from the Internet
Visit the General Election Portal to read about the latest views in the Internet on the coming general election in Singapore..
How to say "No" to an insurance agent
t is important for a consumer to be able to say "No" to a life insurance agent. Here are some tips on how to say "No". They are especially important for young people who are starting work for the first time. The ability to say "No" in a nice way can save you a lot of money and protect your financial well being.
Consumer finance portal launches here
A NEW consumer banking website goes live today, that will allow users to compare personal finance products across banks here. Its Singapore-based founder, Giora Kanner, said that MoneyLine.sg is aimed at helping people sift through the array of bank products here, such as credit cards and insurance policies. The site's search engine will compare products based on user criteria, and allows users to filter the results for finer results, he said. He hopes the site will fill a gap in the market for a centralised portal listing the different bank products here. MoneyLine.sg is open to users for free, |
REad the BT article for free after 6 pm:
Tangram and Shape Quiz
Here are some interesting shapes that can be formed from tangram (7 pieces) and shape quiz (4 pieces). They are interesting and challenges the mind. The book, with 100 shapes, can be bought from www.tankinlian.com/ishop. Suitable for children, adults and seniors and as a Gift! You enjoy a discount of 40% as part of the 5 book bundle.
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| Add caption |
Creating employment
Many countries faced the challenge of creating employment for the large number of unemployed, under-employed and new entrants to the work force. This challenges will continue to be difficult under the current economic system. In this article, I have some suggestions of the changes that can be made to create more job opportunities and build a better and more sustainable environment for the future.
Tan Kin Lian
Bank interest rate - discriminatory practices
Some banks offer higher interest rate to attract new deposits and give a lower interest for existing deposit. A customer can earn the higher interest rate by taking the trouble to withdraw the deposit and re-deposit it with the same bank. If the customer expresses the intention to take this trouble, the bank will usually relent and offer the higher interest rate.
The bank is willing to pay a higher interest rate (compared to the miserably low interest rate that is offered to their existing customers). But they hope that some customers are not aware about the difference, or that they do not wish to take the trouble, or do not know how to take the action. The bank hope to extract the maximum profit from these customers.
I consider this practice to be discriminatory and unfair, and goes against the ethos of fair treatment of customers. Some people say that this type of practice is predatory and dishonest. I believe that it has some of these negative elements. Even if it is not illegal, it is quite wasteful to get customers to go through a lot of hassle to enjoy a more adequate interest rate and cause unproductive work for their own staff.
I hope that the Monetary Authority of Singapore will tell the banks that they (the regulators) frown on type of unproductive and discriminatory practices. I am sure that the banks will heed the message from the regulators.
Tan Kin Lian
The bank is willing to pay a higher interest rate (compared to the miserably low interest rate that is offered to their existing customers). But they hope that some customers are not aware about the difference, or that they do not wish to take the trouble, or do not know how to take the action. The bank hope to extract the maximum profit from these customers.
I consider this practice to be discriminatory and unfair, and goes against the ethos of fair treatment of customers. Some people say that this type of practice is predatory and dishonest. I believe that it has some of these negative elements. Even if it is not illegal, it is quite wasteful to get customers to go through a lot of hassle to enjoy a more adequate interest rate and cause unproductive work for their own staff.
I hope that the Monetary Authority of Singapore will tell the banks that they (the regulators) frown on type of unproductive and discriminatory practices. I am sure that the banks will heed the message from the regulators.
Tan Kin Lian
Sunday, November 07, 2010
Managing personal risk - importance of savings
I wish to recommend this article to the lay person. It is about managing personal risk and the importance of having savings and getting an adequate yield on the savings. Many life insurance agents will give bad advice to consumers and get them to buy a life insurance policy that gives a poor yield or charges too much for the insurance cover. The agent has a conflict of interest. They can earn a higher commission by selling an expensive policy to the consumer.
Read the relevant FAQs in my website, www.tankinlian.com/ask.aspx. Read my book, Practical Guide on Financial Planning (click on iShop at the right panel).
Read the relevant FAQs in my website, www.tankinlian.com/ask.aspx. Read my book, Practical Guide on Financial Planning (click on iShop at the right panel).
Cost of term insurance
Dear Mr. Tan,
I just talk to 4 different insurance companies asking for their term insurance. One company try to sell me life insurance when I asked for term and I have to pay 4.5K per year. Even for term insurance, the price quoted is not that cheap comparable to life insurance.
Is it true that Critical illness only can be bought with a Life Insurance with Death Coverage and not as a stand alone policy? This is what an agent told me. Xan I really get a term policy valued at 500K at around 1K plus per annum as reported in the papers?
REPLY
You can buy a stand alone term and a stand alone critical illness cover under the SAF group insurance policy, if you are a reservists. Read this FAQ: http://tankinlian.com/admin/file.aspx?id=116
A term insurance for $500,000 cost about $768 a year. You can buy critical illness separately. But you do not need to insure a large sum. An insurance of $50,000 or $100,000 for critical illness is sufficient, as it is supplemented by term insurance.
Read my book, Practical Guide on Financial Planning and attend the educational talk conducted by FISCA. They are meant to educate consumers to make a better choice.
Read the FAQs in www.tankinlian.com/ask.aspx to find out why many agents are not giving the proper advice to consumers, due to their conflict of interest.
I just talk to 4 different insurance companies asking for their term insurance. One company try to sell me life insurance when I asked for term and I have to pay 4.5K per year. Even for term insurance, the price quoted is not that cheap comparable to life insurance.
Is it true that Critical illness only can be bought with a Life Insurance with Death Coverage and not as a stand alone policy? This is what an agent told me. Xan I really get a term policy valued at 500K at around 1K plus per annum as reported in the papers?
REPLY
You can buy a stand alone term and a stand alone critical illness cover under the SAF group insurance policy, if you are a reservists. Read this FAQ: http://tankinlian.com/admin/file.aspx?id=116
A term insurance for $500,000 cost about $768 a year. You can buy critical illness separately. But you do not need to insure a large sum. An insurance of $50,000 or $100,000 for critical illness is sufficient, as it is supplemented by term insurance.
Read my book, Practical Guide on Financial Planning and attend the educational talk conducted by FISCA. They are meant to educate consumers to make a better choice.
Read the FAQs in www.tankinlian.com/ask.aspx to find out why many agents are not giving the proper advice to consumers, due to their conflict of interest.
Online courses
Learning in Dorm, Because Class Is on the Web
Online education is finding its way into more colleges,
many of them public institutions facing tight budgets.
many of them public institutions facing tight budgets.
Guiding a child to financial independence
Parents of adult children face all types of challenges, even in the best of times, but the tough labor market for young people can make it even more difficult.
Here are some tips:
http://www.nytimes.com/2010/11/05/business/businessspecial5/05LAUNCH.html
Here are some tips:
http://www.nytimes.com/2010/11/05/business/businessspecial5/05LAUNCH.html
Measure of economic progress
U.S., China and eating soup with a fork
Are economists the world over using an outdated tool to measure economic progress?
They are widely used to compare standards of living in one country with those in another
but critics say GDP is too narrow to be a realistic indicator.
Joseph Stiglitz, the Nobel-prize winning American economist, has complained that
world leaders make a fetish out of it and suffer from GDP-obsession.
http://blogs.reuters.com/great-debate/2010/10/29/u-s-china-and-eating-soup-with-a-fork/
Are economists the world over using an outdated tool to measure economic progress?
They are widely used to compare standards of living in one country with those in another
but critics say GDP is too narrow to be a realistic indicator.
Joseph Stiglitz, the Nobel-prize winning American economist, has complained that
world leaders make a fetish out of it and suffer from GDP-obsession.
http://blogs.reuters.com/great-debate/2010/10/29/u-s-china-and-eating-soup-with-a-fork/
Reply to Jeffrey Tan, President of IFPAS
I am looking for some consumers to come forward and send a reply to the letter from the President of the association representing the life insurance agents. http://www.straitstimes.com/STForum/Story/STIStory_599561.html
Jeffrey Tan said consumers to get the advice of the insurance agent who will help them to select the most suitable products to meet their needs. From the questions sent to me, it seemed that many consumers were confused about the product that has been sold to them, and when they learned at a later date about the poor yield on the life insurance policy, they regretted having made a bad decision.
If you have suffered this unfortunate situation, I ask you to come forward and write a letter in reply to Jeffrey Tan. This will help to clean up the bad practices where many insurance agents continue to take advantage of the ignorance of the consumers.
If you are willing to share your experience, you can write a draft to me at kinlian@gmail.com. I will help you to polish up the letter.
Tan Kin Lian
Jeffrey Tan said consumers to get the advice of the insurance agent who will help them to select the most suitable products to meet their needs. From the questions sent to me, it seemed that many consumers were confused about the product that has been sold to them, and when they learned at a later date about the poor yield on the life insurance policy, they regretted having made a bad decision.
If you have suffered this unfortunate situation, I ask you to come forward and write a letter in reply to Jeffrey Tan. This will help to clean up the bad practices where many insurance agents continue to take advantage of the ignorance of the consumers.
If you are willing to share your experience, you can write a draft to me at kinlian@gmail.com. I will help you to polish up the letter.
Tan Kin Lian
Bread Talk and Bread Life
I saw two shops in a mall in Jakarta that have similar name. Bread Talk was probably the original company. Bread Life follows the same concept. The Bread Life shop has many customers, and the Bread Talk shop was almost empty.
Cheated on inferior products
A consumer bought a few boxes of local sweets in a store at 8 yuan. Later, she saw the same product sold at another store for 3 yuan. She bought a few boxes at the lower price to average down. She was told later that the cheaper product could have expired. Her immediate remark was - I have been cheated. She felt that it the product had passed the expiry date, the store should not have sold the product to her without telling her.
Cheating is to sell a product without disclosing relevant information or providing misleading information about the product to the consumer.
If a consumer can felt cheated of a few dollars in a consumable product that has expired, how would the consumer feel if he or she has been sold a financial product that locks out the savings for 30 years and takes away 50% of the savings, amounting to more than $200,000, without being told? Is this cheating or not cheating?
It is important also to look at the degree. There is no much harm of being cheated of a few dollars. But if one is being cheated of a large sum, one should pursue the matter rigorously.
Tan Kin Lian
Cheating is to sell a product without disclosing relevant information or providing misleading information about the product to the consumer.
If a consumer can felt cheated of a few dollars in a consumable product that has expired, how would the consumer feel if he or she has been sold a financial product that locks out the savings for 30 years and takes away 50% of the savings, amounting to more than $200,000, without being told? Is this cheating or not cheating?
It is important also to look at the degree. There is no much harm of being cheated of a few dollars. But if one is being cheated of a large sum, one should pursue the matter rigorously.
Tan Kin Lian
Global Economic Turmoil
I expect a global economic turmoil within the next few years. My views are expressed here. I will be happy if I am wrong, but it is better to be prepared in case it materialises.
Family3
A consumer asked for my views about the Family3 policy. He was approached by an agent and was not sure if this is a good policy to buy.
I advised the consumer to read my FAQ on Family3 in my website, www.tankinlian.com/ask.aspx. (Search for Family3). There are a few FAQs written on this policy.
I also advised the consumer to read my book, Practical Guide on Financial Planning, available at www.tankinlian.com/ishop and to attend the educational talk on financial planning organised by FISCA (www.fisca.sg).
I hope that consumers will spend some time and money to be educated, so that they do not buy the wrong insurance product from an insurance agent who is unable to explain the product to the consumer and cannot be trusted to give the right advice to the consumer, due to the conflict of interest.
Tan Kin Lian
I advised the consumer to read my FAQ on Family3 in my website, www.tankinlian.com/ask.aspx. (Search for Family3). There are a few FAQs written on this policy.
I also advised the consumer to read my book, Practical Guide on Financial Planning, available at www.tankinlian.com/ishop and to attend the educational talk on financial planning organised by FISCA (www.fisca.sg).
I hope that consumers will spend some time and money to be educated, so that they do not buy the wrong insurance product from an insurance agent who is unable to explain the product to the consumer and cannot be trusted to give the right advice to the consumer, due to the conflict of interest.
Tan Kin Lian
How people vote
Contributed by DareToAct
In "Why empathy matters?", the author J D Trout pointed out that it is dangerous to think that people know what they want and can choose what they want. "When we choose poorly, these failures do not have a pure pedigree. They are part individual irrationalism, part unconscious influence, and part lousy choices."
When we are unhappy with the behavior of our first choice, or that the logical "right" choice disappoints, we might behave irrationally, especially under influence, and choose one of the lousy choices available.
Underestimating the potential of irrational voting can be detriment to any incumbent.
DareToAct
In "Why empathy matters?", the author J D Trout pointed out that it is dangerous to think that people know what they want and can choose what they want. "When we choose poorly, these failures do not have a pure pedigree. They are part individual irrationalism, part unconscious influence, and part lousy choices."
When we are unhappy with the behavior of our first choice, or that the logical "right" choice disappoints, we might behave irrationally, especially under influence, and choose one of the lousy choices available.
Underestimating the potential of irrational voting can be detriment to any incumbent.
DareToAct
Saturday, November 06, 2010
Is exclusion of liability for injury caused by negligence lawful?
I refer to the letter "Indemnity forms unfair to participants" by Mr David Kwok Ng Kan (Nov 1).
Given the prevalence of this practice in the workplace and educational institutions,
perhaps it should be made a criminal offence
for anyone to purport to exclude liability in such circumstances.
Peter Wadeley
http://www.todayonline.com/Voices/EDC101103-0000045/Is-exclusion-of-liability-for-injury-caused-by-negligence-lawful?
My view
I agree that it is unlawful for a party to exclude liability in circumstances where they were negligent. The exclusion is unfair to consumers and goes against the established law of negligence.
Instead of waiting for Parliament to pass a new law, the relevant authority has existing power to tell these parties that they are doing something that is illegal. The relevant authority should step forward and exercise the powers that they already have, instead of standing by and watch.
Given the prevalence of this practice in the workplace and educational institutions,
perhaps it should be made a criminal offence
for anyone to purport to exclude liability in such circumstances.
Peter Wadeley
http://www.todayonline.com/Voices/EDC101103-0000045/Is-exclusion-of-liability-for-injury-caused-by-negligence-lawful?
My view
I agree that it is unlawful for a party to exclude liability in circumstances where they were negligent. The exclusion is unfair to consumers and goes against the established law of negligence.
Instead of waiting for Parliament to pass a new law, the relevant authority has existing power to tell these parties that they are doing something that is illegal. The relevant authority should step forward and exercise the powers that they already have, instead of standing by and watch.
Choice of insurance plan hinges on affordability, buyer's needs
Published in the Straits Times
WE REFER to the recent discussion
(Mr Tan Kin Lian,
'Why insurers, agents may turn a deaf ear to SM Goh's appeal'; Oct 27)
on Senior Minister Goh Chok Tong's appeal to the insurance industry
('Keep insurance affordable: SM Goh'; Oct 23),
and would like to share our views on
term insurance versus traditional whole life and investment-linked plans.
Such plans and their suitability are largely dependent on the consumer's
financial needs as well as affordability.
Term insurance, which charges cheaper premiums, does not offer any cash value.
Such plans are often temporary solutions to permanent whole life plans.
Most term life plans do not offer coverage beyond the age of 85.
Traditional whole life plans, on the other hand, offer bonuses -
albeit non-guaranteed, but which become guaranteed once declared -
that will be added to the basic sum assured.
Investment-linked policies offer more flexibility and transparency
as to how cash values are accumulated.
As it involves investment, it is not suitable for risk-adverse consumers.
Not all term insurance policies pay a lower commission
than traditional whole life and investment-linked policies.
Pricing of insurance products is a matter of actuarial science
determined by insurers.
There is documentation of the financial planning process that is signed off by the client.
The recommendations based on the fact-find are further checked by managers
for compliance and can be audited by regulators.
Financial representatives subject themselves to mandatory training hours
in compliance, knowledge and skills,
while disciplinary actions are taken to address unethical practices.
The Life Insurance Association's report released on Aug 5 stated that
72 per cent of life insurance applications were completed
with a full or partial fact-find.
Ultimately, consumers would have to decide for themselves
on the advice given as well as the option to compare and choose plans
across the various insurers.
The answer to SM Goh's appeal should be multifaceted,
whereby insurers, industry players and financial representatives
work to educate consumers on the importance of adequate insurance coverage.
Examples include MoneySense and public forums.
Jeffrey Tan President Insurance and Financial Practitioners Association of Singapore
http://www.straitstimes.com/
My view
My consumers have sought my advice on the insurance policies that they have bought. They were shocked to learn about the high dedction, amounting to more than 50% of the accumulated premium. They were not aware about the high charge as it is not explained by the agent.
I hope that these consumers will write to reply to the letter from Jeffrey Tan. Consumers who have been cheated should now voice their unhappiness. They cannot stand on the sideline and expect other people fight for them.
If you wish to write a letter to the St Times but is not confident about how to write the letter, you can send a draft to kinlian@gmail.com. I will help you to polish up your draft. You should talk about how you were sold a life insurance policy, and how much you understood or did not understand the product, and how shocked you were to learn about the high percentage that is deducted from the policy, giving you a large loss for a lifetime.
Do take this chance to write, and help to change the bad practice and dishonest selling that is happening for a long time in the life insurance industry.
(Mr Tan Kin Lian,
'Why insurers, agents may turn a deaf ear to SM Goh's appeal'; Oct 27)
on Senior Minister Goh Chok Tong's appeal to the insurance industry
('Keep insurance affordable: SM Goh'; Oct 23),
and would like to share our views on
term insurance versus traditional whole life and investment-linked plans.
Such plans and their suitability are largely dependent on the consumer's
financial needs as well as affordability.
Term insurance, which charges cheaper premiums, does not offer any cash value.
Such plans are often temporary solutions to permanent whole life plans.
Most term life plans do not offer coverage beyond the age of 85.
Traditional whole life plans, on the other hand, offer bonuses -
albeit non-guaranteed, but which become guaranteed once declared -
that will be added to the basic sum assured.
Investment-linked policies offer more flexibility and transparency
as to how cash values are accumulated.
As it involves investment, it is not suitable for risk-adverse consumers.
Not all term insurance policies pay a lower commission
than traditional whole life and investment-linked policies.
Pricing of insurance products is a matter of actuarial science
determined by insurers.
There is documentation of the financial planning process that is signed off by the client.
The recommendations based on the fact-find are further checked by managers
for compliance and can be audited by regulators.
Financial representatives subject themselves to mandatory training hours
in compliance, knowledge and skills,
while disciplinary actions are taken to address unethical practices.
The Life Insurance Association's report released on Aug 5 stated that
72 per cent of life insurance applications were completed
with a full or partial fact-find.
Ultimately, consumers would have to decide for themselves
on the advice given as well as the option to compare and choose plans
across the various insurers.
The answer to SM Goh's appeal should be multifaceted,
whereby insurers, industry players and financial representatives
work to educate consumers on the importance of adequate insurance coverage.
Examples include MoneySense and public forums.
Jeffrey Tan President Insurance and Financial Practitioners Association of Singapore
http://www.straitstimes.com/
My view
My consumers have sought my advice on the insurance policies that they have bought. They were shocked to learn about the high dedction, amounting to more than 50% of the accumulated premium. They were not aware about the high charge as it is not explained by the agent.
I hope that these consumers will write to reply to the letter from Jeffrey Tan. Consumers who have been cheated should now voice their unhappiness. They cannot stand on the sideline and expect other people fight for them.
If you wish to write a letter to the St Times but is not confident about how to write the letter, you can send a draft to kinlian@gmail.com. I will help you to polish up your draft. You should talk about how you were sold a life insurance policy, and how much you understood or did not understand the product, and how shocked you were to learn about the high percentage that is deducted from the policy, giving you a large loss for a lifetime.
Do take this chance to write, and help to change the bad practice and dishonest selling that is happening for a long time in the life insurance industry.
Guilin, China
I was in Guilin for the past four days. I went on a vacation by the inaugural flight to Guilin on Jetstar. It was an excellent trip to visit a beautiful place with nice people. The service by Jestar was excellent.
China still blocked Google and Youtube. I was not able to access my blog. But I was able to get the Google Mail.
I met many new and old friends on this trip. The enjoyed the shape quiz that I gave to them. They were fascinated by the challenging puzzles. They also enjoyed the amazing numbers. Many of them wanted to buy the Shape Quiz book, which is available here.
China still blocked Google and Youtube. I was not able to access my blog. But I was able to get the Google Mail.
I met many new and old friends on this trip. The enjoyed the shape quiz that I gave to them. They were fascinated by the challenging puzzles. They also enjoyed the amazing numbers. Many of them wanted to buy the Shape Quiz book, which is available here.
Wednesday, November 03, 2010
Risk of Private Shield
I have seen several examples of the problems encountered by consumers when they change from Medishield to Private Shield or from one Private Shield to another plan. They encountered rejection of their claim due to failure to disclose previous medical conditions. In some cases, the previous medical conditions were quite trivial and are not material to merit rejection of the claim. However, the claim officer is "trigger happy" in rejecting the claims, so that they can make more profit for the insurance company.
The purpose of insurance is to pay claims, especially for legitimate claims. It is not to make excessive profit for the insurance company. In some countries, it is illegal for an insurance company to reject a claim for unjustified reasons. If they wish to cite "non-disclosure", they need to have reasonable grounds. As the situation seem to be quite bad in Singapore, it is best for consumers to avoid changing insurers or to avoid upgrading of Shield plans.
The behavior of the insurance company is bad in another respect. Even if they are entitled to reject the claim, it is still their duty to pay the Medishield portion of the claim, as this cover is supposed to continue from one insurer to another, and from one plan to another. By rejecting the claim, the insurance company is failing in its duty to treat its customer fairly.
If you are caught in this situation, and your claim is unfairly rejected, you have the following options:
The purpose of insurance is to pay claims, especially for legitimate claims. It is not to make excessive profit for the insurance company. In some countries, it is illegal for an insurance company to reject a claim for unjustified reasons. If they wish to cite "non-disclosure", they need to have reasonable grounds. As the situation seem to be quite bad in Singapore, it is best for consumers to avoid changing insurers or to avoid upgrading of Shield plans.
The behavior of the insurance company is bad in another respect. Even if they are entitled to reject the claim, it is still their duty to pay the Medishield portion of the claim, as this cover is supposed to continue from one insurer to another, and from one plan to another. By rejecting the claim, the insurance company is failing in its duty to treat its customer fairly.
If you are caught in this situation, and your claim is unfairly rejected, you have the following options:
- Lodge a complaint to FIDREC (www.fisca.sg) for your claim to be mediated or adjudicated
- Write a letter to the newspaper to complain about the unfair rejection
You can read several stories about unfair rejection of Shield claims in my website. Go to www.tankinlian.com/ask.aspx and search for 'Rejection" or "Shield".
Tan Kin Lian
Amazing Number cards
I have arranged the numbers into in a format that allows you to print them into small cards. You can print out the page, paste into a hard card and cut out the small cards. You can try the trick with your friends. Click here.
Tuesday, November 02, 2010
Ask Mr. Tan in www.tankinlian.com
I have now written about 100 articles on insurance, investment and financial planning in the Ask Mr. Tan section of my website, www.tankinlian.com. You can access this section directly from the "Ask Mr. Tan" button on the top of the right frame of my blog. When you are at the website, you can search for an article easily by entering a keyword, such as "health insurance" in the Search tab to get all articles on this topic.
In the past, I post these articles in my blog but they quickly disappear from the top of my blog after a few days.
By putting them in the TKL website, they can be easily retrieved in the future, using the search function.
I am a regular user of this Search function. When someone ask me a question, it is easy for me to retrieve the article or FAQ using this search and give a link as a reply. But I want to encourage my readers to search for the article on their own, rather than give me the additional burden of making the search.
In the past, I post these articles in my blog but they quickly disappear from the top of my blog after a few days.
By putting them in the TKL website, they can be easily retrieved in the future, using the search function.
I am a regular user of this Search function. When someone ask me a question, it is easy for me to retrieve the article or FAQ using this search and give a link as a reply. But I want to encourage my readers to search for the article on their own, rather than give me the additional burden of making the search.
Managing personal risk
This article explains the importance of managing the risk of unemployment and inadequate savings for retirement and how to tell the difference between a good and bad life insurance policy. Read this article.
You can search for other FAQs and articles in www.tankinlian.com/ask.aspx or the link "Ask Mr Tan" on the right.
Buy financial planning book here.
You can search for other FAQs and articles in www.tankinlian.com/ask.aspx or the link "Ask Mr Tan" on the right.
Buy financial planning book here.
Key tips for a new job entrant
When a graduate starts work for the first time, he or she is likely to be targeted by an insurance agent who will sell a life insurance policy to protect against the loss of future income. The life insurance policy is likely to give a poor yield for the future savings, and the protection need is not really necessary. But, it is easy for the job entrant to be misled by the well trained agent.
Read this article about the uncomfortable experience of a job entrant in being sold a policy that he does not really want, but find it difficult to say "no" to an agent who is his friend.
Read this article to find out about the insurance that you really need. And read this article about the importance of having personal savings that you are kept in flexible form - which you may need for a future emergency.
Read this article about the uncomfortable experience of a job entrant in being sold a policy that he does not really want, but find it difficult to say "no" to an agent who is his friend.
Read this article to find out about the insurance that you really need. And read this article about the importance of having personal savings that you are kept in flexible form - which you may need for a future emergency.
PDF Centric website - some views
14 people participated in the survey.
71% like the PDF centric website (www.tankinlian.com). They find it easy to search and read the information and to download the PDF for offline reading or sending by e-mail. 29% dislike it. They find it difficult to open the PDF on smartphones or Mac browsers.
77% replied that they find it easy to search for information on the PDF centric websites. 23% prefer to use the Google search.
A few people asked for direct links to the PDF rather than to search for it using the search function. My purpose is to get people familiar with visiting the "Latest" tab and using the "Search" tab. I do not want them to only refer to the specific PDF that is directly linked to my blog.
71% like the PDF centric website (www.tankinlian.com). They find it easy to search and read the information and to download the PDF for offline reading or sending by e-mail. 29% dislike it. They find it difficult to open the PDF on smartphones or Mac browsers.
77% replied that they find it easy to search for information on the PDF centric websites. 23% prefer to use the Google search.
A few people asked for direct links to the PDF rather than to search for it using the search function. My purpose is to get people familiar with visiting the "Latest" tab and using the "Search" tab. I do not want them to only refer to the specific PDF that is directly linked to my blog.
Buy High, Sell Low
Its your money and your responsibility.
Neither the Fed Chief, nor your advisor nor any guru nor blogger nor Jim Cramer.
You are the one who is going to be either going to live in comfortable retirement,
or eating cat food tacos.
http://www.ritholtz.com/blog/2010/10/investor-advisors-buy-high-sell-low/?
My view
Some consumers ask for my advice on whether it is the right time to buy or sell any stock or other investment. This is not a fair question to ask of me. Even if they pay a fee to the adviser, they will not get any good outcome. The investor should do their own homework and take their own punting decision - after all it is their own money.
Neither the Fed Chief, nor your advisor nor any guru nor blogger nor Jim Cramer.
You are the one who is going to be either going to live in comfortable retirement,
or eating cat food tacos.
http://www.ritholtz.com/blog/2010/10/investor-advisors-buy-high-sell-low/?
My view
Some consumers ask for my advice on whether it is the right time to buy or sell any stock or other investment. This is not a fair question to ask of me. Even if they pay a fee to the adviser, they will not get any good outcome. The investor should do their own homework and take their own punting decision - after all it is their own money.
How much is 1 trillion dollars?
The US deficit is $1.3 trillion dollars in 2010. How much is it?
http://www.creditscore.net/trillion-dollars/
http://www.creditscore.net/trillion-dollars/
Is the auditing of firms and other sectors that bad?
IN the wake of the recent global financial and economic crisis,
the role of audit was queried.
The audit model is not broken beyond repair, but it needs to be reworked.
http://biz.thestar.com.my/
http://biz.thestar.com.my/
Call for control on hedge funds
Managers want them to be regulated like other funds in Malaysia.
My view
Hedge funds are bad for the global economy. They should be controlled in the USA, Europe and Singapore, not just in Malaysia.
PDF centric website - TKL website
PRIZE: The two winners, selected by a draw, are C Yee and Chen WL. Thanks to all participants.
My website, www.tankinlian.com is designed as a PDF centric website. The new design has been operational for about three months. It attracts over 400 unique visitors daily. The vistors come daily to view the new FAQ and articles on insurance and investments that are uploaded into the website regulary.
I am able to create a FAQ or article easily using Microsoft Word and to convert it into a PDF. It takes less than one minute to upload the FAQ or article and to write a description. The easy of uploading makes it easy for me to cerate a dynamic and active website.
The PDF centric website is also convenient for my readers to search and read the FAQs and articles. They can download the PDF into their computer for offline reading or to have a hard copy printout. They can also forward the PDF by e-mail to another person.
I can add graphics and pictures to the PDF easily, if I wish. The content of the PDF document can also be located with a google search.
I hope that my regular readers are now familiar with the style of the PDF centric website and like this format. Please give your feedback here.
PRIZE: My Financial Planning book (retail price: $12) will be given to two lucky persons who replied to this survey (selected by a draw).
My website, www.tankinlian.com is designed as a PDF centric website. The new design has been operational for about three months. It attracts over 400 unique visitors daily. The vistors come daily to view the new FAQ and articles on insurance and investments that are uploaded into the website regulary.
I am able to create a FAQ or article easily using Microsoft Word and to convert it into a PDF. It takes less than one minute to upload the FAQ or article and to write a description. The easy of uploading makes it easy for me to cerate a dynamic and active website.
The PDF centric website is also convenient for my readers to search and read the FAQs and articles. They can download the PDF into their computer for offline reading or to have a hard copy printout. They can also forward the PDF by e-mail to another person.
I can add graphics and pictures to the PDF easily, if I wish. The content of the PDF document can also be located with a google search.
I hope that my regular readers are now familiar with the style of the PDF centric website and like this format. Please give your feedback here.
PRIZE: My Financial Planning book (retail price: $12) will be given to two lucky persons who replied to this survey (selected by a draw).
Can people afford to retire?
This article explains the need for governments in the West to raise the retirement age, where the state pensions scheme is funded on a "pay as you go" method which requires young workers to contribute towards the pensions of the retirees.
The Singapore government does not face this problem because it operates a provident fund scheme, where each contributor takes back his or her personal savings in the fund. However, the retirees in Singapore face the same problem of rising life expectancy and high cost of living - there is inadequate savings in the fund for their retirement. So, people in Singapore will have to continue working longer anyway as they cannot afford to retire.
But the elderly in Singapore face another big challenge - the elderly find it difficult to get jobs that pay a decent wage. They have to accept extremely low wage and even so, it is difficult to find these jobs. These challenge has to be addressed by the government, not just in words, but in concrete actions.
Tan Kin Lian
The Singapore government does not face this problem because it operates a provident fund scheme, where each contributor takes back his or her personal savings in the fund. However, the retirees in Singapore face the same problem of rising life expectancy and high cost of living - there is inadequate savings in the fund for their retirement. So, people in Singapore will have to continue working longer anyway as they cannot afford to retire.
But the elderly in Singapore face another big challenge - the elderly find it difficult to get jobs that pay a decent wage. They have to accept extremely low wage and even so, it is difficult to find these jobs. These challenge has to be addressed by the government, not just in words, but in concrete actions.
Tan Kin Lian
Monday, November 01, 2010
Inflation, savings and life insurance
A consumer told me that he is willing to take a life insurance policy if he can get back the total premiums that he has paid over a period of 20 to 30 years, without interest. He considers that he is getting good value from the life insurance and does not mind giving up the interest - so long as he gets the total premium back.
The consumer is not savvy and does not realise that over a period of 30 years, the value of money could fall by 50% to 75% of the real value, due to inflation. The real cost of the life insurance protection is only 20% of the amount of interest that he is giving away.
Read this article. http://tankinlian.com/admin/file.aspx?id=253
The consumer is not savvy and does not realise that over a period of 30 years, the value of money could fall by 50% to 75% of the real value, due to inflation. The real cost of the life insurance protection is only 20% of the amount of interest that he is giving away.
Read this article. http://tankinlian.com/admin/file.aspx?id=253
Financial Literacy
Each day, I receive a few requests from consumers asking for advice. In many cases, I find the following weaknesses:
It is risky for consumers to be so dependent on somebody else for advice. They are likely to fall prey to unscrupulous people who can take them for a ride. They can be harmed financially and lose a lot of money that should be earned on their savings.
The consumers do not know what kind of question that can ask or should not ask from another person. For example, it is difficult for anybody to know how high the stock market or gold will go, and when they will reverse. If you are not familiar, do not take this type of investment risk.
The consumer should also be aware about the vested interest of the people that they are asking for advice. If there is a vested interest, the consumer is likely to get bad advice. Your loss becomes the profit of the vested party.
There are some consumers who want me to give advice for free, when they are not even prepared to read the FAQ in my website (which is free anyway) or to buy my Financial Planning book for $12 or attend the FISCA educational talk for $30. This is dangerous. They will fall prey to a dishonest cheat sometime in the future.
Financial planning book can be bought here.
Tan Kin Lian
- The standard of financial literacy is quite low
- The consumer likes someone to decide for them.
It is risky for consumers to be so dependent on somebody else for advice. They are likely to fall prey to unscrupulous people who can take them for a ride. They can be harmed financially and lose a lot of money that should be earned on their savings.
The consumers do not know what kind of question that can ask or should not ask from another person. For example, it is difficult for anybody to know how high the stock market or gold will go, and when they will reverse. If you are not familiar, do not take this type of investment risk.
The consumer should also be aware about the vested interest of the people that they are asking for advice. If there is a vested interest, the consumer is likely to get bad advice. Your loss becomes the profit of the vested party.
There are some consumers who want me to give advice for free, when they are not even prepared to read the FAQ in my website (which is free anyway) or to buy my Financial Planning book for $12 or attend the FISCA educational talk for $30. This is dangerous. They will fall prey to a dishonest cheat sometime in the future.
Financial planning book can be bought here.
Tan Kin Lian
Sunday, October 31, 2010
Damage caused by GRC system
My friend made this observation - the PAP MPs were good in the old days. They became different after the GRC system was adopted. Under the GRC system, they do not need to look after the voters, and only need to please one top man. The gulf between the PAP and the people widened over the years since.
Singapore General Election Portal - the secret on how it is maintained
Dear Mr. Tan,
How do you manage to put up the interesting articles in the General Election Portal? Although I am able to find the same articles by reading all the blog feeds, it is useful to go to your portal as you have made a good summary of the important articles. Saves me the time of reading through so many feeds.
REPLY
I am fortunate to have the assistance of Gerald. He searches all the feeds every morning and extracts the articles that are relevant to my portal and my blog. He also summarizes the articles for me. It is easy for me to post them in the portal. There is another person (CH) who helps me to manage the portal.
Bookmark this to keep abreast of the issues for the general election:
www.easyapps.sg/sgep/latest.aspx
How do you manage to put up the interesting articles in the General Election Portal? Although I am able to find the same articles by reading all the blog feeds, it is useful to go to your portal as you have made a good summary of the important articles. Saves me the time of reading through so many feeds.
REPLY
I am fortunate to have the assistance of Gerald. He searches all the feeds every morning and extracts the articles that are relevant to my portal and my blog. He also summarizes the articles for me. It is easy for me to post them in the portal. There is another person (CH) who helps me to manage the portal.
Bookmark this to keep abreast of the issues for the general election:
www.easyapps.sg/sgep/latest.aspx
SM Goh and Term Insurance - 3 letters
Read my letter to the Straits Times Forum and two follow up letters here:
www.tankinlian.com/latest.aspx
www.tankinlian.com/latest.aspx
Amazing numbers
Amaze your friends with these magic cards. Ask your friend to guess a number between 1 to 99. Show him the cards and ask your fiend to pick out the cards that contain the secret number. You can guess the number. The secret is shown in my website.
www.tankinlian.com/latest.aspx (Search for Amazing Numbers)
www.tankinlian.com/latest.aspx (Search for Amazing Numbers)
Private shield and employer benefits
In an article in the Sunday Times, the editor recommended that the consumer should buy a Private Shield now, even if the consumer is provided with medical benefits by the employer. I find this to be a wasteful practice.
If the private shield cost $300 a year, the total premium, including interest at 4% per annum payable on the Medisave account, will amount to $22,000 at the end of 35 years. This is a lot of money to give away to a cover that is not really needed.
Although the Minister for Health did make a claim of $20,000 on his Private Shield policy, this is not a common case. For each person who makes a claim, there must be 10 other people who did not make the claim. The Minister is not covered for medical benefits by the employer, so a private shield is necessary.
This is not the case for many people in the private sector who are provided with medical benefits by the employer. Do not waste your money.
The consumer is told by the insurer or the agent that if they buy the private shield at a young age, they are guaranteed with the cover when they grow old. This is only partly true. The cost of private shield above age 65 is so costly (maybe $2,000 or more a year) that many retirees cannot afford it. They are likely to downgrade to Medisheld at that time. So, the consumer will be wasting $22,000, but it will be a lot of commission and profits for the agent and the insurer.
Read my articles in www.tankinlian.com/ask.aspx. Search for "Shield". Remember - even if you pay the premium, you will not find it easy to make a claim under some situations.
Tan Kin Lian
If the private shield cost $300 a year, the total premium, including interest at 4% per annum payable on the Medisave account, will amount to $22,000 at the end of 35 years. This is a lot of money to give away to a cover that is not really needed.
Although the Minister for Health did make a claim of $20,000 on his Private Shield policy, this is not a common case. For each person who makes a claim, there must be 10 other people who did not make the claim. The Minister is not covered for medical benefits by the employer, so a private shield is necessary.
This is not the case for many people in the private sector who are provided with medical benefits by the employer. Do not waste your money.
The consumer is told by the insurer or the agent that if they buy the private shield at a young age, they are guaranteed with the cover when they grow old. This is only partly true. The cost of private shield above age 65 is so costly (maybe $2,000 or more a year) that many retirees cannot afford it. They are likely to downgrade to Medisheld at that time. So, the consumer will be wasting $22,000, but it will be a lot of commission and profits for the agent and the insurer.
Read my articles in www.tankinlian.com/ask.aspx. Search for "Shield". Remember - even if you pay the premium, you will not find it easy to make a claim under some situations.
Tan Kin Lian
SM Speech to NTU Forum
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Singapore General Election Portal
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