Monday, October 31, 2011

consumer confidence here hits 2-year low

in the recently released nielsen global consumer confidence index for singapore, it showed a drop to 94 points in the 3 months to september compared to the earlier quarter. this figure is even lower than the previous low of 96 in the 3rd quarter of 2009.

a number above 100 indicates positive consumer sentiment, while a figure below 100 indicates the opposite which is pessimism.

this survey is part of the nielsen global online survey which polled more than 28,000 consumers in 56 countries throughout the asia-pacific, europe, latin america, the middle east, africa and north america.

the top 3 concerns:

a. the economy (27%)
b. job security (20%) and
c. the increasing food prices (10%).

generally, approx 67% have indicated they plan to put spare cash into savings and 31% of consumers plan to invest in stocks and mutual funds which is much higher than the global average of 18%.

ms grace liu, head of consumer research at nielsen singapore said this is a signal for an appetite for wealth management products and services.

my comments:

this survey's findings is in-line with our government's warning that our country will see slower economic growth in the future as in our prime minister lee hsien loong's recent speech in parliament;

"Over the next 10 years, we've set a target of 3%-5% [annual economic growth], but I would say if we can make three-plus percent consistently over the next 10 years we've had a good decade."

mr lee added:

"singapore faces a "real risk of a protracted global slowdown" as the U.S. and Europe struggle with "deep and structural problems."

i'm not an economist but my understanding is that slower economic growth is usually preceded by lower demand for goods and services which will translate to more people receiving the pink slip.

although 65% of respondents here said this is not a good time to buy things that they want or need, i see a contrarian picture in terms of the data from 2 most prized items like housing and automobiles.

despite our government's property cooling measures, property prices here continue to head north and for automobiles, the high price of a COE has not curbed the appetite to own one (or more) which explains why the average loan for a car has now reached $85,105.

as these are big-ticket items, and the financial commitment to repay the loans are longer term in nature, i wonder whether these buyers have done their 'homework' before signing on the dotted line.

with the current interest rate environment at all time lows, and any future increase in interest rates will certainly tip the scales in terms of the affordability in the repayment of loans.

and taking up car ownership come with high costs, both for the usage and maintainence of the vehicle and because car loans fall into my bad debt category, i have always adviced young people and couples to forgo car ownership.

ms grace liu said the survey provided significant opportunites for financial service providers in our country and i agree but my hope is that our consumers will place wealth protection planning at the top of their priority list because when it comes to the crunch, there is no turning the clock back.

Sunday, October 30, 2011

mas macroeconomic review - october 2011

very recently, our monetary authority of singapore has just issued its' macroeconomic review.

the macroeconomic review is published twice a year in conjunction with the release of the MAS monetary policy statement. the review documents the economic policy group's (EPG) analysis and assessment of macroeconomic developments in the singapore economy and shares with market participants, analysts and the wider public, the basis for the policy decisions conveyed in the monetary policy statement. it also features in-depth studies undertaken by EPG on important economic issues facing singapore. the mas macroecominc review can be viewed at:

my comments:

the mas macroeconomic review is a lenghty one coming in at around 109 pages. and credit to the mas for 'telling-it-as-it-is' or calling a spade, well, a spade.

with the new managing director of the imf, ms christine lagarde warning of the world entering into a dangerous new phase, and world bank chief, mr robert zoellick saying that the recent europe debt deal just basically buying time. mr zoellick expressed his hope that the upcoming G20 summit in france will go beyong the liquidity crisis and build foundations for global growth.

the mas macroeconomic review generally presents a realistic picture of the dark clouds in the horizon. my take is that hiring is expected to slow down while inflation which is currently at 5.5% will moderate but continue to stay high with a projected rate of 5% for the first half of 2012 due mainly to record high prices of COEs stemming from our government's policy to curb the growth of the vehicle population and the other being fewer cars being scrapped.

despite the soaring price of a COE and according to the credit bureau singapore, the average car loan taken-up has revved up in size by nearly 40% since 2009 to $85,105.00.

and with properties continuing to chalk up price increases with no-cooling off in the hdb market either, it seems many people are throwing caution to the wind to own both cars and a place to call home.

therefore, with the headwinds coming from both the usa and eurozone, our government has warned of the impact to our economy and it is clear that the consumer here should not continue to spend like there's no tomorrow.

with all the uncertainties hanging over our heads, perhaps this is also an opportune time to review one's financial health and be more prudent with our finances.

Saturday, October 29, 2011

young working singaporeans not saving enough

in a recent survey by hsbc's the future of retirement programme, an independent study of global retirement trends, the key findings were:

a. 48% of over 1,000 respondents aged 30 to 39 say they have no short-term
b. only 30% of those who were married or living together aged 40 to 49 are
protecting their assets
c. 34% of those who are aged 50 to 59 do not have retirement plans
d. only 12% have undertaken tax planning
e. 24% of parents do not have any life insurance policy
f. 53% of all parents do not have individual term life insurance despite
having dependent children
g. 8 in 10 parents have not made a will
h. for parents who have financial plans for their families, 24% do not have
any type of life insurance in their plans
i. maintaining a private retirement fund or life insurance rank above
investing in stocks and shares with 20% and 12% respectively

and the survey also found that singaporean men are more proactive than women in making financial decisions concerning both retirement planning and household budgeting.

my comments:

the top finding of not having any short-term savings is even more stark as compared to a recent study entitled, "the happiness report" by grey group, a global communications firm which found that almost 1 in 2 respondents were unhappy about the fact they had insufficient personal savings.

i can certainly understand the younger gen's propensity to enjoy instant gratification, and one of the gizmos to attract die hard apple fans was the october 28 singapore release of the iphone 4s which saw many hundreds queuing long hours just to be amongst the first to own steve jobs's last biggie apple product before his recent most untimely demise.

and i can definitely attest to hsbc's findings to be pretty consistent in terms of my 14 years of experience in the financial industry working with many hundreds of individuals and families in singapore.

yes, dear reader, there is still so much more ground to cover with regard to just wealth protection planning alone which is simply skirting the surface (although an important one) of wealth management.

and as can be seen, a rather shocking 8 in 10 parents have not made a will which simply sums up the dismal status of the financial picture of the population here.

Friday, October 28, 2011

has your wealth protection portfolio been stress tested?

have u heard of governments putting the banks in their country to stress testing?

one recent example was in june 2011 when the european banking authority did just that and out of 90 european banks in 21 countries that were put to the test, 5 in spain, 2 in greece and 1 in austria failed to make the cut.*


one analyst, mr mark o'sullivan of foreign exchange firm, currencies direct was quoted as saying:

"What seems to have occurred is a compromise amongst European banking regulators, with many questioning if the bar had been set way too low in testing the European banking sector,"

but the stress test should have at least achieved the objective assessment of the banks' ability to survive future economic shocks.

my comments:

Thursday, October 27, 2011

how to choose a financial advisor?

over my 14 years in the financial industry, i've literally seen the market share of weighted new life business by the tied channel falling substantially from a near monopoly (when i first joined promiseland independent) to just 48% as at end of the second quarter of 2011.*


today,it seems that more consumers are turning to bancassurance with 34% of sales and the fa channel taking another 13% with direct sales making up the remaining 5%.

why does the bancassurance channel command such a high share of the new life business market?

perhaps it may be due to the fact that most of us have a relationship with a bank or several banks and therefore, our banks (both local and foreign) have a big share of our business which is not just confined to plain vanilla savings and deposits.

and for the fa channel, we have seen our share of the pie grow substantially from just 1% in the late 90s to more than 13% at the present time.

has the basics changed?

i submit no, because there's a saying; the more things change, the more they stay the same.

although today's consumer has grown to be more educated and sophiscated, and yet, they will still have to rely on a good navigational tool in terms of choosing whom they should engage to build a road-map for their financial health and ultimately, to achieve financial independence.

my comments:

one of the keys in engaging a financial advisor lies in the latter being truly unbiased and always focused on the big picture which is serving the client's interests.

therefore, the navigational tool should point to the financial advisor to have no pre-set mindset in what to recommend or not to recommend.

in other words, the financial advisor should not have any pre-conceived 'top-of-the-head' recommendation/s and always look at the whole unvierse of solutions available in his/her arsenal of offerings from diverse product manufactures.

i say this because i have encountered many instances where the financial advisor has shown a preference of whole life over term solutions, or term over whole life, or an investment-linked policy over term, and so on and so forth.

as further proof of this, should u surf the many on-line forums, there should be clear evidence of a great divide in the on-going whole life versus term thingy or the aeons old tussle of 2 opposing camps - one being the btitr (buy term invest the rest) corner and in the other, those who propagate regular premium investment-linked products.

having said this, the other litmus test lies in determining whether the financial advisor works for himself/herself or is serving the client's interests but this is easier said than done.

it has been said repeatedly that one of the best ways to find out is to seek a financial advisor who is not commissioned based but renumerated by charging fees.

this may be opening the so-called pandora's box and i hope i say this right in that there is no perfect model for renumerating a financial advisor, although the vast majority of financial advisors do not charge fees.

a fee based approach may appeal to some while it may also be repulsive to others.

and probably one of the biggest bugbear to a fees only model is that many are not prepared to pay and there will be many more who are not able to pay. and i suspect those who need financial planning most will be the masses of people who need it but can not afford to pay any fee, no matter how 'affordable'.

the other question is in how much to pay? this is of significance because there is an urgent need to standardise the range of fees payable.

but one of the best ways to navigate the maze of engaging the right financial advisor is to sit through meetings and gauge the financial advisor's advice to be in-sync with your interests.

to recap, shortlist your financial advisor to one who is truly unbiased and go for the renumeration model that u are most comfortable with.

just my 2 cents' worth.

Wednesday, October 26, 2011

call for medisave to cover more ailments

some mps and health industry experts are calling on the government to further liberalise the use of medisave to cover a wider variety of ailments such as:

a. covering more outpatient treatments such as those for chronic ailments
b. costly items, such as scans which are presently
allowed only for cancer patients

and they are also pointing out that medisave usage should be revised yearly to keep up with the rising cost of living.

dr lam pin min, head of the government parliamentary committee (GPC) for health, further suggested that government subsidies be increased for the lower- and middle-income groups as the rise in medical costs outstrips wage increases.

my comments:

our government has long ago recognised the need to expand the use of medisave and since october 01, 2006, medisave has been extended to cover outpatient treatment for specified chronic diseases under the chronic disease management program (CDMP) and the number of chronic diseases currently include:

1. diabetes mellitus
2. hypertension
3. lipid disorders
4. stroke
5. asthma
6. chronic obstructive pulmonary disease
7. schizophrenia
8. major depression
9. dementia (from november 01, 2011)
10. bi-polar disorder (from november 01, 2011)

how does the chronic disease management program work?

For each bill, patients will only need to pay the first $30 of the bill (as the deductible) as well as 15 per cent of the balance of the bill. Medisave can be used to pay for the remaining amount. This is regardless of whether the bill is for a one-off visit or a package.


A deductible of $30 will be set on each outpatient bill. Bills below $30 will continue to be paid in cash;


A co-payment (in cash) of 15% on each outpatient bill in excess of the deductible will be set; and

Annual withdrawal limit:

Withdrawals will be subject to an annual outpatient withdrawal limit of $300 per Medisave account*. Patients can also use the Medisave of their immediate family member(s) to pay for their treatment, up to a limit of $300 per year per account. A maximum of up to 10 accounts may be used.

*will be raised to a limit of $400 per year per account from next year.

and since july 01, 2011, medisave has also been allowed to be used for health screenings such as:

1. mammogram - applicable to women above 50 years of age and above
2. colonscopy - applicable to persons aged 50 years of age and above

Women aged 50 and above can use their own or their immediate family member’s Medisave for their screening mammograms at approved mammogram centres. Under the Medisave300 scheme, up to $300 per Medisave account a year can be used for screening mammograms from 1 Jul 2011.

Persons aged 50 and above can use their own or their immediate family member’s Medisave for their screening colonoscopies at approved colonoscopy centres. The medisave withdrawal limits for a colonscopy with related hospital charges are $1,250 and $1,550 (with removal of polyps).

although i can see the need to further enhance the use of medisave, there is the dilemma of ensuring balances in the medisave account are there when needed.

adding to this equation is the expected kicking-in of the new formula* for determining the interest rates in the cpf special, medisave and retirement accounts, come january 01, 2013. for example, if the new formula has been implemented, then the interest earned would have been lower because the 12-month average yield of the 10YSGS plus 1%, from 1st September 2010 to 31st August 2011, works out to be just 3.30%.

*Savings in the Special and Medisave Account (SMA) earn 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%

and then there is the other factor of longer life expectancy which cannot be ignored as more people are expected to live past their 80s and 90s.

all-in-all, our government has been continually confronted with the rather perplexing problem of further enhancing the use of medisave which gives rise to the probability of the faster depletion of medisave savings and therefore, may not meet the stated objective of having sufficient medisave funds to last for one's lifetime.

happy diwali

to my clients, colleagues, friends and all indians, on the auspicious occasion of deepavali, please accept my very best wishes for good health, laughter, peace, prosperity and wealth today and long into the future.

happy diwali!

Tuesday, October 25, 2011

aia - revision of crediting rates for aia platinum legacy series

we have just received this memo from aia:

we would like to inform u that in view of the current interest rate environment, aia will be revising the crediting rates for aia platinum legacy series from october 04, 2011.

us treasury yields have dropped significantly since end-dec 2010 and to all-time lows for majority of the benchmark treasuries. such movements are triggered by risk aversion and flight-to-quality flows on the back of rising concerns over the developed nations' growth momentum, eurozone debt crisis and financial health of the european banks.

over the period from 31 december 2010 to 16 september 2011, 10-year and 30-year treasury yields moved by -1.248% and -1.022% respectively. over the period from 16 may 2011 to 16 september 2011, 10-year and 30-year treasury yields moved by -1.099% and -0.959% respectively.

revised crediting rates:

for aia platinum legacy and aia platinum legacy preserver, the current crediting rates of 4.75% and 4.20% respectively will be effective on or before october 03, 2011.

but the revised crediting rates of 4.50% and 4.00% for aia platinum legacy and aia platinum legacy preserver respectively will be effective on or after october 04, 2011.

and for all scheduled premiums and top-ups on or after september 21, 2011 the revised crediting rates will apply.

my comments:

it is probably inevitable that due to the current interest rate environment, aia will have to revise the crediting rates. i suspect this may be so for other insurers as well.

but aia has been generous in allowing proposals submitted before october 04, 2011 with an extension of the payment of premiums and the other condition being the policy must be incepted on or before november 30, 2011 to enjoy the previous crediting rates.

Monday, October 24, 2011

axa life - launch of mum's advantage/mum's advantage plus

tomorrow, axa life will be launching their latest product, mum's advantage/mum's advantage plus?

what is mum's advantage/mum's advantage plus?

Mum’s Advantage/Mum’s Advantage Plus consists of 2 policies – a MumCare/MumCare Plus policy and a INSPIRE flexi2 policy.

MumCare/MumCare Plus is a 3-year / 6-year single premium term plan that offers coverage for an expectant mother against death and pregnancy complications. it also provides hospital care benefit should the expectant mother gets admitted to hospital due to child birth complications. the coverage also extends to the child for congenital illnesses benefit and hospital care benefit for the child.

INSPIRE flexi2 is a whole life, regular premium investment-linked plan which allows the flexibility to choose your own insurance cover and premium amount to meet your personal needs.

Under Mum’s Advantage/Mum’s Advantage Plus, the Mother can opt to transfer INSPIRE flexi2 to the life of the child at any time after the child is born*, i.e. life assured becomes the child instead of the mother but the ownership of the INSPIRE flexi2 remains with the mother provided the INSPIRE flexi2 has not lapsed or been terminated at the time of notification to axa life of the transfer.

*must be within 60 days from the date of birth of the child.

if axa life is notified within 60 days from the date of birth of the child, and for a sum assured less than or equal to $200,000, there will be no requirement for underwriting.

however, if either axa life is notified after 60 days from the date of birth of the child and or the sum assured is more than $200,000, the policy will be subject to the prevailing underwriting guidelines.

Upon transfer of INSPIRE flexi2 to the Child, the coverage on the life of the Child will be effective on the next policy commencement day, subject to complete documentation and acceptance by axa life (if subject to underwriting). the coverage of the mother will cease when the coverage on the child commences. at the same time, all riders attached on the life of the mother will terminate automatically. a new certificate of insurance for INSPIRE flexi2 will be issued with the child's name as the life insured.

my comments:

prudential was the first to launch a pre- and post-natal protection plan, prufirst gift in june 2010.

similarly, axa life's mum's advantage/mum's advantage plus offers pre- and post-natal protection coverage for expectant mothers and their yet-to-be-born babies.

who can apply?

this plan is open to expectant mothers who are in their 18th to 32th week of pregnancy.

Thursday, October 20, 2011

millionaires in singapore to grow from 183,000 to 408,000 by 2016

according to credit suisse's latest global wealth report, the number of millionaires in singapore will swell from the current 183,000 to more than double to 408,000 by the year 2016, after subtracting debt.

and most of this increase has been attributed to savings rate and asset price increases, and not by exchange rate movements.

singaporeans also hold the distinction of being the second richest in the asia pacific region, and the fifth richest in the world with an average wealth of US$285,000 which represent an increase of 32.1% from US$215,000 in january 2010, just less than 2 years ago.

my comments:

insurer seeks court order for victim's medical records

taiping insurance (singapore) applied to the high court on monday for access to the late mr pitchai rajendran's medical records as it seeks to investigate the victim's death from an industrial accident.

this is after taiping insurance (singapore) has been ordered to pay more than $110,000 in compensation to the victim's family.

mr rajendran, a ship maintenance worker was in a gondola that fell to the ground while washing a ship with a high-pressure water jet and suffered fractured ribs, liver lacerations and an open wound on his thigh.

prior to mr ragendran's discharge from the nuh after treatment, he developed complications and died.

my comments:

taiping insurance's probe into mr rajendran's death is not something that's unusual and forms part and parcel of any insurer's due dilligence procedures before settling payouts.

and with reference to this, an insurance contract is perhaps unique based on the principles of insurabilty and uberrima fides (utmost good faith).

and without prejudice, insurers have every right not to admit and pay any claim if there is evidence of a breach of these principles.

and that's why i will always insist on the prospect/referral/client sitting with me to lay all their cards on the table (meaning, full disclosure) when completing the paperwork for any insurance application.

and full disclosure is fully non-negotiable even if it means (it has happended many times already) i have to walk away from the table and lose the business.

Wednesday, October 19, 2011

tokio marine life insurance - launch of enhanced tm legacy plus (lp)

tokio marine life insurance formally launched their enhanced tm legacy plus (lp) product on october 14, 2011.

today being the usual scheduled slot for my monthly life insurance training, i presented an update of mpv (minimum protection value) products to my company's advisors.

when i came to the point of touching on the enhanced tm legacy plus (lp) product, one advisor voiced a difference of opinion in terms of the use of the word, enhanced which was pointed out to me.

this advisor preferred the use of the word, revised, rather than enhanced.

my comments:

i do not know why there should be such 'a mini storm in a teacup' raised over the use of the word, enhanced or revised.

but this is where advisors may differ in their opinion. and that's why i always try to focus on the facts, rather than the latter.

but the fundamental truth is that whether it should be enhanced or should it be revised rest entirely on semantics and it will not make any iota of difference to the product that has just been launched.

and more importantly, the enhanced or revised tm legacy plus (lp) must be benchmarked against the competition and not be referenced agsinst it's predecessor, the older tm legacy plus (lp) which is still available until october 31, 2011.

in the final analysis, if protection and budget are key considerations, the enhanced or revised tm legacy plus (lp) stands heads and shoulders against the competition and that my dear reader, should be the basis of how it stacks up in the current mpv space.

ps: the previous week was a time of grief for me and my family and particularly for all of my in-laws.


i say this with sadness more than anything else that the advisors present at my training session this morning should have been more 'sensitive' after learning that i lost my brother-in-law to a heart attack just a few days ago.

Monday, October 17, 2011

it's always in the fine print!

from the free tabloid, today:

Contractual fine print unfair to consumers

Letter from Kee Puay Kiang
04:46 AM Oct 17, 2011

Recently, StarHub increased its cable television subscription rates for existing customers, including those under contract.

As a simple consumer, I expected the contract I had signed would be valid for the two-year period without any increase.

When I queried StarHub, it informed me that there was a clause in the contract to cover the increase without needing our consent.

Many do not read the fine print. In this case, the contract favours StarHub and is unfair to consumers. When we want to change or terminate plans, we must pay a penalty.

When companies decide to increase charges or change contractual terms, they have themselves "covered". We cannot even seek early termination without penalty.

The S$2 monthly increase seems nominal, but the business practice is unacceptable. Consumers should pay for such increases when their respective contracts have ended and we have a choice whether to renew the contract at the higher price.

my comments:

yes, it's always in the fine print or like they say, the devil is in the details. like mr kee puay kiang, i'm contracted to starhub for cable tv. and because i'm a hubber, i have also signed up for my home's broadband, land-line and 3 mobile accounts as well. what's more, i'm also contracted to singtel's mio tv for the sake of my love for the english premier league and specifically, manchester united football club.

and that's a grand monthly total of more than $400 of my hard earned monies going to the 2 telco companies with the bulk enriching starhub's coffers.

but i guess there is no escaping the fact that we will have to bear with the increase in rates unless we opt out (if we can).

in the same way, consumers here should be aware of the trend of our insurers pricing insurance products with premiums that are both reviewable and non-guaranteed, meaning the insurer has the sole discretion of reviewing and repricing the premiums payable at any point of time during the premium paying term of the policy.

therefore, unless we can live without the services of our telcos and should we self-insure, we can only hope that future price increase(s) are few and far, far away.

Friday, October 14, 2011

tougher rules to rein in moneylenders

the government has introduced more rules for licensed moneylenders which will come into effect from november 01, 2011.

some of these rules include:

1. moneylenders cannot place ads in newspapers
2. moneylenders have to subscribe to a telephone land line approved by
the registry of moneylenders and use it as the business contact
3. the manager of each moneylending outlet must be approved by the
4. they must display the registry's notes to borrowers when obtaining
loans from moneylenders - a checklist for borrowers reminding them
to ask for information such as interest rates and what will happen
if they cannot pay - in a prominent location in the office
5. they cannot collect any fees before the loan is granted
6. they cannot obtain a borrower's singpass, or other confidential
7. they cannot make upfront deduction of interest payments from full
loan amount
8. they have to seek the registry's approval before employing any staff
including debt collectors
9. they have to computerise their business operations and submit
electronic quarterly reports to the registry for audits

my comments:

the moneylending business has seen a mushrooming of licensed moneylenders numbering approximately 260 now from just slightly more than 100 in 2009.

with new rules in place, customers should be better 'protected' than before.

however, the interest rates moneylenders charged has not changed. for example, the maximum rate is 12% a year for secured loans of up to $3,000 and 18% for unsecured loans of up to $3,000 and these will apply for borrowers' whose annual income on the date the loan is granted is below $20,000.

borrowers who earn $20,000 or more a year who want to get either a secured or unsecured loan will have to work out the interest rate with the moneylender.

mr kuo how nam, president of credit counselling singapore said:

"there should be a cap. from the cases we have seen, some moneylenders are charging effective interest rates of between 180% and 300% per annum."

my comments:

there are good loans and there will always be bad loans.

if a person needs what i term as emergency cash, surely the worst one is to look up your very friendly loan shark.

then who to call?

your more than friendly life insurer.

the way to instant access to fast money is through the accumulated cash values of a participating policy where up to 90% (or more) of the current cash value can be encashed in the form of a policy loan.

dependent on the insurer and the loan amount, policy loans are always available on the spot and there are absolutely no questions that need to be answered on why the loan is needed.

the interest rate payable on policy loans differ amongst insurers and the lowest currently is 5.5% per annum* from ntuc-income and will be disbursed in the form of a cheque within an hour.

*subject to change at the sole discretion of the insurer

but one caveat on policy loan (even though the interest charged is so much lower) is that the interest is compounded over the unpaid period of the policy loan.

therefore, take the policy loan if u must but like all loans, the 'hole' gets bigger with time and never ever take any loan* unless the need is akin to something that is representative of a 'life or death' situation.

*with the exception of good loan/s.

but at the very least, u know u do not have to run around like a mad hound to lay your hands on almost instant fast cash.

Thursday, October 13, 2011


tokio marine life insurance - pre-launch of enhanced tm legacy plus (lp)

today, tokio marine life insurance held a pre-launch of her flapship product, the enhanced tm legacy plus (lp) for us, the fa channel at ntuc business centre. the official launch date for the enhanced tm legacy plus (lp) is october 14, 2011.

to recap, in terms of the whole life mpv (minimum protection value) products, there are currently only 5 providers namely:

a. aviva
b. axa life
c. manulife
d. ntuc-income and
e. tokio marine life insurance

there used to be another provider, uob life but the latter has been acquired by prudential assurance in february 2010 and their mpv product, uob maxi-secure is no longer available.

my comments:

how is mpv distinct from the conventional whole life products?

whole life mpv products offer a protection booster for a specified period which is usually till the life assured's 65th birthday. after this, the life assured is covered for the basic sum assured (plus bonuses) for the rest of his/her life until the maturity of the plan or earlier, if a claim has been admitted and paid.

what are the strengths of tm legacy plus (lp)?

1. tm legacy plus (lp) is the only mpv plan that provides the protection booster till the life assured's 70th birthday.

2. there are more choices in multiple premium terms of 5/10/15/20/25 years or up to ages 55, 60 or 65 years.

3. the tpd limit has been raised to $2.5 million (within tokio marine life insurance and not aggregated across other insurers) and is one of the highest in the industry.

4. the removal of the exclusion for congenital abnormalities which is specified as:

"any congenital or inherited disorder whic first manifested itself before the life assured's 7th birtdday."

most whole life products with 30 ci benefit would carry an exclusion for any congenital or inherited disorders till a specified age.

5. tokio marine life insurance's unmatched record of par funds, meaning the company has not cut bonuses since the company came into being in 1948.

Wednesday, October 12, 2011

tokio marine life insurance - pre-launch of enhanced tm legacy plus (lp)

tomorrow, tokio marine life insurance will be unveiling the enhanced tm legacy plus (lp).

what is tm legacy plus (lp)?

this is tokio marine's response to manulife's life protector plus, a pioneer of the whole life plan embedded with minimum protection value.

this was followed by uob life uob maxi secure (bought over by prudential in february 2010), tokio marine tm legacy plus (lp), manulife's ultimate protector/star protector, axa life healthpro living, ntuc-income vivocare and most recently, aviva mylifechoice.

tm legacy plus is the flagship par product in tokio marine life insurance's stable and with the enhancements, reinforces it's value-added proposition against her competitors.

what are the likely enhancements to the existing tm legacy plus (lp)?

i was invited to the focus group last month when the enhanced tm legacy plus (lp) was presented to us by the management of tokio marine life insurance.

my comments:

suffice to say, i'm pleased that almost all of the focus group's inputs were incorporated into the enhanced tm legacy plus (lp).

the following are some of my own inputs while being noted by the management of tokio marine life insurance, are left on the drawing board for the time being:

a. addition of systemic lupus erythematosus as one of the 30 critical illness
b. raise the current tpd limit to S3.75 million (not aggregated across other
c. extend the coverage of tpd to age 70 years and
c. incorporate an additional definition for tpd on not being able to perform
3 out of 6 adls.

but considering what is the underlying principle of tokio marine life insurance in terms of balancing the interests of policyowners, distributors and shareholders, i will still give my 2 thumbs up for the enhanced tm legacy plus (lp) which should gain wide acceptance with the fa channel, and more importantly, with the consumers as well.

Tuesday, October 11, 2011

MOH clarifies on medisave-linked insurance schemes

today, the ministry of health responded to the writers of 2 letters; hospitalisation insurance drains medisave (october 01, 2011) and lower premiums for medishield can help (october 04, 2011):

the first letter:

october 01, 2011
hospitalisation insurance drains medisave

MY HUSBAND and I believe in insurance protection, and our parents, who are in their 80s, are insured by MediShield and IncomeShield. But the premiums have wiped out their Medisave and they have to pay in cash.

For an 81-year-old Singaporean, the MediShield premium for a stay in a C class ward is S$1,087 per year, while for IncomeShield it is $2,354. Our parents cannot continue to afford such premiums.

We wrote to the Ministry of Health and were told to use our Medisave to pay for the premiums. But for insured persons aged 81 and above, the withdrawal limit for premiums is S$1,150 per person. So we will eventually have to pay S$3,450 in Medisave and S$3,612 in cash annually for our parents, apart from our own premiums and those of our three children.

The total annual premium from Medisave would be S$4,823 annually or S$402 monthly, not forgetting that premium rates increase with age for me and my spouse.

Even if I were to earn S$5,000 monthly, my monthly Medisave contribution would then all go to paying premiums for hospitalisation insurance. What would be left in my Medisave account to pay for deductibles and co-payments or my own medical needs down the road?

What if one's salary cannot keep up with the rate of premium increase? What about the elderly who are unable to tap Medisave accounts of younger family members to pay for insurance premiums?

The MOH told us that it will review such issues later, during the policy review period.But these are pressing matters for the elderly as well as the sandwiched generation and not just for my family. It will be a pity if the elderly cannot afford insurance premiums and their policies get terminated when they are most needed.

We hope MOH can look at ways to solve such problems. Some scheme should be put in place to assist these elderly.

ms kwok hui ying
from the free tabloid, today

and the second:

october 04, 2011
lower premiums for medishield can help

AS AN elderly person, I can empathise with Madam Kwok Hui Ying in her letter "Hospitalisation insurance drains Medisave" (Oct 1).

I cannot comprehend the need to keep paying premiums to MediShield when one already subscribes to an enhanced MediShield operated by a private insurer.

Even if the reason is to complement enhanced Medishield, one still has to contend with co-insurance and deductible payments.

Also, before signing up for an enhanced MediShield, the premium paid from Medisave to maintain MediShield alone can be very substantial when paid over, say, 20 years - and insurance coverage is needed the most as one ages.

When one still has to pay the enhanced MediShield premiums, one's Medisave account will be quickly depleted, risking the policy being terminated.

If MediShield is compulsory for whatever reason, then perhaps the insurance premium be reduced further so that one has enough Medisave funds to pay for enhanced MediShield at least until one's deathbed.

dave yap
from the free tabloid, today

and here's the response from the ministry of health:

MOH clarifies on Medisave-linked insurance schemes

Letter from Bey Mui Leng Director, Corporate Communications, Ministry of Health
04:46 AM Oct 12, 2011

Madam Kwok Hui Ying, in her letter "Hospitalisation insurance drains Medisave" (Oct 1), and Mr Dave Yap, in his letter "Lower premiums for MediShield can help" (Oct 4), asked about the cost and coverage of Medisave-linked insurance schemes.

We agree with them on the imperative to keep healthcare affordable and accessible to Singaporeans, especially the elderly.

Our healthcare financing framework is based on the combination of heavy subsidies in public hospitals, the 3Ms of Medisave, MediShield and Medifund, out-of-pocket payments and/or private insurance.

For most Singaporeans who opt for Class B2 and C wards in public hospitals, the built-in subsidies and use of the 3Ms often mean that they incur either very low or zero out-of-pocket payments.

This is not so if they choose other ward classes, unless they have private insurance plans that cover such hospitalisation episodes.

MediShield is a basic catastrophic illness insurance, with coverage pegged to Class B2/C bills. Premiums are actuarially determined and work on the principle of risk pooling - the more people in a certain group, the lower the premium for each individual.

The higher premium for the elderly is due primarily to two factors: Potentially higher claims (due to the complexity of their conditions) and a lower number of subscribers in this category.

Beyond basic MediShield, Singaporeans who want additional coverage, as in Mdm Kwok's case, can opt for private Integrated Shield or fully (not Medisave-linked) private insurance plans.

These cost more than MediShield because the claim limits are higher. Mdm Kwok's example of $2,354 per year in Incomeshield premiums is for an "as-charged" plan that is pegged at Class B1 rates.

Mr Yap asked why one should continue to pay for MediShield if one already has an enhanced MediShield plan with a private insurer, that is, an Integrated Shield plan. These plans are add-ons to the basic MediShield plan and are not designed to replace it.

The premium payable by the policyholder includes a basic MediShield component and a second component for the additional coverage under the enhanced plan. There is no double payment for MediShield.

Singaporeans should choose healthcare insurance that best fits their needs and budget. Integrated Shield plans offer higher coverage but come with a higher premium. Premiums for basic MediShield are more affordable.

We will work to ensure that the scheme remains sufficient to cover most Class B2/C bills. For elderly Singaporeans facing problems footing their medical bills, they can approach medical social workers at the hospitals to apply for Medifund Silver.

Recently, the Ministry of Health also rolled out initiatives to help middle- and low-income Singaporeans with their outpatient costs.

Our ministry is in touch with Mdm Kwok to further assist her with her query. We invite Mr Yap to contact us if he has any clarification regarding his premiums for his enhanced Shield plan.

my comments:

over the years, the basic medishield scheme has been enhanced and repriced since it's launch on july 01, 1990.

currently, there are 2 more in the works, coverage of congenital abnormalies and extension of the term of coverage beyond age 85 years.

consumers will have to be more realistic in terms of the pricing of the premiums with regard to the plan and the coverage.

and it can be a chicken and egg thingy because on the one hand, consumers are looking for enhanced benefits and coverage and on the other hand, do not expect to pay for it.

that's why there are clearly 2 choices since mid-2005 when the first integrated shield plan was launched by aviva with radical benefits that come 'as-charged'. since then, all shield providers namely aia, aviva, great eastern life, ntuc-income and prudential has similar integrated shield plans with 'as-charged' benefits.

one clear advantage of the integrated shield plans is the availability of riders to cover 100% of deductible and 100% of co-insurance (except ntuc-income's assist rider with a co-payment of co-insurance).

if instead, u opt for the basic medishield plan, what this means is there is no first-dollar reimbursement arrangement, meaning the life insured has to incur co-payment of the bill.

secondly, the basic medishield plan, as explained by ms bey mui leng of the moh, is designed with coverage pegged to government restructured hospitals' class B2/C bills and because of the built-in subsidies and use of the 3M (Medisave, MediShield and Medifund), translates to incurring very low or even zero out-of-pocket payments.

but because there is no lifetime coverage for the basic medishield scheme, there will always be life assureds who will drop out of the plan and subsequently, will have no recourse to be covered by any of the integrated shield plans because the last entry age is restricted to age 75 years.

therefore, the choice of either the basic medishield scheme or an integrated shield plan should be more clear if your focus is on covering longevity risk. after all, life expectancy is constantly inching higher since the 70s and today, many individuals can expect to live to their 90s and beyond.

Monday, October 10, 2011

government pledges better life for all

in his message on the occasion of the opening of the 12th parliament, our new president, dr tony tan keng yam spoke on the government's program for the coming 5 years, promising of 'a better life for all'.

one of the issues he touched on was on the new political environment and one important platform for engagement being the new media.

on this, dr tony tan said;

"on the internet, truth is not easily distinguished from misinformation. anonymity is often abused. harsh intemperate voices often drown out moderate, considered views. other countries struggle with this problem too. we must find ways to use the new media constructively, to connect with the digital generation and sustain fruitful conversations on issues concerning us all."

my comments:

if we relate what dr tony tan has highlighted with regard to the new media and specifically to insurance, i'm deeply troubled that many consumers choose to rely on what is out there in cyberspace.

and i'm doubly concerned when the information or misinformation is continuously and repeatedly propagated not by financial advisers but laypersons who by themselves, may not even be 'in-the-know'.

i'm not too sure why there should be reliance on the new media for insurance when there is absolutely no accountability whatsoever by persons spewing the (mis)information hiding under the cloak of anonymity through pseudonyms.

i know this to be a fact because of my experience with people i sit with seeking advice in my 14 years in the financial industry.

that's why my hope is for consumers to engage a financial adviser who is not only knowledgeable but competent as well to shift the wheat from the chaff. and surely, engaging the right financial adviser will also ensure there is accountability to u at any point of time in the future. and although not guaranteed, this is where the financial adviser's track record should count in terms of his/her longevity in the industry.

and one way of educating consumers (on insurance) and achieving my aim to reach a vast audience is through my blog entries with absolutely nothing to pay for, except the investment of your time.

Saturday, October 8, 2011

temporary marriage?

something radical and shocking hit me when i watched the national tv channel through the news bulletin at 9.30 pm which featured a couple who were just married.

so what's shocking?

this couple made news because the marriage is based on the latest proposed ordinance by the government of mexico which permitted a 2 years' temporary marriage.

instead of the customary vows exchanged between the newly-wed man and wife, the union is not the traditional 'till death do us part', but a temporal one.

mexico has perhaps one of the highest rate of divorces in the world where up to 50% of marriages end in divorce.

my comments:

as a christian, i believe that marriage is an institution ordained by Almighty God and therefore, what He has joined together, let no man put asunder.

and if u are looking for a temporary union, yes, it is also available here in our red dot nation.

but sorry, it is not what u are thinking.

i'm talking about an insurance contract which is also temporal in nature.

yes, i'm referring to term insurance which may be suitable for u because there are many different terms of coverage available, whether a yearly renewable term (a union of one year) or a 5 year renewable one and so on and so forth.

in other words, u can hold on to your insurance contract (or partner) for as short or as long as u like. but should u wish to be together for the long term or even for life, there are other contracts available, even for whole of life, or till death do u part.

in other words, u can have your cake and eat it.

Thursday, October 6, 2011

steve jobs

today is just another day, isn't it?

no, if we consider the world has learnt of the passing of steve jobs*, a tech visionary, whiz-kid extraordinaire, innovater, creative genius, co-founder, chairman and former ceo of apple, inc. steve lost a long battle with a rare form of pancreatic cancer and died on october 05, 2011 at the ripe young age of 56 years.

there will be many, many millions who will mourne and miss him. and of the many, many tributes pouring in, bill gates said of steve:

""For those of us lucky enough to get to work with him, it's been an insanely great honor,"

*if u claim to have never heard of steve jobs, u must either be in deep hibernation over many decades or living in a planet outside the solar system.

my comments:

perhaps this is one of steve jobs's most quotable quotes when he spoke at stanford university in 2005:

"no one wants to die. even people who want to go to heaven don't want to die to get there. and yet death is the destination we all share. no one has ever escaped it. and that is as it should be, because Death is very likely the single best invention in life."

we certainly need no reminder that death is inevitable and one day, when the curtains come down, will we be ready for that eventuality? and that's why i am privileged to accept the mission to meet the challenge of converting skeptics to financial planning and especially wealth protection planning.

and to steve jobs (february 24, 1955 - october 05, 2011), a titan who revolutionized the computer and cellular industries and built the world's largest company by market cap, i take my hat off to u also.

and we'll miss u.

Wednesday, October 5, 2011

ifast financial - an important announcement

although this blog entry is not related to insurance, i'm disseminating this important announcement from ifast financial:

Dear Valued Partners

It has come to our attention that a website is making reference to iFAST by using the URL, This fraudulent website has also made use of our corporate name, logo and information without our authorisation.

iFAST Financial Pte Ltd is in no way related to this website.

The website,, appears to attract users to provide their account username and password and claims to offer stock trading facilities and membership services.

iFAST is a holder of the Capital Markets Services Licence and Financial Adviser's Licence by the Monetary Authority of Singapore (MAS) and is a CPFIS-registered Investment Administrator (IA). Our websites, and, will lead users to the appropriate secure pages with SSL certificates.

If you or your clients have keyed in their username and/or password via this fraudulent website, please advise them to change to a new password immediately.

Our Hong Kong entity is working closely with the relevant authorities who are investigating this matter.

Do not hesitate to contact your iFAST Account Manager or our client service team at 6557 2000 should you require any clarification.

Best Regards,
iFAST Account Management team
iFAST Financial Pte Ltd

my comments:

with this alert, investors using the ifast platform should not fall prey to disclosing their particulars to the fradulent website.


Tuesday, October 4, 2011

dbs cuts rates for $ deposits

as expected, in the current extreme low interest rate environment, dbs has announced it would cut interest rates for sing dollar deposit accounts with effect from october 14, 2011.

dbs, asia's safest bank, and south east asia's largest lender, has cut the interest rate for the first S$10,000 deposited in its "DBS Autosave (Personal)" account to 0.05 percent from 0.10 percent previously.

mr song seng wun, an economist at cimb research said:

"Increasing risk aversion have led people to keep money in the bank rather than putting it to work, like investing in stock markets or buying properties,"

and on the flip side, banks have been more careful of who to lend to which may see lending activity easing off as well.

my comments:

with the current market turmoil, there is perhaps very few other almost risk free alternatives to leaving monies in the financial institutions which offers a lower but guaranteed returns, augmented by the deposit insurance scheme*.

*In the event a Deposit Insurance Scheme member bank or finance company fails, all of your eligible accounts with that member are aggregated and insured up to S$50,000. Trust and client accounts held by non-bank depositors are insured up to $50,000 per account.

one other alternative worth consideration is endowment products provided by our insurance companies. but of course, do not just sign off any endowment product recommended by your financial adviser.

is there any endowment product worthy of mention?

on this, there is one significant benchmark which i apply when advising my clients to put their monies into any endowment product which is the guaranteed cash value on maturity must exceed the total premiums that has been paid over the term of the policy.

for example, if the total premiums paid = $1, then the guaranteed cash value on maturity must be >$1 and the higher the margin, the better the guaranteed returns from the policy. the bonus (literally) are both the reversionary bonuses that has been declared and the terminal bonus added to the policy on maturity.

if this benchmark is not met, then the endowment product in question will not be in my radar screen.

with inflation expected to be higher than normal, running at a current clip of more than 5%*, therefore, putting all your monies into savings and fixed deposits will net a real negative return in terms of your purchasing power in goods and services. but in chasing yields, do be reminded of the inherent risks of any potential return offered which is usually not guaranteed.

*The inflation rate in Singapore was last reported at 5.7 percent in August of 2011. From 1962 until 2010, the average inflation rate in Singapore was 2.73 percent reaching an historical high of 34.00 percent in March of 1974 and a record low of -3.10 percent in September of 1976.

after all, it is your hard earned monies and u deserve to be rewarded for putting your capital to work.

Monday, October 3, 2011

study: 8 in 10 here take too much salt

according to the health promotion board, far too many singaporeans are taking too much salt in their diet.

how many?

approximately 8 in 10 singaporeans consumed salt which far exceed the daily recommended consumption of 5 grams a day.

the latest salt intake study found that the average person consumes 8.3 grams of salt daily or more than 60% above the recommended level.

if this is true, most of us will fall into the group consuming far too much salt which is detrimental to our health and well being.

hpb's ceo, mr ang hak seng said:

"salt is a double-edged sword when not handled with care. while a little salt may enhance the flavour of food, over-consumption can raise blood pressure, which in turn is a significant risk factor for cardiovascular diseases."

the study compiled data from 800 participants aged between 18 and 79 years old and was done by collecting urine samples from the participants over a 24-hour period.

those in the age group from 30 to 49 years old consumed the most salt, averaging about 9 grams daily.

in general, men were found to consume about 9.6 grams a day while women consumed about 7.1 grams daily.

my comments:

why is the latest findings on salt consumption of concern?

firstly, approximately 1 in 5 singaporeans aged 18 to 69 has hypertension which can cause stroke, heart attack and kidney failure. and about 1 in 3 deaths in singapore is caused by heart disease and stroke.

and secondly, most singaporeans eat out 60% of the time where there is little control over the consumption of not only salt, but sugar and oil (including trans fat*) as well.

*from wikipedia:

Trans fat is the common name for unsaturated fat with trans-isomer (E-isomer) fatty acid(s). Because the term refers to the configuration of a double carbon-carbon bond, trans fats are sometimes monounsaturated or polyunsaturated, but never saturated.

Trans fats are not essential fatty acids. The consumption of trans fats increases the risk of coronary heart disease by raising levels of "bad" LDL cholesterol and lowering levels of "good" HDL cholesterol. Health authorities worldwide recommend that consumption of trans fat be reduced to trace amounts.

with the findings of the study on salt consumption, chalk this up as an additional risk to our general state of health and last but not least, our insurability in terms of taking up insurance.

is the ethical advisor still alive?

last week, i met up with a couple who wanted my advice for a large term policy of sum assured $1 million for the husband who is the sole breadwinner.

the wife also wanted advice on her current basic medishield plan.

my comments:

everything was fine till the point when i inquired as to their health status. they claimed they were healthy but when i probed further, both husband and wife started to reveal some medical conditions which happened a long time ago.

i reminded them of the principle of utmost good faith or uberrima fides and this is prominently displayed in every insurance application form which says:

"warning: pursuant to section 25 (5) of the insurance act (cap.142), you are to disclose in this application form fully and faithfully all facts which you know or ought to know, otherwise the insurance effected may be void."

they emphasised that their medical history is history, period and disagreed with me that no disclosure is necessary since it was so long ago.

but i did not waiver in my stand and i believe that from this point in time, our meeting did not proceed smoothly after this.

and after parting, my gut feel told me i will not get the business and true enough, i got a sms today telling me they will not pursue their business with me.

well, despite this, i will still not compromise on my part in any potential business (even the big ones) by closing two eyes or even one eye and not doing things right the first time and every time.

but i can share here that it is proving to be damn challenging to be an ethical advisor and swim against the tide. and as to the question on whether the ethical advisor is still alive, the answer is a resounding yes, but this person will definitely be an endangered species.