Ask for Benefit Illustration

Hi Mr Tan, 
Is it normal for insurance advisors to show you the benefit illustration plans etc, but not giving you the handouts for you to take home and analyse thereafter (prior to buying any plans)? I have encountered this a few times, it seems like it is their company or agency's policy to do so. 

Without the numbers and terms on hand, how am I supposed to do a detailed analysis myself. The session with the agent himself is intensive. Without the printouts for me to analyse on my own thereafter, I am afraid there will be conditions and terms I would have missed out. This is not a fair system it seems like an aggressive sales strategy. No doubt there is a cooling off period after purchase, but it forces you to sign on the dotted line without giving you easy accessibility to information. 
REPLY
If I understand it correctly, the agent is required to give the benefit illustration for you to take back and analyze. If they don't, you can lodge a complaint about the unethical conduct.

Develop the skill in problem solving

You can develop the skill in problem solving by following the right approach and gain confidence in your problem solving ability. You do not have to rely on your boss or other people to think and solve problems for you.  This is an important life skill.

Give your child the opportunity to develop this skill now. Let them grow up with confidence in their own ability..

http://tankinlian.com/admin/file.aspx?id=816&IID=823

Expensive Seminars and Wild Claims

A consumer attended a 3 day seminar and came out with this observation. He wished to warn gullible Singaporeans not to be taken for a ride.
http://tankinlian.com/admin/file.aspx?id=814&IID=821

Quote:
I hope that our government will keep an eye on such activities and intervene early, I believe Singaporeans being too naive, ignorant and greedy and are not immunized to handle on the cutting-edge sales pitch. Since our government is slow to react, I like to ask people like you to warn the gullible flock.
The speakers said that Asia is the future and they have chosen to settle in Singapore, Perhaps, they have found their gold mine here, from the fees paid by the gullible people.

My Favorite Ten Commandments

This is written by an unknown author, and is being circulated in the Internet.
http://tankinlian.com/admin/file.aspx?id=813&IID=820

Are you financially aware?

Here is a test of your financial awareness. Work out your score.
http://tankinlian.com/admin/file.aspx?id=812&IID=819

Big Fat Purse

This article on financial planning, investing and insurance was written for www.bigfatpurse.com
http://tankinlian.com/admin/file.aspx?id=811&IID=818

Average bill size - by medical procedure

Here are the average bill size in B2 ward by medical procedure.

The finding is quite revealing. The cost of treatment in B2 ward is not as expensive as feared by most people. The quality of treatment must be quite good, judging by the large number of people that are treated.

The fear of high medical bills could be exaggerated by agents trying to sell expensive private Shield plans. The cost of these plans can be quite high, and the patient still has to pay the deductible and co-insurance. 

http://tankinlian.com/admin/file.aspx?id=810&IID=817

Compare bills in public and private hospitals

Cost of treatment in private hospital is 2 to 3 times of similar treatment in private hospitals. After factoring in the government subsidy (average of 50%), the difference is 4 to 6 times. 

Elderly people should opt for treatment in subsidized wards. If they go for treatment in private hospitals, the real cost is 4 to 6 times higher. 

Insurance does not reduce the cost. It adds another 50% to the actual cost - to cover marketing, administration and profit. The higher cost is reflected in the premium that has to be paid by everybody.

Many people think that insurance will help to pay their bills. They do not realize that they are paying for it through higher premiums. 

Read this article.
http://tankinlian.com/Admin/File.aspx?ID=659&Frame=1

If you can afford the higher premium, then it is all right to buy private insurance. But, if you do not have adequate savings, it is better to keep to Medishield and use subsidized wards, especially for elderly people. 

Think of needs of pedestrians

6 May 2013

Editor, Forum Page

Straits Times

The Police reported that 50 people are killed each year while crossing
the road. 

I suggest that our traffic lights control system should also be designed

with the needs of pedestrians in mind.

I have tried to cross certain stretches of roads, such as Shenton Way or

Orchard Road, and the vehicles seem  to be flowing continuously. 

The traffic lights at the junctions or overhead bridge may be too far away 

for pedestrians to walk to.

It will be useful for the traffic lights to be synchronized to allow 1 minute for

passengers to cross the road. This could mean that all vehicles should be

stopped during this time.

It could be less costly than building overhead bridge or pedestrian tunnels,

and more convenient for passengers.

The only negative impact is that motorists will have to waste one minute, but

they do have to waste the time anyway in congested roads.

Let the needs of pedestrians, especially the elderly, be considered in our

planning of the traffic flow.

Medical insurance for elderly people

I have always advised elderly people, who are not well off, to stick with Medishield, and not be frightened to buy the expensive private shields. Here are my reasons.

http://tankinlian.com/Admin/File.aspx?ID=698&Frame=1

In my personal case, I have Medishield, but I really do not need it. I have adequate savings to pay for my medical expense. I will go for B2 or C class wards, when I need to be treated. They are adequate for elderly people.

Avoid upgrading to private Shield when you are old

The daughter wanted to buy a Private Shield for her father, who was already covered under Medishield. Her father is almost 70. Due to health status, the Shield policy carried several exclusions and charged a higher premium.

Here is my reply to her:

It is best for your father to say on Medishield. There is no need to change to the private Shield, especially as they have so many exclusions and you are paying a higher premium. Even if there are no exclusions, there is no need to upgrade.
See this article in my website
http://tankinlian.com/Admin/File.aspx?ID=698&Frame=1
Here are additional articles for you to read:
http://tankinlian.com/Information.aspx?q=medical
I am waiving my consultancy fee. No need to pay me. You can give me a call at 66599611 to talk to me further.
Tan Kin Lian

Transparent and Fair Elections

Here is a way to ensure a fair and transparent election using a combination of human and electronic means.

http://tankinlian.com/admin/file.aspx?id=809&IID=816

The Malaysian election hold many lessons for Singapore

http://singaporemind.blogspot.sg/2013/05/malaysias-elections-holds-many-lessons.html

Electronic voting

I am in favor of electronic voting to replace the current manual voting process.

Advantages
1. The electronic vote can be encrypted and stored immediately in a secure server and a backup server. It is not possible to change the vote. 
2. All votes have an number that can be identified to a voter, but the actual vote cannot be read. This linkage is to identify the valid votes and ensure that there is only one vote for each voter.
3. The votes can be counted electronically by a software that is held by the Election Commission. An independent party can keep a copy of the software and do an independent count. This is to make sure that the software works reliably and has not been changed.
4. In the counting of the valid votes, there is no way of checking the identity of the voter - as the linkage is removed for the purpose of counting.
5. Can allow voters to vote in overseas locations, so long as their identity is verified.

Risk of Manual Systems
1. Fake ballot papers
2. Switching of ballot boxes enroute to counting center
3. Multiple votes by same voter
4. Counting errors

Risk of Electronic Voting
1. Tampering with the votes - solved by encryption
2. Tampering with the counting software - solved by giving multiple copies of the software to different parties, so they can run their own count and be assured that the software counts properly.

Unnecessary hassle - making life difficult for Singaporeans

I attended a meeting at the Land Transport Authority office in Sin Ming Avenue. The security guard asked me to walk 100 meters to the security post to change my NRIC to a visitor pass and to register my particulars. 

After the meeting, I had to walk back to the security post to retrieve my NRiC and to register my particulars again. To make matters worse, the security guard was not at his post. I had to wait a while for him to return.

What is the purpose of this activity? Is it to stop terrorists from entering a Government building? If so, why was I not checked for explosives in my bag?

Was it to register my contact in case there is another SARS outbreak? If this was the purpose, why was my particulars not checked, e.g. mobile phone number? In case, no one knows, SARS have been over more than 10 years ago.

Was it to know that I was in the building in case there was a fire? There are 100 other places that I visited last month, where the risk of a fire is higher. I was not recorded in all of these places.

The real answer is - Singaporeans just follow instructions and routines blindly. They do not ask - is this really necessary? is this really useful?

Maybe, they enjoy making other people go through the hassle, for nothing. Nothing will change until the minister is made the target of these measures!

Shorter lease flats

Minister of National Development, Khaw Boon Wan, has a difficult task. He wants to bring down the price of new flats to four years of average salary, but he has to placate existing HDB owners who are angry that the prices of their existing HDB flats will be adversely affected. He has announced that his plan is to stop the prices from rising, and to make sure that any fall will be "just a few percent".

It is difficult for the minister to balance the conflicting interest of existing and new flat owners. He can consider two approaches:

a)  Create a new class of "non-open market" flats that have to be sold back to HDB. This was proposed by a political party.

b) Offer a new category of HDB flats with a shorter lease of 60 or 75 years. This flats will be cheaper, due to the shorter lease.

I think that proposal (b) will be better and will not cause too much disruption to the current situation. New buyers, who does not like the shorter lease, have the option to buy the longer lease at the current prices. The cheaper flats, on shorter lease, will be more attractive to those buyers who find the current prices to be too expensive.

Currently, industrial buildings are being sold on 30 and 60 year leases, and are accepted as good investments. In time, shorter lease HDB flats will also be acceptable. Actually, many of the flats with original 99 years have their current lease reduced to 75 years already, after 25 years have passed by.

Housing prices - a Ponzi?

The inflation in housing prices can be seen as a Ponzi scheme.
Read this article:
http://singaporedesk.blogspot.sg/2013/05/the-golden-rule.html

Bad experience with Street Deal

This consumer shares his bad experience with a website called Street Deal that purports to offer products at a discounted price. 
http://tankinlian.com/admin/file.aspx?id=805&IID=812

Make business easier

http://tankinlian.com/admin/file.aspx?id=804&IID=811

Sensible approach towards security

We should adopt a sensible approach towards security, terrorism and cyber crime. My emphasis is "sensible". I do not like the blind approach towards security that is adopted in many aspects of our daily life, such as: 

1. Registering visitors to visit commercial buildings
2. Excessive checking of visitors boarding planes, even a watch will cause a beep
3. Many layers of security codes to use online banking, especially for corporate accounts
4. Need for e-mail statements to be encrypted and accessed with a password.

These excessive security measures will have a bad side effect. Being impractical, the security guard and the public will not pay much attention to it. It becomes a blind routine.

The public will avoid the use of the online measures. For example, I refuse to open my encrypted statements - as it is too troublesome. I often have to write cheques rather than go through the painful online process.

To enhance security in our public buildings, malls and train stations, I prefer to see more security guard that moves around and keep an eye on the visitors. Their presence is useful, in addition to the use of close circuit televisions.

Many of the measures were introduced during a period of real danger, for example, shortly after the terrorist attack in 2001. But 10 years have already passed, and there are new security threats to replace the old ones. We need to review the measures after a few years, to see if they are really relevant. 

My views of the Malaysian Election 2013

1.  There was a strong swing among the Chinese to the Democratic Action Party (DAP), member of Pakatan Rakyat (PR). The urban Malays was more neutral while the rural Malays continued to give strong support to the Barisan National (BN).

2. This polarization along racial lines is not good for Malaysia. It is wise for the caretaker Prime Minister, Najib Razak to call for a period of reconciliation. He is moderate and reform minded and will be able to take Malaysia through a period of change.

3. The call by the former Prime Minister Mahathir Mohd at the last minute to the Malays to reject Party Islam (PAS) probably saved BN. He is clearly strategic in his thinking. This probably contributed to the surge in Malay support for the BN, instead of PAS, in the important rural areas in Perak, Kedah and Johore.

4. It is rather sad that Anwar Ibrahim's party, Partai Keadilan Rakyat (PKR), which is multi-racial in its approach, did not fare as well as it should in the rural areas. Several Chinese candidates stood on their platform, perhaps in the urban areas.

5. I am impressed with the performance of Anwar's daughter, Nurrul Izzah. I watched some of the Youtube videos of her speeches. She is truly an inspirational leader with clear ideas of what is good for the future of Malaysia. A commentator said that she is his favorite as a future Prime Minister of Malaysia. I share this view.

6.  I am impressed with the campaign speeches of many candidates. They are able to relate well with the public and to mix Malay, English, Mandarin and dialect in the same speech. It goes will with a multi-racial audience.

7. Malaysians are way ahead of Singaporeans in politics and democracy. We have much to learn from them.

Malaysiakini provide free access for the General Election coverage

On election night, we aim to be the first to report real-time results. With journalists in all the key seats and clued in to the counting process, we will let you know who shall govern Malaysia after May 5. Apart from http://www.malaysiakini.com/, we ask readers to bookmarkwww.facebook.com/malaysiakini and www.twitter.com/malaysiakini to make sure you get access to Malaysiakini latest news. Mobile users can access the website through m.malaysiakini.com. Also, you can follow our SMS alerts. 

Taking the risk of a new Government

The general election in Malaysia is an interesting lesson for Singapore. Are Malaysians willing to take the risk to vote in a new Government?

Listen to the speech of the Nga Kor Ming, DAP candidate for Nibong Tebal and Anwar Ibrahim, leader of Perkatan Rakyat.

They are great speakers, able to mingle will with the multi-racial composition of the Malaysian voters.

http://singaporemind.blogspot.sg/2013/05/malaysias-hotly-contested-elections.html

Electronic payments

I just learned that the Inland Revenue Authority is taking a new initiative to get vendors to register and operate an account to receive payments from the public sector. The link iswww.vendors.gov.sg.

I welcome this move. It clearly reflects the unsatisfactory state of affairs in Singapore.

This type of service should be extended to the private sector as well, but the lead has to be taken by the Monetary Authority of Singapore (MAS). They cannot just sit back and hope that the banking industry will make it happen.

Concerns of young voters

The number of voters in Malaysia increased from 10.5 to 13.3 million over the past five years. The increase are due to young voters reaching voting age. 

The political parties wanted to reach out to these young voters. What are their concerns?

It should be similar to concerns of young people all over the world. Some of them are:

1. How to get jobs
2. How to pay off study loans
3. How to get a fairer and less corrupt government.
4. How to have a say in their future

Are these the same concerns in Singapore?

A degree is not required for most jobs

Minister Khaw Boon Wan said that it is not necessary to have a university degree. I agree with this statement, as a degree is not required for most jobs. It is only required for some jobs.

Making this statement is a bold step. But it has to be followed by concrete action. 

I like to make this suggestion, so that the minister can use it in his own way, and no need to acknowledge that it comes from me:

1. State the benchmark salary for most jobs and the requirements needed for the jobs.

2. This should apply to salaries in the public service, e.g. teaching, nursing, office work, security, customer service, technical jobs.

3. Employ more people directly in the public service, and avoid outsourcing these jobs.

4. Recruit young people on internship for these jobs, and assure them of a full time job when they complete the internship satisfactorily.

If the public service sets the example, they will form the benchmark for the private sector.

If our young people know that they can get a good income without a degree, many of those who are not academically inclined will be prepared to opt for vocational training. It will save them or their parents from having to incur a large loan to get a university degree that is not needed.

Holiday camp on solving puzzles

Register your child (6 years and older) for the FREE 2 hour camp after the examinations. Parents and grandparents can attend as well. More details here:
http://tklcloud.com/book/Admin/File.aspx?key=aaf46e08-9517-4028-a4ce-7c993e0faa36&Frame=1

Book here: www.tklcloud.com/book/26

Rebating of insurance

As a insurance agent I am very concerned that recently the portal below have launched sales of insurance term and whole life products online giving as much as 50% commissions back to the client. They represent quite a few reputable insurers.

http://www.fundsupermart.com/main/research/viewHTML.tpl?articleNo=8179

I know that the FAIR recommendations has suggested the sales of insurance products online which to my understanding insurers have to redesign their products to make them cheaper and not rebating commissions like this case.

With such portal in place, clients will tend to 'bargain' with agents asking for commissions rebate. Are we going back to the past practices 10-20 years ago of commissions rebate.

We may come across clients asking for quotes and finally enticed with the 50% rebates and purchased online. This will definitely impact the livelihood of the estimated 20,000 agents in the market.

Something is not right by allowing corporate entity to rebate commissions. Is this a common practice worldwide or are we the first in the world to give commissions rebate to consumers.

What is your view Mr Tan.
REPLY
I understand your concern about the practice of rebating. However, I do not have any strong views on this matter. 

I believe that a good insurance agent, who is able to advice the client properly, deserves to be fairly remunerated. It may be better for the agent to go on a fee-based basis.

Akin to deposits

1 May 2013

Editor

Forum Page

Straits Times

I wish to give my rebuttal to the letter from Miss Grace Tan Mui Gek
"Why protect these investors?" (ST 1 May 2013}

Ms Tan did not address my key concern. There are already existing laws

on deposit taking and issue of securities that are supposed to be administered 

by the Monetary Authority of Singapore (MAS). 

The gold bar scheme that promises an attractive rate of interest and return 

of capital is akin to a deposit. It should be possible for the MAS to advice the 

operators that they could be running foul of this law, and if they still persist, to 

file a charge in court.

Miss Tan give the ridiculous example of strangers standing outside the 

corridor of her flat. I am not asking the authority to act against these 

strangers.

I am asking the authority to act against a company that is registered in 

Singapore, promotes investment schemes that could infringe the 

existing laws in Singapore, advertises their dubious products through 

the main newspapers, television channels or public talks, and 

carrying on these activities for several years. 

Being allowed to operate for so long, they acquire the mantle of 

authenticity. 

By putting them in the Investors Alert List, they MAS do know

of the existence of these dubious schemes but did not take action to investigate. 

How many members of the public are aware of the existence of such a list?

Some of these products are later found to be fraudulent and have been investigated

by the Commercial Affairs Department. But the action is taken far too late, and

too many investors have lost a lot of savings. This will bring down the good

reputation of Singapore.

Tan Kin Lian

President

Financial Services Consumer Association

Bashing bad products and unethical agents

A former colleague in NTUC Income was unhappy to read several postings which he consider to be "bashing insurance agents". This is an unfair comment. 

1.  I "bash" bad insurance products that are unfair to consumers, such as taking away a large part of their savings for most duration. This is like "highway robbery".

2. I "bash" insurance agents who know the products to be bad, but hide these bad features from their clients. These agents only want to make the sale and earn the commission, but do not care about the interest of the client.

3. I know that some insurance agents, especially those who recently joined the industry, are not aware about the bad features as the training is defective. I do not wish to "bash" these agents, but ask them to learn more about the products and make a balanced recommendation to their clients.

4. I encourage consumers to buy a good insurance product, even if the premium rate is slightly higher than the lowest offer in the market. The insurance agent need to earn a living and the insurer need to cover their expenses and make a profit. Be willing to pay a fair price, even if it is slightly higher.

5. Life insurance, if properly designed, is good for consumers to save for the future and to provide protection for their family. I urge the insurers to offer the products that are fair to consumers.

Surplus in Government Budget

I heard some remarks by Leong Sze Hian in Hong Lim Park regarding the surplus in the Government finances. 

The government reported a surplus of $3 billion but according to IMF accounting conventions, the actual surplus is $30 billion. (I cannot quite remember the figures that he used, so this is based on my recollection).

He said that IMF convention recognize land sale, and transfer from government agencies as revenue to the government, but they were ignored in our government budget figures. I agree with the approach by IMF in this respect. 

I consider the reporting adopted in our budget to be under-stating the actual surplus.

Potential changes in HDB policies?

There are some discussions along the following lines:

1. Remove the salary cap to qualify for HDB houses
2. Give subsidies (grants) according to level of income
3. Remove the executive condo (EC) scheme
4. Require HDB owners to sell their HDB flats when they buy a private property.

I support these moves. They will improve the supply of housing for the people. It will also help to stabilize prices.

Sharing the results of economic growth

PM Lee said that "growing the economy is the best way to boost wages".

This is an important strategy, but it has to be supplemented by other measures. We also need to ensure that the results of economic growth are shared fairly among all the parties that contributed to the growth.

In the past decade, we have seen wages had remained stagnant for many workers, while rentals, top management salaries and profits have taken a higher share of the economic output. The cost of living and cost of housing had also increased, so many workers found it difficult to make ends meet. They have to work longer hours to earn enough to get by.

We need to introduce the following measures:


1. Implement a minimum wage that is adequate for a Singaporean to raise a family and meet the cost of living.
2. Offset the higher wage cost by an appropriate reduction in rental, top management salaries and excessive profit margins.
3. Ensure that the final cost to consumers should be kept affordable by creating a market that is free, open and transparent.
4. Regulate the working hours and terms of employment to ensure a healthy work life balance. 

These measures cannot be just "left to the market", which is the approach that is favored by PM Lee. We need a government that is more active in managing these issues. Some matters have to be regulated, while other measures can be left to the market. The government has to be wise in making the right judgment.

Solve this Einstein puzzle

Solve this puzzle, based on Einstein Quiz
http://tankinlian.com/admin/file.aspx?id=801&IID=808

Send your answer to kinlian@gmail.com.
The first 3 winners will get the PDF version of the book.

The physical book can be ordered at www.tankinlian.com/ishop

May Day Message - implement minimum wage

On this May Day, I wish to state, once again, my support for a minimum wage to be introduced in Singapore. 

1. The minimum wage should be adequate for a Singaporean to raise a family and meet the cost of living.
2. The higher wage cost should be offset by reduction in rental, top management salaries and excessive profit margins.
3. The final cost to consumers should be kept affordable by creating a market that is free, open and transparent.
4. The working hours and terms of employment should be regulated to ensure a healthy work life balance.

Workers of the world, UNITE!

Be ready to pay for time

When someone writes an email to me, expecting free advice, I give this reply to them. 

Read this:
http://tankinlian.com/admin/file.aspx?id=740&IID=746

Often, the asker is too lazy to attend talks, to read books, or even to write their issue properly. If they continue this bad habit, they will be ripped off and cheated of their savings.

Send a few dollars and hours to attend my talk or read my books and save $100,000 or more!

Bad insurance policy

Here is a warning against buying a life insurance policy. Read the benefit illustration. Look at the guaranteed cash value and compare against the effect of deduction. If you find the cash value after the 5th year to be lower than the effect of deduction, reject the policy. 
At one time, there was some regulation that give a minimum cash value. This regulation was removed a few years ago. Now the cash value can be very much smaller than the deductions. It means that a large part of your savings and interest, more than 80% in some cases, can be confiscated from you,if you are not able to pay the premiums. This is daylight robbery!
If you have bought a policy that has this bad feature, write to kinlian@gmail.com.

May Day Rally, Hong Lim Park

I am attending the rally at Hong Lim park today at 4 PM. I hope to see many of you there. 
I will not be speaking but will be interested to hear what the speakers have to see. I am bringing clappers to give away to those who recognize me. 
If you wish to sign your protest against the 6.9 million population figure, go to www.tklcloud.com/petition.

HAPPY MAY DAY.

Education policy - a horror story

When you save in an education policy for your child, check the benefit illustration carefully and make sure that you do not fall into a trap. You may be losing a large part of your savings, if you are not able to complete the full policy term.
http://tankinlian.com/admin/file.aspx?id=800&IID=807

Letter to Government Ministers

Here is a list of letters that I have sent to Government Ministers on issues affecting the lives of Singaporeans. In most cases, their response is quite unsatisfactory, such as:

• No acknowledgement or reply
• Giving a reply without understanding the issue
• Refuse to call me for a discussion before giving their reply

This is why I advocate that this Government should be changed. Their current system of governance is bad for Singapore.

http://tankinlian.com/Admin/Information.aspx?CatID=17

Facebook of Tan Kin Lian

I am now more active in posting my views in my Facebook page, www.facebook.com/kinlian. I like to ask my blog followers to set up a Facebook profile and to link to my page.

Digital display of KM of bus stop

I have written to Land Transport Authority to suggest that each bus should have a digital display that shows the km of the next bus stop. This is the same km that is used for calculating the fare.

On boarding the bus, the commuter can check the km of the desired bus stop (say 12.6 km for thomson plaza) and pay attention to the km that is displayed at the stop. The commuter will know if he is arriving or has past the destination.

The passenger may have already found the km of the bus stop from an app, before boarding the bus.

The km proposal is an alternative to the bus stop number.

The LTA feedback manager said that she takes the bus, and does not need this information. I told her that I need passengers need this information when travelling at night or rain heavily or when taking a route that they are not familiar with.

Before you invest in a new business with a friend ...

Retirees with a lot of cash should be careful about starting a new business with a friend. 

I have seen many cases where the business failed, and the friendship broke down. In some cases, the retiree is a passive investor and is cheated by the friend.

If you really wish to invest in the business, you should start by spending a few thousand dollars to get a lawyer to write a legal contract or shareholder's agreement. The lawyer can ask the right question and verify some of the statements made by the promoter.

If you wish to invest in land or other shares overseas, you should also engage a lawyer to do the necessary legal checks.

Send small money now, to avoid losing large sum of money later. Do not be "penny wise, pound foolish".

Rationalize our bus services

There are 500 bus services in Singapore. Yes, 500! Few people are aware about how complicated and messy Singapore has become. 

Due to competition between SBS and SMRT, there is some duplication of services. As the buses have to cover all the side roads, there are many services linking the same destinations but going on many side roads. 

This system is quite inefficient. The bus has to stop every 0.4 km and there are too many stops along the way. This leads to jerky buses and a long journey.

A better system is to have the bus stop every 2 km and have feeder buses to handle the intermediate stops, and also to take passengers along the side roads.

Commuters are already familiar with taking a feeder bus to the MRT station. It will be more convenient to take a feeder bus to the main bus stop, as the passenger alight and board the next bus at the same stop.

Multiple Funds in Investment Linked Policies

Do not invest in any investment linked policies that offer you many funds to choose from. Some of these funds are probably stuffed with bad assets at over valued prices. You will not be able to know one from the other. You may buy into a good fund but later the assets are switched and you get bad results. You cannot keep track of these activities. 

Anyway, a few investors have approached me with funds that show a negative return after 10 years. If they had invested in an index fund over the same period, their investment could have appreciated 50%

intimidation of Leslie Chew

Leslie Chew, the cartoonist of Demon-cratic Singapore, is being investigated by the Police for offences under the Sedition Act. 

I find this action to be intimidating and deplorable. Sedition are actions to incite disorder leading to the overthrow of the Government. His cartoons, suggesting that a minority might be unfairly treated, is an opinion that will hardly be taken seriously. 

Many Singaporeans are now quite worried whether their views and criticism of the Government might lead to investigation under the Sedition Act. 

This climate of fear is unwarranted. I urge Singaporeans to have more courage in expressing our views.

Talk - Buying a car

The date and venue for the talk "Buying a car" has now been fixed. If you wish to attend the talk and get a few tips on how to save $$$ on COE, register now. 
http://tklcloud.com/book/14

Term insurance with critical illness

Here are some indicative premium rates for a level term insurance with critical illness. It helps the consumer to decide on choosing 20 or 25 year term and gives benchmark premium to compare with other insurers.
this policy is taken individually and is not part of a group insurance scheme.
http://tankinlian.com/admin/file.aspx?id=796&IID=803

Teaching students how to solve problems

I gave a 2 hour talk to teachers of primary 1 and 2 in a school on the use of shape quiz and tangram to teach pupils about solving puzzles. They enjoyed it. They placed an order for 400 books on these puzzles to be used by their pupils, using their edusave funds. The school gets a 50% discount on these books.

Schools interested in this talk can write to inbox@tankinlian.com

Parents can order the books for their children and help them to develop the skill of problem solving. 

Order at
www.tankinlian.com/ishop

Letter - MAS reviewing need to tweak framework

18 April 2013

Editor

Forum Page

Straits Times

I refer to the letter entitled "MAS reviewing need to tweak framework"

(ST 17 April).

The Monetary Authority of Singapore (MAS) has stated that they currently do not 

regulate schemes that purport to be alternative investments and typically do not

involve an offer of securities.

I wish to point out that two categories of these investments could possibly fall 

under the existing framework that MAS is already responsible to supervise.

A few investment schemes involving the purchase of gold bars promise to return

a fixed rate of interest and the return of capital at the end of the period. This is akin

to taking deposits, which is already regulated by the MAS. The investors were not

buying the gold bars, which were priced above its real market value, but were enticed

by the higher promised return.

Several investment schemes were being promoted that involve the collection of money

from investors into a company to make lucrative investments in projects in emerging

markets. This is similar to the issue of securities. 

MAS has also stated that it is an offence under the law to operate a fraudulent or 

deceptive scheme. Where there are reasons to suspect fraud, they would refer the matter

to the Commercial Affairs Department for investigation.

Many members of the public, including those who have been defrauded, have asked the 

question on where it took so long for the authorities to act on some of these scams, which

had been allowed to carry on for years and to acquire the mantle of authenticity.

I urge the authorities to strengthen its human resources to investigate these suspected

frauds early and to adopt a more pro-active approach in dealing with them. 

For example, if there are reasons to believe that a fraud has been committed but the evidence 

may not be conclusive, they can still ask the operators to discontinue the activity or face a 

charge in court. This may be a sufficient deterrent. 

Let us act early to preserve the good reputation of Singapore as a law abiding country, where

investors find it safe to invest their money here.

Tan Kin Lian

President

Financial Services Consumer Association

Reporting a Lost Item

It is quite troublesome for the owner of a lost item to file a report. Here is an easy and centralized way to deal with this problem.
http://tankinlian.com/admin/file.aspx?id=794&IID=801

Recommendations of the FAIR Panel

I like two recommendations of the FAIR Panel but am disappointed with their decision not to cap the commission on life insurance products. Overall - it s a THUMBS DOWN.
http://tankinlian.com/admin/file.aspx?id=793&IID=800

Short Essay Answer (2)

Here is an example of how to a suitable short essay answer. It shows the importance of having a short introduction or explanation of the question and provide the answer by explaining a few focused points. I hope that this is useful for students taking the examination.

Question:
Suppose that laws were passed that required insurers to charge everyone the same premium for health insurance regardless of age or health status. What effect would that have on the market for health insurance?

Answer:
It is usual for the insurer to charge different premium rates for health insurance according to the age or health status, as they contribute to different expected claims. If laws were passed that require insurers to charge the same premium rate, the likely outcome would be:

1. The low risk people will be subsidizing the high risk people.
2. If health insurance is not compulsory, the low risk people will probably decide not to buy insurance
3. The insurance pool will comprise mainly of high risk people with high expected claims
4. The premium rate will increase for the pool.
5. If the premium is too high, the high risk people cannot afford the insurance. The market for health insurance will fall.

Short essay answers

Over the years, I have marked short essay answers for a final examination. Here are the tips to students on how to get better marks. 
1. Write neatly. 
2. Introduce the question briefly, before you write the answer
3. Focus on a few points and write your answer. 

Here is an example:
Question - What factors are most likely to cause differences in term insurance rates for individuals of the same age.

Answer -
Term insurance pays the sum assured in the event of death of the insured during the period of insurance. The factors that are likely to cause differences in insurance rates for insurances of the same age are:

1. gender, females pay less
2. occupation, low risk occupations pay less
3. health status, healthy peoples pay less
4. smoking habits, non-smokers pay less.

This will give you full 3 marks.

The length of the answer depends on the marks given. Most questions with similar marks should contain about the same length in reply. If you have fewer points, explain slightly more. If you have more points, explain slightly less.

Hope that this is useful for undergraduates preparing for your examinations.

Passing a law

The laws and regulations that are passed are intended to tell people what is right and what is wrong, in law. They may deter most law abiding people, although there will be crooks that will continue to run foul of the law. The possibilities of these crooks should not discourage us from passing the laws.

Recently, I suggested that foreigners who intend to work in Singapore should be required to apply directly for a work pass and be responsible personally for the authenticity of the degrees that they submit. If the degrees are found to be faked, they can be sent to jail or be repatriated immediately.

Currently, the Ministry of Manpower require the employer to submit the papers, so the responsibility is not clear.

Someone replied that the requirement will not work. He quoted the death penalty for drug traffickers, which still does not deter some people from engaging in it.

This is an example of the type of thinking that is quite prevalent in Singapore. He expects the law to work in every case, if not, do not pass the law. I have described this as "thinking only in black and white".

We need to pass the law to make it clear that giving false information is an crime, that comes with severe penalties. We do not expect the law to stop all the abuses. Let the court decide on how to deal with the abuse, when a person is charged.

Be cautious about unregulated investment schemes

When someone markets an investment to you, and tell you about the attractive return that you can get, you have to be very careful. Quite likely, they are exaggerating return to attract you. If you are greedy, and not careful, you will part with your money and may not get it back.

If the marketeer knows that the statements are false, he or she is dishonest. Quite often, the marketeer may be a young person who has just started work, and is taught about the sales pitch. This person (who may be a relative or friend) is not aware that the statement is false. The marketeer is not dishonest, but is gullible and naive, and so is the customer who buys the product.

The marketing of investments without registering a prospectus is illegal, under the law. The marketing of "pay back schemes" is also illegal, as it is tantamount to deposit taking, and a license is required.

In recent years, the people in charge in the regulatory agency did not  know how to deal with these illegal operations, so they have not taken steps.

One day, and I hope in the near future, they will realize that it is their duty to act, and many people will then be arrested. Do not fall in the trap, thinking that the lack of action by the regulator means that the investment scheme has been approved, or is legitimate.

Understand the Benefit Illustration for a ILP

Test your knowledge of how well you can read and understand the Benefit Illustration for an investment-linked policy.
Even if you don't know what to look for, you will get to know it, after reading this article.
You will be shocked to know that so much of your accumulated premium is taken away by the "effect of deduction".
http://tankinlian.com/admin/file.aspx?id=792&IID=799

So many people have invested in an investment-linked policy (ILP) without knowing that they are getting a poor yield.

Fake degree submitted by foreigners

7 April 2013 (not published by St Times)

Editor
Forum Page

Straits Times

Fake degree submitted by Foreigners

I wish to suggest how to deal with the fake degrees submitted by foreigners who wish to work in Singapore.

Under the current system administered by the Ministry of Manpower, the education and other details of the foreigner are provided by the employer  who makes the application for the work pass.

I suggest that these details should be submitted by the foreigner, who are told that 

any false information, such as using a fake degree from a degree mill or using a 

forced certificate will result in the cancellation of the work pass, repatriation or 

imprisonment. This should deter many foreigners from submitting the fake qualifications.

I do not expect the Ministry to carry out a detailed check on each applicant, unless

a whistle has been blown. Alternatively, a random check can be carried out after the work pass has been issued. It is more important to have the deterrent impact by following the new practice. 

Tan Kin Lian

Singapore blue chips and REITS

The data on Singapore blue chips and REITS have been updated to 11 April 2013 in www.fisca.sg available only to members.

Review of Benefit Illustration - Life Insurance

Many young adults, after starting to work, are approached by a lief insurance agent and advised to buy a life insurance policy to get protection against premature death and critical illness and to save for the future.
They are not aware of the negative aspects of the policy and will usually regret their purchase decision a few years later. When they terminate the policy, they will lose several thousand dollars in their savings.
To avoid this loss, they should get an independent review of the policy, before they buy it. Read this article.

http://tankinlian.com/admin/file.aspx?id=791&IID=798

Review of benefit illustration - Retirement plan

In the past years, several retirement plans have been introduced by life insurance companies targeting at cash rich consumers to invest their retirement savings.   If you have been approached to take up such a plan, you must be careful to know its good and bad points. If you wish to have an independent review of and explanation of this plan, and more importantly, to learn a better way to invest your savings, read this paper.  http://tankinlian.com/admin/file.aspx?id=790&IID=797 

Financial Literacy Test

Take this financial literacy test and see if you can trust your own financial decisions.
http://tankinlian.com/admin/file.aspx?id=789&IID=796

Appeal on IMF Loan

Hi Kin LIan,
Our appeal against the HIgh Court decision in the IMF loan suit will be heard in the Supreme Court on 9 April at 2.30pm. I hope that you will be able to attend.
Would you be kind enough to put up a notice about the appeal on your blog?
Regards,
Kenneth Jeyaretnam
Secretary General
Reform Party

The teaching environment in Singapore

Teaching is a good job. I like teaching and have spent the past six years as an adjunct professor. This is not a relief teaching job. I teach one full course. The full time professor usually takes two or three courses. 

I know that teaching has its challenges, whether it is at primary, secondary or tertiary levels. There is a need to manage the expectations of the school, the parents and the teachers. The teacher has to prepare the lesson, present it in a lively manner, mark the student's work and handle admin and extra-curricular activities.

The problem is the heavy work load and "meeting expectations". This is where the teacher can play a part in helping to set the expectations.

Teachers find the appraisal system to be another source of stress. Most of them want to be at the top of the appraisal, and work hard to be at the top. Many get disappointed when they do not achieve the goal, especially if the appraisal system is "not transparent".

I have a different attitude towards the appraisal system. I know that many people have to be average, in order for some to be outstanding. We can do our best to be outstanding, but do not need to over-do it and engaged in politics and other negative behavior. We only need to do our best.

The appraisal of my teaching is average in most terms. I accept this appraisal, although I wished that it was better. I try to change the teaching method and see if I can get a better score the next time round.

I hope that these few points will help our highly stressed teachers to look at the current teaching environment in a different angle, and make teaching to be more enjoyable for them.

Someone said, "We cannot change the environment, but we can change our attitude towards it".

The Government has a duty

There are many scams happening in Singapore and some had been allowed to continue for years. These potential scams include the gold bar schemes, land banking, time sharing, forex training courses, investment schemes and the like.

Apologists for the Government said, "People should take care of themselves. They cannot expect the Government to be a nanny to take care of them all the time."

This statement is quite ridiculous. It comes from people who do not think but just feel comfortable about echoing the Government propaganda.

I do not expect the "authority" to stop all scams. But if someone had reported a potential scam, and the evidence is quite obvious, and the scam is affecting many people, the "authority" should pay attention and see what can be done. It is easy for the "authority" to send someone to attend these events and collect evidence. They can invite the organizers for a chat and advice them about the law on cheating or selling securities without a licence.  The existing laws are sufficient to stop these scams.


It is a breach of duty of the Government to sit idly by and watch more people being caught by the scams.

The excuse, "we do not want to be a nanny state" allows the law enforcement officers to neglect their primary duty.

Kopitiam card

I received an invitation by Kopitiam to visit their new outlet near my home. They sent a Kopitiam card with $2 pre-loaded and waiver of $2 card fee.

I visited the outlet and topped up $10. Their machine accept only notes and do not provide any change. It is easy to use - the best that I have encountered.

The Kopitiam card offered a 10% discount for purchases at their outlet.

This is the best loyalty card that I have experienced. I congratulate Kopitiam for their excellent card and loyalty program. I intend to use the Kopitiam card often.

Note: I do not use the credit card or telephone loyalty points as it is too troublesome for me.