I registered for a Skype Out account. It allows me to call anyone (on their mobilephone or fixed line) from my PC.
I only pay the local call charges to Skype.
The quality of the call is good. As I am making the call, it is quite easy for me to go to the PC to do it. The other party receives the call on their mobilephone or telephone, in the usual way.
I encourage people to learn how to use Skype Out. It can save a lot of money on overseas calls.
Monday, December 25, 2006
Know Your Insurance
If you know about the insurance products, you can make the right choice and save a lot of money.
You can learn about the product in a fun way at this website: Know Your Insurance
You can do a simple test to check your understanding. It is interesting and fun.
The most popular products viewed by more than 1,500 visitors are:
Investment Linked Plan
Medical Insurance
Motor Insurance
i-Young
Manage Your Money
Life Annuity
Saving for Education
Invest Your CPF
You can learn about the product in a fun way at this website: Know Your Insurance
You can do a simple test to check your understanding. It is interesting and fun.
The most popular products viewed by more than 1,500 visitors are:
Investment Linked Plan
Medical Insurance
Motor Insurance
i-Young
Manage Your Money
Life Annuity
Saving for Education
Invest Your CPF
Sunday, December 24, 2006
STI Tracker Fund
I just read the report of the STI Tracker Fund, managed by StateStreets. I am quite impressed with their results.
The fund started in April 2002. During the past 50 months, it earned an average annual return of 11.6%, compared to a benchmark return of 7.9%.
During the latest 12 months to 30 June 2006, it earned 13.4%, compared to the benchmark of 10.1%. I have since checked with StateStreet. They confirmed that the ST Index does not include dividend.
So, the better performance of the fund is largely due to the dividend, which is close to 3% per annum. After taking this into account, the return from the ST Tracker Fund is almost the same as the market. The annual cost of this fund is only 0.3%.
I had invested in the STI Tracker Fund previously. It earned a magnificent return. I realised my investment, as the market is too high. I shall wait for another time to re-invest in this fund.
The fund started in April 2002. During the past 50 months, it earned an average annual return of 11.6%, compared to a benchmark return of 7.9%.
During the latest 12 months to 30 June 2006, it earned 13.4%, compared to the benchmark of 10.1%. I have since checked with StateStreet. They confirmed that the ST Index does not include dividend.
So, the better performance of the fund is largely due to the dividend, which is close to 3% per annum. After taking this into account, the return from the ST Tracker Fund is almost the same as the market. The annual cost of this fund is only 0.3%.
I had invested in the STI Tracker Fund previously. It earned a magnificent return. I realised my investment, as the market is too high. I shall wait for another time to re-invest in this fund.
Is it time to move out of the stock market?
Dear Mr Tan,
My family and I have invested $130,000 in Growth and Balanced fund managed by Income for the past two years. The average returns is about 20%. In view of the record high of stock market achieved in the world, there is potential correction in the near future.
To preserve our investment, we intend to continue the investment with Income instead of surrender the policy. Please advice me should I switch to conservative fund or any recommendation from you.
EE
------------
Dear EE
In my case, I have decided to stay largely invested in the Growth Fund. It has 30% invested in bonds, so it is not so risky.
In the case of the Balanced Fund, it is 50% invested in bonds, which is less risky.
If you feel uncomfortable about the level of the stockmarket, you can switch to the Conservative Fund (which has 70% invested in bonds). You can switch back to the Growth Fund at a later date.
Two months ago, I sold by ST Tracker Fund and re-invested in the Money Money Fund. This fund earns an interest rate of between 3% to 3.5% per annum. Since then, the ST Tracker has moved up further. So, one can never find the right time.
Tan Kin Lian
My family and I have invested $130,000 in Growth and Balanced fund managed by Income for the past two years. The average returns is about 20%. In view of the record high of stock market achieved in the world, there is potential correction in the near future.
To preserve our investment, we intend to continue the investment with Income instead of surrender the policy. Please advice me should I switch to conservative fund or any recommendation from you.
EE
------------
Dear EE
In my case, I have decided to stay largely invested in the Growth Fund. It has 30% invested in bonds, so it is not so risky.
In the case of the Balanced Fund, it is 50% invested in bonds, which is less risky.
If you feel uncomfortable about the level of the stockmarket, you can switch to the Conservative Fund (which has 70% invested in bonds). You can switch back to the Growth Fund at a later date.
Two months ago, I sold by ST Tracker Fund and re-invested in the Money Money Fund. This fund earns an interest rate of between 3% to 3.5% per annum. Since then, the ST Tracker has moved up further. So, one can never find the right time.
Tan Kin Lian
Secure Banking
I used internet banking. My bank recently sent a security device to me. I had a lot of trouble with the registration of the device. This is now over.
Now, I have problem in keeping this device. As I do not use it often, it tends to be misplaced.
Later, I imagine that other banks and financial firms will send their security device to me. It must be very troublesome to keep so many devices in my home, and my office.
I suggest that the Monetary Authority of Singapore encourage the financial firms to use a common device, so that each customer need only to keep one security device (like one NRIC). This device should be registered with an independent party, and can be used by all financial firms.
If the customer is required to keep only one device, which can be used for multiple purpose, it is likely to be more convenient and practical.
Now, I have problem in keeping this device. As I do not use it often, it tends to be misplaced.
Later, I imagine that other banks and financial firms will send their security device to me. It must be very troublesome to keep so many devices in my home, and my office.
I suggest that the Monetary Authority of Singapore encourage the financial firms to use a common device, so that each customer need only to keep one security device (like one NRIC). This device should be registered with an independent party, and can be used by all financial firms.
If the customer is required to keep only one device, which can be used for multiple purpose, it is likely to be more convenient and practical.
Customer is convinced with Enhanced Incomeshield
Dear Mr Tan,
What is your view on the following comments on one of H&S plan, which seems likely to be NTUC product.
One particular famous hospital & surgical plan requires the insured to call the insurer 4 days prior to admission for non-emergency cases.
Reason? To seek the insurer permission in admission. This means the insurer can dispute the reason for admission. In the policy contract itself, it is clearly stated that any dispute will be referred to a 3rd party for mediation. Come on, a sick person cannot go for mediation and family members main priority is to get the person's condition treated. I feel that this is a joke.
Unfortunately, this is no laughing matter. Can anyone imagine the implication of a potential dispute? What happens if the insured's health deteriorates as the result of the dispute? What happens if he dies? Will the insurer be held liable? Will the adviser be liable because he was the party who had help transacted the purchase of the policy? To me this is a useless insurance. A good insurance is one that gives you the peace of mind.
On the day when you need it, it helps you. A useless insurance is one that give you no peace of mind. On the day when you need it, it can bite you and tell you to go for mediation to settle the dispute.
AP
--------------------
Dear AP
The plan that you described is our Enhanced Incomeshield plan. You can find the details of this plan, including the 4 day advanced notice, covered in this FAQ. This requirement will be exercised fairly and in the interest of the policyholder. The main aim is to prevent over charging by the doctor, with the collaboration of the policyholder.
More details are in:
http://www.income.coop/insurance/enhancedshield/faq.asp
---------------------------
Hi Mr Tan,
Thanks for the info and your patience. Just signed up Preferred Incomeshield plan and riders for my wife and myself. Also bought a i-gift plan for my SRS.
Merry Xmas and Happy New Year.
AP
What is your view on the following comments on one of H&S plan, which seems likely to be NTUC product.
One particular famous hospital & surgical plan requires the insured to call the insurer 4 days prior to admission for non-emergency cases.
Reason? To seek the insurer permission in admission. This means the insurer can dispute the reason for admission. In the policy contract itself, it is clearly stated that any dispute will be referred to a 3rd party for mediation. Come on, a sick person cannot go for mediation and family members main priority is to get the person's condition treated. I feel that this is a joke.
Unfortunately, this is no laughing matter. Can anyone imagine the implication of a potential dispute? What happens if the insured's health deteriorates as the result of the dispute? What happens if he dies? Will the insurer be held liable? Will the adviser be liable because he was the party who had help transacted the purchase of the policy? To me this is a useless insurance. A good insurance is one that gives you the peace of mind.
On the day when you need it, it helps you. A useless insurance is one that give you no peace of mind. On the day when you need it, it can bite you and tell you to go for mediation to settle the dispute.
AP
--------------------
Dear AP
The plan that you described is our Enhanced Incomeshield plan. You can find the details of this plan, including the 4 day advanced notice, covered in this FAQ. This requirement will be exercised fairly and in the interest of the policyholder. The main aim is to prevent over charging by the doctor, with the collaboration of the policyholder.
More details are in:
http://www.income.coop/insurance/enhancedshield/faq.asp
---------------------------
Hi Mr Tan,
Thanks for the info and your patience. Just signed up Preferred Incomeshield plan and riders for my wife and myself. Also bought a i-gift plan for my SRS.
Merry Xmas and Happy New Year.
AP
Wednesday, December 20, 2006
Mental exercise is useful for seniors
Extracted from www.channelnewasia.com
Mental exercises help keep seniors agile: study
CHICAGO - Scientists have been preaching the benefits of mental exercise to seniors for years, but a new study may be the clincher that people in their golden years have been waiting for.
The study found that a little mental workout goes a long way, and that a sharper mind can make it easier to cope with everyday tasks such as driving, bookkeeping, shopping and cooking that get more challenging with age.
"Our findings clearly suggest that people who engage in an active program of mental training in late life can experience long-lasting gains from that training," said Michael Marsiske of the University of Florida.
The volunteers in the study did a modest amount of problem-solving and memory enhancing training, no more than 18 hours in any given case. But the pay-off was dramatic in the short-term.
Follow-up testing showed that the mental improvements were sufficient to counteract the cognitive declines seen over a seven-to-14-year period in older adults without dementia.
--------------------
Suggestion: Practice Logic9 (Sudoku) for mental exercise. Keep your mind alert.
Logic9
Mental exercises help keep seniors agile: study
CHICAGO - Scientists have been preaching the benefits of mental exercise to seniors for years, but a new study may be the clincher that people in their golden years have been waiting for.
The study found that a little mental workout goes a long way, and that a sharper mind can make it easier to cope with everyday tasks such as driving, bookkeeping, shopping and cooking that get more challenging with age.
"Our findings clearly suggest that people who engage in an active program of mental training in late life can experience long-lasting gains from that training," said Michael Marsiske of the University of Florida.
The volunteers in the study did a modest amount of problem-solving and memory enhancing training, no more than 18 hours in any given case. But the pay-off was dramatic in the short-term.
Follow-up testing showed that the mental improvements were sufficient to counteract the cognitive declines seen over a seven-to-14-year period in older adults without dementia.
--------------------
Suggestion: Practice Logic9 (Sudoku) for mental exercise. Keep your mind alert.
Logic9
What is the cost of term assurance?
Customer: Mr Tan, I read your posting about low cost term insurance. How much does it cost to insure $100,000?
For Male, Non-smoker
If you are aged 25, you can insure for $100,000 on a decreasing term assureance for 20 years for only $4.40 per month. It is quite painless to provide a sum sum for the security of your dependents.
For a female, the cost is much lower. Maybe, up to 50% lower!
Under a decreasing term, the coverage reduces by $5,000 a year. Under the level term, the coverage remains at $100,000 throughout the period.
For Male, Non-smoker
Monthly Premium to insure $100,000 over 20 years
Entry Level Decreasing
Age
25 $10.70 $4.40
30 $13.40 $5.50
35 $18.90 $7.80
If you are aged 25, you can insure for $100,000 on a decreasing term assureance for 20 years for only $4.40 per month. It is quite painless to provide a sum sum for the security of your dependents.
For a female, the cost is much lower. Maybe, up to 50% lower!
Under a decreasing term, the coverage reduces by $5,000 a year. Under the level term, the coverage remains at $100,000 throughout the period.
New product: No load saving plan?
As a consultant, I will be advising new clients (insurance companies) to introduce a "no load" insurance savings plan.
What are the features of this plan?
- can be an endowment or investment-linked plan
- 100% of the premium will be invested
- customers can buy this product directly
- advisers will be paid a salary plus a modest incentive
- a policy fee will be levied to cover the expenses
This product can offers a better return compared to bank deposits or unit trusts. Over a 20 year period, it should provide 10% to 30% more than similar products in the market.
How is this possible? The savings come from:
- higher productivity
- lower expenses
- less effort taken to market the product
- most customers will want to buy the product for their future financial planning
- existing customers will introduce their friends
- insurance advisers will be happy to earn a fixed salary plus incentives, i.e. the income is more predictable.
What are the features of this plan?
- can be an endowment or investment-linked plan
- 100% of the premium will be invested
- customers can buy this product directly
- advisers will be paid a salary plus a modest incentive
- a policy fee will be levied to cover the expenses
This product can offers a better return compared to bank deposits or unit trusts. Over a 20 year period, it should provide 10% to 30% more than similar products in the market.
How is this possible? The savings come from:
- higher productivity
- lower expenses
- less effort taken to market the product
- most customers will want to buy the product for their future financial planning
- existing customers will introduce their friends
- insurance advisers will be happy to earn a fixed salary plus incentives, i.e. the income is more predictable.
Consider an alternative to terminating your life insurance policy
If you terminate your life insurance policy, you get a cash value. This is usually quite low, and is less than the premiums that you have paid during the first 10 years.
The insurance company makes a profit on your terminated policy.
If you keep the policy for another 5 or 10 years, you may find that the cash value at the later date represents a good investment. In this case, it is better for you to take a loan and continue the policy (if the interest rate on the loan is low).
You have another option. You can sell your life insurance policy to a third party, who can offer you a higher value. The third party owns the policy and keeps it for another 5 or 10 years (or until the maturity date). They may find the return to be quite attractive.
You can study this arrangement, by asking your insurance company to quote:
- the cash value now
- the cash value in 5 or 10 years time
- the premium that you now pay
- you can calculate the yield for the next 5 to 10 years on this approach.
If the yield is 4% or better, it may be better to sell your insurance policy, rather than surrender it.
The insurance company makes a profit on your terminated policy.
If you keep the policy for another 5 or 10 years, you may find that the cash value at the later date represents a good investment. In this case, it is better for you to take a loan and continue the policy (if the interest rate on the loan is low).
You have another option. You can sell your life insurance policy to a third party, who can offer you a higher value. The third party owns the policy and keeps it for another 5 or 10 years (or until the maturity date). They may find the return to be quite attractive.
You can study this arrangement, by asking your insurance company to quote:
- the cash value now
- the cash value in 5 or 10 years time
- the premium that you now pay
- you can calculate the yield for the next 5 to 10 years on this approach.
If the yield is 4% or better, it may be better to sell your insurance policy, rather than surrender it.
Video recordings of the family
Over the past 20 years, I have kept video recordings of some family and events, e.g. visits to places of interest or overseas visits.
Recently, I transferred these video recordings into DVD. My adult children appreciated the recordings which showed what they were like when they were young. My mother, who is now in her early 80s also liked the recordings. There were also recordings of my father (who passed away about 10 years ago).
Recently, I transferred these video recordings into DVD. My adult children appreciated the recordings which showed what they were like when they were young. My mother, who is now in her early 80s also liked the recordings. There were also recordings of my father (who passed away about 10 years ago).
Invitations to Wedding
I have a friend who used to keep the invitations to wedding in a separate box. Many years later, he can recall, from the invitation cards, the weddings that he attended, the venues, the couples, dates, etc. It is also a good record of the parents.
I wanted to follow this good practice, but I never got round to do it. 25 years have since passed.
I wanted to follow this good practice, but I never got round to do it. 25 years have since passed.
Tuesday, December 19, 2006
Do not pay more than 6% on your loan
Are you paying too much interest on the loan taken under your life insurance policy? Some insurance companies charge as much as 8 percent per annum. More details at:
Policy loan
There is a bank willing to refinance your loan and to charge you only 6% per annum. If you are paying 8%, you can save 2% a year through this refinancing. If your loan is $10,000, you save $200 a year.
Policy loan
There is a bank willing to refinance your loan and to charge you only 6% per annum. If you are paying 8%, you can save 2% a year through this refinancing. If your loan is $10,000, you save $200 a year.
New way to buy insurance
In 2007, I will be helping two insurance companies (in Algeria and Indonesia) to allow their customers to buy insurance through new channels.
The customer can get information on low cost, good value products from the FAQ posted in the website. These products will also be actively promoted through the traditional channels, i.e. advertisements, point of sale promotions, promoters.
The potential customer can buy the products as follows:
- directly through the internet
- call the call center
- through an insurance adviser
The insurance adviser and call center will transact through the internet on behalf of the customer.
These products will be available at 5% to 15% lower than similar products in the market. The lower cost is possible, due to greater efficiency.
The customer service will also be greatly improved, i.e. convenient, transparent, prompt. Most transactions will be confirmed by SMS.
Find out more from:
IC21
The customer can get information on low cost, good value products from the FAQ posted in the website. These products will also be actively promoted through the traditional channels, i.e. advertisements, point of sale promotions, promoters.
The potential customer can buy the products as follows:
- directly through the internet
- call the call center
- through an insurance adviser
The insurance adviser and call center will transact through the internet on behalf of the customer.
These products will be available at 5% to 15% lower than similar products in the market. The lower cost is possible, due to greater efficiency.
The customer service will also be greatly improved, i.e. convenient, transparent, prompt. Most transactions will be confirmed by SMS.
Find out more from:
IC21
Should employer pay more CPF?
There is some discussion in the newspaper on the need for the employer to increase the contribution rate to the Central Provident Fund.
The final outcome is not significant in financial planning. It is clear that the CPF is no longer the sole source of funds for retirement.
Each person must have personal savings to ensure an adequate retirement. The CPF contribution can make an important portion of the total savings, but it has to be supplemented by personal savings.
I recommend that each person should have personal savings in a flexible investment account, such as the Flexi-Link that is offered by NTUC Income. We will make it easy for our policyholders to top up their savings in the Flexi-Link and enjoy bonus units of 2% (to reduce the upfront cost).
We will also make it easy for topping up. Just call our hotline, and make your payment within 14 days. If you invest with CPF, we will arrange for deduction from CPF.
The final outcome is not significant in financial planning. It is clear that the CPF is no longer the sole source of funds for retirement.
Each person must have personal savings to ensure an adequate retirement. The CPF contribution can make an important portion of the total savings, but it has to be supplemented by personal savings.
I recommend that each person should have personal savings in a flexible investment account, such as the Flexi-Link that is offered by NTUC Income. We will make it easy for our policyholders to top up their savings in the Flexi-Link and enjoy bonus units of 2% (to reduce the upfront cost).
We will also make it easy for topping up. Just call our hotline, and make your payment within 14 days. If you invest with CPF, we will arrange for deduction from CPF.
Monday, December 18, 2006
167,000 tax payers claim tax relief on life insurance premiums
167,000 tax-payers claimed relief on their life insurance premiums. If their CPF contribution is less than $5,000, they can claim life insurance premium for the difference up to $5,000.
The total amount of relief claimed is $313 million. The average is $1,900.
Groups who might be claiming this relief are:
1) Foreigners working in Singapore. They don't have CPF contributions so they can claim up to $5,000 in insurance premiums paid (subject to a cap of 7% of sum assured).
2) Self-employed persons.
3) Older (retired or semi-retired) persons who have low or no CPF contributions.
4) Permanent residents in their 1st and 2nd year, when they pay less than the normal rate of contribution.
The total amount of relief claimed is $313 million. The average is $1,900.
Groups who might be claiming this relief are:
1) Foreigners working in Singapore. They don't have CPF contributions so they can claim up to $5,000 in insurance premiums paid (subject to a cap of 7% of sum assured).
2) Self-employed persons.
3) Older (retired or semi-retired) persons who have low or no CPF contributions.
4) Permanent residents in their 1st and 2nd year, when they pay less than the normal rate of contribution.
Faster settlement of Incomeshield claims
In July, the Ministry of Health published statistics about the speed of settlement of our Incomeshield claims. Only 1% was settled within 7 days. It took an average of 28 days to settle the claims.
This was at a difficult time. We were overwhelmed with the large volume. We were in the midst of migrating a system.
The situation has improved considerably. For the latest month, i.e. November, we settle 73% of the claims within 1 week. The average time taken to settle all claims is 4 days. This makes us better than the industry average.
We were able to settle the claims promptly, as most of them are processed automatically. We only need to examine the large claims in more detail.
This was at a difficult time. We were overwhelmed with the large volume. We were in the midst of migrating a system.
The situation has improved considerably. For the latest month, i.e. November, we settle 73% of the claims within 1 week. The average time taken to settle all claims is 4 days. This makes us better than the industry average.
We were able to settle the claims promptly, as most of them are processed automatically. We only need to examine the large claims in more detail.
Sales of i-Gift trebled during the latest week
i-Gift is our annuity plan that offers a fixed income for a specific term (10 to 15 years). The yield is about 3.5% or higher, and is guaranteed.
During the previous weeks, the average sales is 100 policies for $6 million. For the latest week, ending 16 December, the sales increased by 3 times. A total of 350 policies were sold for $18 million.
Why? The current tranche of i-Gift will be withdrawn soon. The next tranche will have a slightly lower return, due to the recent decline in interest rate.
Our astute policyholders are rushing to catch this great offer before its withdrawal.
During the previous weeks, the average sales is 100 policies for $6 million. For the latest week, ending 16 December, the sales increased by 3 times. A total of 350 policies were sold for $18 million.
Why? The current tranche of i-Gift will be withdrawn soon. The next tranche will have a slightly lower return, due to the recent decline in interest rate.
Our astute policyholders are rushing to catch this great offer before its withdrawal.
Special incentive for family members
Some policyholders have asked me to give special incentives for their family members to take insurance from NTUC Income.
In principle, this is possible. The special incentive depends on the type of insurance plan that is being purchased.
If you are a policyholder for many years, and now wish to introduce your adult children to insure with NTUC Income, send an e-mail to me. I shall ask my insurance adviser or consultant to follow up with you.
In principle, this is possible. The special incentive depends on the type of insurance plan that is being purchased.
If you are a policyholder for many years, and now wish to introduce your adult children to insure with NTUC Income, send an e-mail to me. I shall ask my insurance adviser or consultant to follow up with you.
Income Tax Relief
A tax payer is allowed to deduct up to $5,000 of life insurance premium (less CPF contribution) from taxable income in a year.
For foreigners and self employed who do not contribute to CPF, they can enjoy this tax relief. I understand that 150,000 people take advantage of it each year.
If you are in this category, you should invest in a plan to enjoy the relief, before 31 December.
For foreigners and self employed who do not contribute to CPF, they can enjoy this tax relief. I understand that 150,000 people take advantage of it each year.
If you are in this category, you should invest in a plan to enjoy the relief, before 31 December.
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