aviva: launch of my protector - level plus

today, we received an email notification from aviva on the change in their quotation software.

the upgraded software incorporates the launch of my protector - level plus from december 01, 2011 which is a repriced version of the current my protector - level term plan which has been withdrawn to make way for the new my protector - level plus term plan.

what is my protector - level plus?

this is a regular premium non-participating level term plan and offers protection against death and terminal illness.

aviva my protector - level plus plan is available for policy term of:

a. 5 years that is embedded with guaranteed renewable option or
b. 10 years to age 82 or up to age 99 next birthday, whichever is lower.

and the plan comes with a guaranteed issuance option for the following life stage events without evidence of health and they are:

a. any change of marital changes of the life assured, such as the life assured marries or divorces
b. the life assured becomes a parent or adopt a child
c. the life assured graduates from tertiary education.

then, the life assured can exercise this option to increase the sum assured of the basic policy if the basic policy has been fully underwritten and accept as standard terms without any sub-standard premium loadings, exclusions or counter-offers.

The Life Assured can exercise this Guaranteed Issuance Option:

a. up to maximum 2 times per life time.
b. before the Policy Anniversary when the Life Assured attains age 50 at next birthday.
c. if there are no previous admitted claims or currently applied for a claim on this Policy within the Policy term.
d. with the consent of the Policyholder if the Life Assured is not the Policyholder of this basic Policy.

The premiums are level and guaranteed throughout the policy term. Six currency options are available: SGD, USD, GBP, EUR, AUD and HKD.

my comments:

with longer life expectancy, many of our insurers have taken this factor into the repricing of term products and the latest to do so is aviva. this year, we have seen insurers like tokio marine life insurance (jan 2011), axa life (mar 2011)and aia (nov 2011) repricing their term rates.

with aviva my protector - level plus joing the band wagon, consumers are the real winners in terms of having to pay much, much lower premiums for plain vanilla term protection especially for life insureds up to the age bracket of 30 years.

this is important because our population remains grossly under-insured to the tune of more than $330,000 based on the latest aia survey some months ago and with term rates heading south, the bar on affordability has been lowered significantly.

for example, aviva my protector level plus pricing for the basic plan for a non-smoker male and non-smoker female, age 30 with a sum assured of $1,000,000 and term of 5 years is just $360.00 and $230.00 respectively which does not even equate to $1 per day. One caveat here because aviva has set a minimum entry level in the form of a minimum annual premium of $351.70 but other terms and conditions apply as well.
but pricing wise, younger insureds will have plenty to cheer because i believe term rates will continue to head south.

if u are the lengendary singaporean consumer already famous (with apologies to ms michelle chong) for sniffing out bargains, it will be worth your time to check out the repriced term products currently available from aia, aviva, axa life and tokio marine life insurance.

testing

cosmetic chemical may cause cancer

this must surely come as bad news to those who use cosmetics and or sunblock, especially if on a regular basis.

if the risk of contracting cancer, which remains singapore's numero uno cause of death, is of a high probability like 1 in 4 will die from cancer, scientists from nanyang technological university (ntu) have found a possible link between a popular ingredient, identified as zinc oxide and cancer.

the popular ingredient, zinc oxide used in sunblock and cosmetics, in its nano* form could be harmful as the particles are so tiny, they could be absorbed easily into skin cells.

*a nanometre is one-millionth of a millimetre.

because the tumour-suppressing protein, called P53 may not be present in some people, or do not produce enough of it in their cells due to hereditary reasons, these people could be susceptible to cancer.

the ntu researchers, led by assistant professors joachim loo and ng kee woei and nus's assistant professor david leong, found that when they combined 10 micrograms per ml of zinc oxide nano particles with human cells, the cells were damaged.

my comments:

the scientists involved in the study says there is no cause for alarm yet and the study is in its prelim stage but little is known about the use of nanomaterials in consumer products and their possible ill-effects.

because cancer is aleady singapore's number 1 killer, most people would probably know these statistics taken from the singapore cancer society:

1 in 4 Singaporeans dies of cancer

12 people die from cancer every day

28 people are diagnosed with cancer every day**

**49,412 incident cancers diagnosed among the resident population during 2005-2009. Singapore Cancer Registry, Interim Report.

due to the fact that the older generation ci plans (first product launched in 1987), and the availability of state-of-the-art diagnostic tools, coupled with consumers' health consciousness, our insurers have recognised the limitations of the former and since 2006, we have seen many new generation ci products that cover early and intermediate stage critical illnesses, including carcinom-in-situ of specified organs and some of these products also allow for multiple ci claims.

what all this means is the diversity of choices available on the coverage of critical illnesses which is no longer limited to the traditional older generation ci plans.

but of course, like what confucius has said, "the essence of learning is application" meaning now that u know, what are u going to do about it?

testing

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uberrima fides

today, in my lighter moments, i was browsing the life insurance association of singapore website (http://www.lia.org.sg) and the following quiz on life insurance caught my eye:

question:

What can happen if a customer does not tell the life insurance company all about his health/medical history and current status?

True or False: The customer is not penalised.

as a financial professional, i clicked 'false'.

what is the correct answer?

my comments:

False is correct! The insurance company has the legal right to decline the claim and regard the policy as if it has never existed

but to my surprise, there were 22 who clicked true, out of a total of 141 who responded to the quiz, myself included.

this represents 16% of consumers who are rather 'clueless' on insurance where contracts are based on the principle of uberrima fides (utmost good faith) and insurability.

and this is why i have to turn down business, (and believe me, some of these can reward me with a good five figure commission) when the person/s in front of me is in disagreement on full disclosure of material information.

because i can't imagine a worst possible scenerio to start-off with any potential client (without full disclosure) and when the crunch comes, what matters the most to the client is having the peace of mind knowing they have a contract that is fully binding with the insurer.

can eating too much make your stomach burst?

i came across an article with the question, can eating too much make your stomach burst?

this is an interesting question because the holiday season is just around the corner and school's already out for most of our youngsters and for them, it's a very long stretch of holidays till the start of the new year.

with shopping and dining being the most favourite of activities here in our tiny red dot nation, i thought this article may be of interest to everyone.

and do u wish to hazard a guess as to the answer to the question?

the aweful truth and answer is yes, u can rupture your stomach if u eat too much.

on this, i believe u must have heard someone saying or even yourself say, "i ate so much, i feel my stomach is about to burst."

my comments:

amongst those with higher risk are anorexics and bulimics. in rare cases, the person can eat so much during a binge that the stomach bursts and or the esophagus tears and if this happnes, can be life threatening.

ditto for individuals with prader-willi syndrome, which is a congenital disease characterised by a kind of disorderly eating and an intense craving for food where there have been reported cases of spontaneous stomach rupture.

there have also been well documented cases of people who literally ate themselves to death, although these are extremely rare.

the stomach can actually hold approximately one or one and a half liters and pathologists' reports seem to suggest the stomach is able to do ok to handling up to about three liters but most cases of rupture seem to occur when a person has attempted to stuff their stomach with about five liters of food or fluid.

and thank God, the body's natural response to over-eating is to vommit or throw-up. but in some people, their bodies' reflexes have been ignored or abused for so long that they no longer vomit at the appropriate time.

when this happens, the increasing volume of stuff in the gut extends pressure on the stomach's walls causing the tissue to weaken and tear which in turn sends the contents of the stomach into the body resulting in infection and pain. at this point, the person needs surgical intervention to repair the stomach and save that person's life.

on over-eating, our former pm and mm, mr lee kuan yew dishes out pretty good advice because he eats only up to being 80% full which will never put him in a position of overstuffing himself.

so during this holiday season which will probably stretch to the lunar new year holidays next year, just another reminder that life is ever so fragile and death may occur from over-eating.

therefore, before your next 'buffet' or foodie adventure, now is as good a time as any to review your wealth protection portfolio because nobody knows what tomorrow may bring,

chip-maker AMD lays off more than 50 s'pore staff

it was reported in the straits times today that a chip-making giant, AMD retrenched more than 50 of their staff. what is worst is that this is likely to be the first of two rounds of retrenchments.

a technician identified as ravi was one of the employees retrenched and he said:

"it was a very sudden thing, we always thought it would happen to other people and our jobs were safe, but now it's happened to us."

AMD said the retrenchments were part of a global restructuring plan and the exercise aimed at strengthening its competitiveness, and emphasised that singapore remained a vital part of its operations.

my comments:

i can certainly emphatise with mr ravi and those who received their pink slips from AMD yesterday. like what mr ravi opined that he thought his job was safe and it will only happen to others. but in real life, is any job really, really safe?

i remember during my time as a salaried employee, there was always the fear of being retrenched when times were bad.

from that time and fast forward to 14 or more years later, i have never looked back when i decided to leave my full time employment with an american mnc.

and my advice to those who fear being laid out in times of economic uncertainty, perhaps u may wish to consider a career as a financial advisor just like me. although there is no guarantee of success, one of the trade-offs is that there is no one to 'boss' u around especially if u are constantly being 'micro-managed' by your superiors. further more, in terms of being your own boss, u hold the keys to your own pay cheque and the icing on your cake is, there is no mandatory retirement age, although there is a law (kicking in from next year) for employers to re-employ older workers.

testing

manulife's ads on highest par fund returns

over the last few months, i'm sure u cannot have failed to notice manulife's signature green ads spread over our tiny red dot nation, whether plastered on taxis, the media, mrt stations, etc. (an aside, green is probably my fav colour and for every other investor i know as the global stock markets have been tanking due to a confluence of factors, all drenched in a sea of red).

i would like to add my congratulations to the management and staff of manulife for the achievement of celebrating the highest participating fund returns in singapore for the last 5 years from 2006 - 2010 which is based on rolling 3-year, 4-year and 5-year average investment returns on their participating fund.

because of the fact that the insurance act specifies that insurers have to distribute at least 90% of surpluses to participating policyowners, achieving higher (and consistent) participating fund returns is usually positive for the latter in the form of the distribution of bonuses.

my comments:

besides manulife, i would like to acknowledge ntuc-income for having distributed 98% of surpluses to her participating policyowners. what's more, ntuc-income's head honcho, mr tan suee chieh, has also declared 2 additional bonuses, one being the 5 yearly bonus and a cash bonus for participating policies kept in-force for at least 10 years or longer in the year 2010 which was co-incidentally, the 40th anniversary of ntuc-income.

but i will have been seen to have dishonoured this insurer if i do not give them due praise and recognition because i take my hat-off to tokio marine life insurance singapore, the one and only insurer for still maintaining the record of never cutting bonuses since the company's existence in 1948. this is indeed a rather rare distinction and my hope is tokio marine life insurance singapore will continue to deliver all non-guaranteed bonuses long into the future.

changes to the cpf act/wica

besides the special needs savings scheme, there are other changes to the cpf act which was passed by parliament today and they are:

1. allowing voluntary contributions by other parties

previously, cpf members could contribute to their own account or those of
family members. employers could also contribute to the accounts of
employees.
now, voluntary contributions to a member's account can by made by any
person, company or association.

2. allowing reversals of some inter-account transers

funds can be transferred between an individual's cpf accounts: for instance,
from the ordinary account to the special account, to benefit from the higher
interest rates.
before, such transfers could not be reversed. now, they can be reversed
under special circumstances. for instance, a cpf member who suffers
unforseen financial hardship after the transfer may need the transferred
savings to service his housing instalments.

3. portability of HPS (home protection scheme)

the hps is a mortgage insurance scheme which pays off the outstanding
housing loan if the cpf member is incapacitated or dies.

unlike private schemes, it is tied to a specific property. if a member
sells the property and buys a new one, they will need new hps cover.
but a member must be in good health to be eligible for hps. this
disadvantages members who may not be in good health when buying a new
property. the amendment allows the cpf board to waive the requirement of
good health for members who were insured under hps for their previous
property.

besides the changes to the cpf act, there were also significant changes to the wica (work injury compensation act):

1)higher minimum and maximum limits of compensation

from june 01 next year, employers are liable for a minimum of $57,000
($47,000)and a maximum of $170,000 ($140,000) in the event of a work-
place death under wica. if a worker suffers total permanent incapacity,
the range is between $73,000 and $218,000 ($60,000 to $180,000).*

*this excludes the additional 25% compensation that is paid to workers
with total permanent incapacity to offset the cost of care for the
injured worker. figures in brackets refer to the old limits.

2)Disallowing compensation for work-related fights

The rationale for the amendment is that while work disputes may arise from time to time, employees should not resort to fights to resolve them, and employers should not have to bear the cost of injury.

As such, employers will generally not be liable under WICA to compensate workers who are injured in work-related fights, except in certain scenarios such as when the worker was a victim and did not participate in the fight, or when he was injured while exercising private defence, or instructed to break up the fight, safeguard life/property or maintain law and order.


3) Expanding scope of compensable diseases

Currently, diseases are compensable only when they are listed in the Second Schedule, for example noise-induced deafness, or as a result of a specific accident at work. With the change, diseases contracted due to work-related exposure to chemical or biological agents will be compensable. The Second Schedule will also be refined to include a new occupational disease (exposure to excessive heat), remove SARS and Avian Influenza and broaden scope of some of the existing occupational diseases.

4) Disallowing work-related exclusion clauses

Work-related exclusion clauses, except pertaining to asbestos, will be prohibited for the purpose of WIC insurance. With these changes, insurers will be liable to make payment of the compensation even if work-related exclusions exist in the policy. Insurers will continue to be able to seek contractual recovery from the employer if such recovery is allowed in the insurance policy.

5) Clarifying the liability of employer’s insurer to pay when there are multiple insurance policies

Certain industries have the practice of having multiple parties provide insurance coverage for workers. When there is an accident, the various insurers may dispute liability and compensation to the injured worker is unduly delayed. With the change, where there are multiple work injury compensation insurance policies, the employer’s insurance policy will first be used to satisfy a claim. MOM will allow third parties to pay compensation as long as they convey in writing to MOM their intent to pay compensation on behalf of the employer’s insurer, before the notice of assessment is issued.

6) Clarifying the timeframe for filing a claim if one wishes to claim under WICA after having filed a common law claim earlier

Injured employees have up to one year from the date of the accident to decide whether they wish to file a claim under WICA. Claimants who filed a common law claim but subsequently wish to file a claim under WICA have to do so within one year of accident. If the claim was made after this one year timeframe, it will not be admitted under WICA.

my comments:

it is indeed timely to effect changes to the cpf act and wica.

i can understand the rationale for allowing voluntary contributions to be open to any person, company or association and without the previous restrictions in place, it is as good as getting one's godpa/godma/goduncle/godauntie and other kind souls to 'beef up' a cpf member's account.

on transfer of funds, i have always advised against transferring funds from cpf-oa to cpf-sa because of the fact that it is irreversible and because cpf-sa funds are more illiquid than funds in the cpf-oa. but with the change, i will now look at such transfers differently with one caveat because the new formula for computing the cpf interest rates will kick in on january 01, 2013 (if there is no further deferment of the new formula since january 01, 2008).

the change in portability for the home protection scheme is a good move but my feedback to the cpf board is to add another layer of protection for the enhanced hps in the form of a waiver of premium for critical illness. this is really important when a cpf member is hit with a critical illness and the future payment of premiums becomes challenging and unaffordable.

and last but not least, thumbs up also for the changes to the wica (since 2008), taking into account for both inflation and rising healthcare costs to reflect higher minimum and maximum limits of compensation.

even with the improved wica, employers should also consider looking at providing a more comprehensive h&s coverage because the medical expenses are capped at up to $30,000 (from $25,000) or 1 year from date of accident, whichever is reached first.

just my 2 cents' worth to the latest changes to cpf act/wica.

more cpf protection for children with special needs

one of the changes to the cpf act was passed by parliament today, through a new special needs savings scheme (SNSS).

through the SNSS, parents can arrange to have their cpf savings disbursed in monthly payouts to their disabled offspring/s after their deaths.

prior to this scheme, the savings of a cpf member who dies are distributed to his/her nominees as one lump sum.

parents can decide the quantum of the monthly payouts but this has to be at least $250. however, if their cpf savings at death are insufficient to provide the payout for 12 months, the entire balance will be paid in a lump sum.

who is eligible?

open to parents of disabled children who are attending or have attended a special education school, or who need help in at least one activity of daily living, such as getting dressed, eating or moving around.

the SNSS will be implemented early next year.


my comments:

the new SNSS will be a boon for all parents because there is no minimum amount and comes with no adminstrative charge. besides, setting up a trust for their children with the special needs trust company will require a minimum of $5,000 in cash.

but as ms denise phua has opined in parliament, the SNSS is too restrictive and needs to be expanded as many special needs children do not attend special education schools. there are also others who require help with money management and long-term planning.

besides the SNSS, parents may need to review whether this will be sufficient to meets the needs of their child/ren and should consider other supplementary options in which a competent financial advisor should be able to assist.

generali international

today is our scheduled monthly compulsory meeting for all of promiseland independent's financial advisors which is usually held at the function room of kampong glam community centre which is centrally located near our office at keypoint.

our managing director, mr david choo announced that we have recently signed a contract with one of the latest insurers in town, generali international limited singapore branch.

my comments:

we are proud to have generali international being added to our stable and we now have a grand total of 12 life and composite insurers offering an awesome arsenal of solutions to our clientele and they are (in alphabetical order):

1. aia
2. axa life
3. aviva
4. friends provident international
5. generali international
6. hsbc insurance
7. manulife financial
8. ntuc-income
9. royal skandia life assurance
10. tokio marine life insurance
11. transamerica life
12. zurich international life

there are a total of 16 life and composite insurers who are members of the life insurance association of singapore (http://www.lia.org.sg).

the missing insurers in our stable are:

1. great eastern life assurance
2. overseas assurance corporation
3. prudential assurance
4. swiss life

for the information of my readers, we used to have contracts with great eastern life assurance, overseas assurance corporation and prudential assurance and a referral agreement with swiss life.

testing

money no enough? (2)

in my last blog entry a couple of days ago, i expounded on the chief reason (after speaking to many tied agents and advisors) being money no enough as to why consumers in our tiny red dot nation are generally under-insured.

and lo and behold, in today's edition of the straits times, there is a special report focusing on those that are really living from hand-to-mouth in our society titled, "running on empty".

the 74 page report by the Lien Centre for Social Innovation at the Singapore Management University acknowledges that basic social needs such as food, clothing and shelter are met through direct government action and non-governmental social service organisations but there will always be unmet needs of which i count being insured to be one of these needs.

my comments:

the straits times report mentioned mr ang seng hwee, 65 and his wife, madam lee siew moi, 53 who lived on $297 in cpf payouts every month, for 5 months. in september, the local community development council approved mr ang's appeal by granting him $200 a month for 3 months together with $80 vouchers for power and water bills.

another individual, mrs tan, 59, is a preschool teacher assistant and her 60 year old husband are finding it hard to support her sister, 77 and his mother, 91. her sister, who is single, suffers from diabetes, hypertension, osteoarthritis and schizophrenia.
the tans have a combined monthly income of about $2,300 and about $800 goes towards supporting their 2 relatives. they have 2 children in their 20s, who have just started working and mrs tan said:

"it will be unfair to ask them to support their aunt and grandmother as well as us."

another couple, madam gan hee, a 57 year old housewife and her retired construction worker husband, mr tan ah choi, 75, lives in a 4-room jalan bahagia flat which they shared with their 3 grown up children, a son-in-law and granddaughter, as well as madam gan's unmarried younger sister, gan ten, 50 who is jobless and gets her meals from a free-food distribution centre run by the charity, willing hearts. and to save electricity, they switched off their fan.
they say money is tight but they cannot downgrade (to a smaller flat) as their 2 older children, both in low-paying contract jobs, cannot afford their own flats. their youngest son is a student at the institute of technical education.

why have i singled out these families?

to be honest, i have highlighted the plight of these families and they represent living examples of people who need insurance but to them, money no enough.

but for the many individuals and families where i have met (and for the other tied agents and advisors as well), and cited money no enough to take up insurance, is simply too hard to swallow, going against the backdrop of the marginalised numbers in our society.

25% of americans expect to wait until age 80 to retire

according to Wells Fargo's latest retirement survey that polled 1,500 middle-class Americans drew what i term as shocking revelations.

some of the findings from the survey found that:

a. on average, americans have only saved a mere 7% of retirement nest egg they were
hoping to build
b. respondents whose age ranges from 20 to 80 had median savings of only $25,000 when
their median retirement savings goal was $350,000
c. 30 % of people in their 60a have saved less than $25,000 for retirement
d. three fourths of middle class americans expect to work throughout retirement

joe ready, director of wells fargo institutional retirement and trust said:

"The fact that the vast majority of middle-class Americans expect to work well past the traditional retirement age has significant societal and economic implications. Will people be physically and mentally able to work later in life? What will it mean for young people entering the workforce? And, how does our system of retirement savings need to be reformed to help reduce the savings gap?"

my comments:

with the american unemployment rate staying at 1% below double digits, stock market swings and volatility and plunging home prices has clearly taken a toll on many americans' savings. and changes in pension plans and proposed cuts to social security and medicare benefits has also served to blunt optimism on retirement.

what mr joe ready said regarding older people being physically and mentally able to work in their golden years injects a sense of reality for americans planning to work past their retirement age till age 80.

i hope the findings of this survey will serve as a grim reminder to everyone here in our tiny red dot nation that nobody owes us a living and retirement planning is more imperative than ever before given that most of us will have many more golden years in our hands due to longer life expectancy which is definitely not static but is constantly inching upwards.

money no enough?

in the common singaporean identity and aspiration to acquire the 5Cs (or more), namely condo, car, cash, credit cards and country club membership (in random order), i've noticed there is an unchanging statistic in all the years that i've been in the financial industry and it is the fact that by and large, our population remains grossly under-insured.

despite boasting of many accolades being bestowed upon our tiny red dot nation and people, i've always been intrigued as to why a human being's life is not similarly valued in dollar terms, with regard to insuring ourselves.

take for example the latest statistic from the lia (http://www.lia.org.sg/node/2923) where we see the total claims of $3.69 billion being paid out up to the latest quarter till sep 30, 2011. of these, only a mere $342 million or 7.3% were paid for death, disability and critical illness claims. in other words, the majority of claims or $3.34 billion were paid for policies that matured.

my comments:

from speaking to many other advisors and tied agents, what i've unearthed is that there have been many reasons given by consumers for not taking up insurance.

perhaps the chief of these reasons is the most common refrain of 'money no enough' to buy insurance.

i interpret this line of reasoning to be the plain and simple 'objection' which is one of many red herrings given to the financial advisor.

but what is actually the real issue behind this 'objection'?

my thinking is that the consumer has not really assigned a priority to his/her protection needs and have simply been driven by this universal denominator which i term as instant gratification.

first on the list is the grouping of consumers going after the big ticket items like condos and cars, often borrowing to the hilt to finance these die-die must-have purchases, often to keep up with the in-crowd, or in local parlance, "kala tidak apa, tapi style mesti ada".

next will be those who indulge in the rather expensive cravings for both alcohol and tobacco, these will not only take away many dollars from the so-called budget to fulfil other needs but is also damaging to one's health (have u tried preaching it to this group of people?). i personally have met many prospects who are not casual but chain smokers, needing 2 packets of cigarettes daily to satisfy their nicotine urge which could easily translate to a high three-figure monthly expenditure. ditto for those who guzzle down alcohol in the same way as we drink water to exist.

and consumers chasing social activities like clubbing, movies, reading, etc, can easily create a hole in their wallets/bags. i know of a prospect who chases every 3D movie and pays the highest ticket price to enjoy them at the only cinema hall in town to be totally immersed in the imax experience.

how about those with an appreciation for fine dining or in my book, foodies, without nary a second thought on splashing out 3 or 4 digit sums to satisfy their palate on a regular basis.

and i also know of yet another prospect who must spend her vacation abroad several times a year just to de-stress and get away from the so-called rat race.

and the above listing is by no means exhaustive but serve to illustrate that 'money no enough' is not the real reason for not taking up insurance, not unless the person or family is surviving on our government's many assistance schemes.

and therein is the challange for every financial advisor to help consumers to re-align their priority to firstly, wealth protection planning and then, to satisfying other needs/wants.

uberrima fides

today is my usual scheduled monthly life insurance training open to all of my company's advisors.

and for today, i have chosen to focus on the only 2 products that provides guaranteed protection* even while the child is in the mother's womb. yes, i'm referring to:

a. prudential prufirst gift and
b. axa mum's advantage/mum's advantage plus.


notes:
in june 2010, prudential was the very first insurer to launch singapore's first and only plan, prufirst gift to offer guaranteed protection* even before the child is born.

and in november 2011, axa life followed up with their launch of an almost similar proposition, axa mum's advantage/mum's advantage plus.

*terms and conditons apply

my monthly life insurance training has the dual objectives of equipping our company's advisors with the insights of the latest happenings in the insurance industry and comprehensive product knowledge as well.

my comments:

during the course of my training, i digressed and shared with them on my experience with individuals and families (referred to me by my existing clientele) choosing not to take my advice on full disclosure of their past medical history.

what was their response?

surprisingly or not surprisingly, some of my company's advisors recounted of their similar experiences.

i have no problems with the so-called business that i have 'lost' with the people that i have sat through meetings because they do not seem to see (or agree on) the importance of full disclosure.

but how do i reconcile the fact that these people have taken up insurance for 'peace of mind' and yet, whatever policies they have incepted (without full disclosure) can give them 'peace of mind' when it comes to the crunch should the day come when a claim is filed?

on the principle of uberrima fides or utmost good faith (meaning full disclosure), am i talking about pockets of isolated cases in terms of the people i have sat with (and my company's advisors as well) or is this a full blown problem lurking beneath the surface of the insurance contracts already incepted?

the customer is always right

initially, i wrestled with my inner-self whether to go public with the latest experience of an encounter with a referred prospect, some days after i received a severe tongue lashing from one of my fav clients.

but i have decided to go ahead and blog this episode in the interests of being transparent in my practice as a financial advisor despite it's negativity.

what happened?

my comments:

in what is becoming an increasingly common thingy (to me, at least) with regard to filling out life insurance application forms, there is a clear divide with the person in front of me, on what i term as full disclosure.

this usually boils down to the propect's decision not to make full disclosure of material information such as past medical history and or medical conditions/symptoms which fails to heed the warning in the application form which states:

"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."

but the most troubling aspect of this divide is that the prospect has seen another financial advisor (obviously also not make known to me) whose advise is that there is no need to declare past medical history and or medical conditions/symptoms.

which led the prospect to 'complain' to my fav client and the latter to pour out his 'xxxxxxx' to me.

and of course, i have no disillusions that i may have lost more than the goodwill of my fav client and probably lost all source of future referrals from him.

well, so be it (if that is the case) because when it comes to the tenets of ethics and integrity and serving client's interests, there can be no compromise on these principles because i'm no fly by night operator with a proven track record of heading into my 15th years in the financial industry and intend to be around long into the future, by the grace of God.

UK: Over half of Brits would struggle financially within three months if illness struck

in a nationwide survey of 1,000 British adult employees and 500 employers, carried out between october 18 to 21, 2011, for Aviva by market researchers OnePoll, the opinion poll showed that:

a. over half of UK workers (52%) would be unable to survive financially for more than three months if they were off work with an illness. Around a third (30%) say they’d survive for less than a month. Less than one in ten (9%) say they’d remain solvent for a year or more.

b. if finances were tight, some people would neglect their health in favour of non-essentials. Nearly a quarter (23%) would put their health at risk - with 14% saying they’d miss important health checks and one in ten (9%) admitting they’d put up with health ailments. One in ten (12%) say they’d cut down on cigarettes or alcohol.

c. nearly half (49%) say they’d eat cheaper supermarket offers and fast foods, while one in five would cut down on family holidays. A similar proportion (19%) say they’d use less heating/electricity.

d. nearly seven in ten (65%) workers cite financial concerns as the main reason to get back to work quickly if they are off sick. Regaining a sense of purpose (28%), getting well (21%) and providing for their families (16%) are also high priorities.

e. a significant number of people (44%) fear that going back to work could cause a relapse of their condition and a quarter (24%) worry that they won’t be able to work to full capacity.

on the findings, Steve Bridger, head of group risk, Aviva, UK Health says:

“It’s understandable that over eighty per cent of people think long-term sickness is something that happens to other people. However in reality you never know what’s around the corner and few people have the savings available to support themselves and their families for very long. Employment and Support Allowance can come to as little as £67.50 a week – even less than Statutory Sick Pay - which in many cases would hardly cover a family’s food shopping, let alone their mortgage and other necessary expenses."

my comments:

i wouldn't really be surprised if the results of the opinion poll will probably show similar findings if it were conducted here in our tiny red dot nation.

the latest statistics up to end september 2011 from the life insurance association of singapore (http://www.lia.org.sg) showed that total claims paid out amounted to $3.69 billion to policyholders and beneficiaries.

of these, only $342 million or just over 7% was paid in respect of claims for death, critical illness and disability whilst the remaining or close to 93% going to policies that matured.

this statistic on claims has been pretty consistent across many quarters for many years underlining the fact that our population may be grossly underinsured.

which is why i mentioned that if a similar poll is conducted here, the findings will probably be almost similar to the latest poll conducted by Aviva in Britain.

and herein is the irony, that if insurance is compulsory for all vehicles (except bicycles) plying our roads and expressways, doesn't it make real sense and urgency that every single human life be similarly insured. but alas, this is where the path diverges because personal life insurance remains an option and a choice to be exercised.

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aia - launch of secure term plus

today, aia held a grand breakfast bash cum business meeting for her business partners at the raffles city convention centre.

many of aia's top management were present to grace the occasion, including the ceo, mr tan hak leh and head of partnership distribution, ms ho lee yen.

amongst other business matters, aia unveiled the new secure term plus plan to us which has been repriced (lower) against the competition. with the repricing, aia claims that the aia secure term plus plan is one of the most competitive term plans in the market.

my comments:

what is aia secure term plus?

aia secure term plus is a regular premium payment non-participating term plan available with choice of term for 5/10/20 years.

key features:

a. death benefit
b. terminal illness benefit
c. option lump sum tpd benefit
d. renewability and convertibility options

one key feature is the tpd benefit which has been extended to before the policy anniversary following the life insured's 70th birthday.

another one is the additional definition of tpd when the life insured sustains secure term plus tpd2 on and after the policy anniversary following the insured's 65th birthday being incapable of performing at least two (2) of the ADLs (activities of daily living) even with the aid of special equipment, and always to require the physical assistance of another person throughout the entire activity and such disability must continue uninterrupted for at least six (6) consecutive months.

the abovementioned definition for tpd is probably the first in the industry although aviva's my protector - level/decreasing term has a similar definition but specified to be incapable of performing at least three (3) of the ADLs.

my take is that consumers who are looking for a term plan can do themselves a favour by checking up aia secure term plus before signing on the dotted line.

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axa life - launch of MaxSaver

axa life have just added another traditional product to her stable with the launch of axa maxsaver.

what is axa maxsaver?

this is a participating endowment product that comes with 2 premium term options:

a. MaxSaver 8 – a limited pay regular premium plan with a premium term of 8 years and coverage of 15 years;

or

b. MaxSaver 60 – a regular premium plan that requires premium payment till age 60,

my comments:

in the current investment climate, with capital chasing yield and risks are expected to remain on the downside (at least over the short and medium term), axa maxsaver offers a guaranteed return at maturity of 100% of the sum assured.

for both plans (without supplementary benefit/s), axa life boasts of a simplified underwriting process and policy issuance is subject to one health declaration and on condition that the applicant has not been diagnosed by a doctor in the past 1 year to be terminally ill. the definition of terminal illness is the conclusive diagnosis of an illness that is expected to result in death of the life assured within 12 months. however, death benefit is equivalent to 101% of annualised premium* or total surrender value upon death, whichever is higher.

*The Annualised Premium used to compute the Death Benefit will be based on the last payment mode selected immediately before the death claim.

axa maxsaver must never be taken up for protection as this is primarily a savings vehicle and is another option in the vast range of participating endowments products currently available from all of our insurers.

uberrima fides

recently, i was referred to a client who is probably pretty well known because he/she has a high standing in our country's legal community.

my referral wanted advice on the basics of insurance, in other words, the first 'w' for wealth management which is wealth protection planning.

my comments:

everything went well until the point when my referral disclosed that he/she has already met up with another financial adviser but this is perfectly fine with me as i have always recommended all of my propects/referrals to seek a second opinion.

my referral told me the other financial adviser advised her against the disclosure of a medical condition which happened decades ago without any recurrence.

but of course, i disagreed as an insurance contract is based on the principle of uberrima fides (and insurability) and the applicant has to disclose in the application form FULLY and FAITHFULLY ALL FACTS which he/she knows or ought to know, otherwise the insurance effected may be void and no benefit shall be payable.

note: this warning is usually displayed prominently in a life insurance application form.

our meeting did not end as well as it should be because of a significant difference in terms of the advice given by the other financial adviser and myself.

i came out of our meeting with the hope that my referral will make the right decision in terms of her choice of financial adviser and more importantly, opting for full disclosure and not just selective disclosure.

manulife is relocating

we have just received this email notification from manulife:

Dear advisers,

MANULIFE SINGAPORE IS SHIFTING ITS OFFICE PREMISES TO A NEW LOCATION

We will be closed for the office move on 11 November 2011 (Fri).

With effect from 14 November 2011 (Mon), Manulife Singapore Pte Ltd will be operating its business from a new location. We are pleased to continue working with you at our new office premise at:

51 Bras Basah Road #09-00
Manulife Centre
Singapore 189554
Client Service Centre #01-02C (entrance at Waterloo Street)

Please be assured that our contact number and email remains unchanged. If you have any questions, please feel free to contact me. We look forward to seeing you at our new office at Manulife Centre.

Thank you.

Regards,

Irene Leow
Assistant Manager
Partnership Distribution - FA Channel
Manulife (Singapore) Pte Ltd Reg No. 198002116D
www.manulife.com.sg

my comments:

i was told about this move many months ago and am delighted that it is finally going to happen pretty soon.

with manulife's upcoming shift to a more central location, i believe this will spell good news to many, including myself as i find going to manulife's current premises at river point, 'out-of-the-way' as most insurance companies are sited within the central business district.

we are proud to be a business partner of manulife and we wish manulife even greater successes in the years to come.

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hari raya haji

wishing all my friends, colleagues and muslims everywhere, selamat hari raya aidiladha.

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tenet is relocating

there is a saying that a picture is worth a thousand words and the above picture imported from tenet insurance will say what needs to be said.

my comments:

here's some corporate information on tenet insurance.

Tenet Insurance, a part of the Singapore story since 1957, is about the principles of providing protection, security and stability with quolity products at competitive prices. Owned by Sompo Japan Insurance Inc since May 2010, Tenet Insurance offers a wide range of general insurance products for individuals, families and companies.

currently, tenet is located at 11 collyer quay, #09 - 00, the arcade, singapore 049317 and is open from 0830 - 1730 hours, weekdays except public holidays.

with tenet insurance having being acquired by sompo japan (from hwa hong) since may 2010, tenet insurance can no longer be considered one of the smaller general insurance companies here. i have personally known their senior management team led by ms stella tan and her 2 pretty deputies, ms yen yen and ms mian cher and i've always believed in the company because of their human approach to their business.

we are proud to be a small part of tenet insurance's growth story and our wishes are with them to enjoy more good years ahead.

2 hospitals refused to treat girl with tumour

are we talking about the local scene here?

no, thank God but it is still pretty shocking to hear of this being reported in another part of the world and in this case, a neighbouring country.

just this week, the jarkarta post reported that 2 hospitals refused to treat a 10-year-old girl, Yani with a tumor because her family is poor.

Mustari Soleman, a university student who has taken up the family's cause and in a media statement, said that 2 big hospitals in Jakarta had refused to perform surgery on Yani as the family was unable to pay the costs.

Mustari added that although Yani's parents have a welfare card, they are only entitled to 30% to 50% coverage of the total costs charged by one of the hospitals and yani's parents were told by the hospital they would have to pay a rupiah 20 million (US$2,200) as down payment for the surgery.

which has led Mustari and other students calling on the government to investigate and evaluate hospitals that refuse to treat poor people and cover Yani's surgery costs.

my comments:

after i read this article, one question which immediately comes to mind; is any single human life more precious than the down payment of a mere rupiah 20 million? this is a purely rhetorical question and the answer is a given.

in our tiny red dot nation, our government's policy is never to refuse treatment for everyone rather than going by the famous line from the 1996 hollywood blockbuster, jerry maguire starring tom cruise shouting into the phone to his client, "show me the money!".

this policy is due largely to our government's 3M financing framework consisting of medisave, medishield (and integrated shield) and medifund.

but we are further 'pampered' due to the fact that there are several choices when it comes to options for more comprehensive h&s coverage.

on this, there are not 1 but 5 moh approved integrated shield providers with plans that come with 'as-charged' benefits covering all options from no restrictions to your choice of any hospitals in singapore to lower priced ones with restriction to specified hospitals such as government restructured hospitals.

knowing this is one thing but there is one caveat because unlike medishield, coverage is not automatic, meaning u have to apply for it and your application will be subject to the insurer's underwriting of risk/s.

dbs high notes 5 investors lose appeal

in what has been an eagerly awaited response to an appeal by dbs high notes 5 investors, the court of appeal has dismissed a bid by investors to retreive losses they incurred after buying into a highly complex financial product from dbs bank.

the court - comprising of chief justice chan sek keong and judges of appeal chao hick tin and v.k. rajah - released its judement today.

the collapse of lehman brothers in september 2008 resulted in more than 1,400 retail investors in singapore with massive losses of some $103 million worth of the dbs high notes 5 product.

my comments:

although i have no vested interests here and my empathies are with the dbs high notes 5 investors, consumers should always be alerted by the aeons old warning of "caveat emptor".

this is the basic principle that should guide anyone and everyone in terms of signing on the dotted line prior to any other consideration when parting with one's hard earned money.

what is interesting in the judges' ruling is significant and i quote:

"we think it apposite and timely to remind the general public that under the law of contract, a person who signs a contract which is set out in a language he is not familiar with or whose terms he may not understand is nonetheless bound by the terms of that contract."

chief justice chan sek keong added:

"illiteracy, whether linguistic, financial or general, does not enable a contracting party to avoid a contract whose terms he has expressly agreed to be bound by."

this is a sobering reminder that your signature is key to any contract and even grounds like illiteracy, whether linguistic, financial or general will not cut any ice with our courts, as exemplified by this decision handed down by the court of appeal.

therefore, in all financial products and no lesser for insurance contracts with the accompanying 'fine print' should be properly scrutinised and thoroughly digested. but i suspect most of us will usually give this a miss citing a lack of time or does not assign a priority to doing this.

and because many of today's financial products no longer fall into the plain vanilla category, it remains a 'jungle' out there.

which begs the question; whether u should opt for a diy approach or engage a professional and competent financial advisor?

José Mourinho teams up with Henderson

a special announcement from henderson global investors:
José Mourinho and Henderson Global Investors have teamed up in a new advertising campaign which will run in the UK and countries across Continental Europe and Asia from 31 October 2011. The campaign will feature the “special one” in outdoor, online, national and trade press and below-the-line promotions.

José is the most successful and charismatic football manager of his generation. Football is a global game and José is well known around the world as a result. Real Madrid, José’s current club, is one of the best supported globally due to its success on the field and its strategy of signing the highest profile and most marketable players such as Cristiano Ronaldo. José is a good fit with Henderson’s ambitions to strengthen our position in Europe and Asia.

Henderson has changed massively in the last three years. We are a focused asset management company with ambitious plans for growth. We are confident about our capabilities, proud of our people and we are striving to do the best for our clients whatever the state of the markets. This bold campaign represents an opportunity to let you, our valued client, know that Henderson has changed and for the better.

Andrew Formica, chief executive of Henderson Global Investors, says:

“We have worked hard over the last few years to bring together exceptionally talented and experienced people. There is a high energy at Henderson with a sharp focus on delivering superior investment outcomes for our clients.

José’s success has been built on his passion and drive aligned with careful planning and getting the best from his teams. All of these apply equally to the business of investment management, which is why I am delighted to have José on our team. The association expresses our confidence as an organisation, the pride we have in our people and our commitment to do the best for our clients.”

José Mourinho says:

“In my job I answer to fans who expect 100 per cent commitment. It is what I expect of myself and my team. To be associated with a company I must be sure it shares my passion for delivering results and has good reason to be confident about its abilities.

That is what impresses me about Henderson. For me, that is why Henderson is special.”

my comments:

besides sir alex ferguson, i am also a fan of jose mourinho but not when his team is lined up against the football club which i have supported since my childhood, manchester united.

the power of a familiar name or face often 'sells' and it is no surprise that henderson has opted to team up with one of the most famous names around the world which is jose mourinho.

here in promiseland independent, and perhaps due to my higher profile (from the media) and hopefully good reputation, i have often been blessed in attracting propects/fa wannabes to my company and myself.

but at the end of the day, if i continue to remain focused on clients' interests, that is really the name of the game and the so-called 'ingredient' to being around for the long haul.