disclaimer: all the blog entries here are solely for your information only and does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You may wish to seek advice from a financial adviser rep before making a commitment to purchase any insurance product. In the event that you choose not to seek advice from a financial adviser rep, you should consider whether the product in question is suitable for you.
today, i attended tokio marine life insurance's soft launch of tm retirement life at ntuc auditorium at one marina to roll out their latest product, tm retirement life. the official launch date is may 31, 2012.
what is tm retirement life?
this is a hybrid limited premium participating whole life plan with yearly cash benefits from either age 60 or age 65 (referred to as the 'payout' age) for as long as the life assured lives.
the plan provides coverage for death and terminal illness and is available for both single life and joint-life application (husband and wife). starting from the selected payout age (either age 60 or age 65), a guaranteed cash benefit equivalent to 5% of the sum assured will be payable yearly for as long as the life assured is alive. payment of the cash benefists does not reduce the death benefit and sum assured.
once again, as in most of tokio marine life insurance's participating products, the reversionary bonus rate is projected at $10 per $1,000 sum assured compounding at 1% per annum. this is neither aggresive nor overly optimistic as indeed, the worsening eurozone debt crisis has seen a flight of captial to safety like us and german government soverign papers.
this product may be suitable for consumers looking for a perpetual 'bank account' (note, not perpetual securities) and can be considered to be an annuity also. tm retirement life is also open to joint-life application which of course is restricted to a legal husband and wife relationship. what's interesting is the plan will continue to pay the guaranteed cash benefit which is equivalent to 5% of the sum assured for so long as any of the life assured is alive from the selected payout age.
today, there are not many insurers offering an annuity product in their stable and it is perhaps not difficult to understand why this is so, against the factor of ever increasing life expectancy here because our tiny red dot nation have one of the longest life expectancy on planet earth. and it is simply very demanding of the insurer to come out with such a product due to the very stringent requirements of reserves versus liabilities on a very long term horizon.
and last but not least, promiselanders now have an additional option (a lifetime stream of guaranteed income) to offer consumers.
the cpf board has announced that cpf members turning age 55 between between 1 July 2012 and 30 June 2013 will need to set aside a Minimum Sum (MS) of $139,000 soon. the previous minimum sum for 2011 was $131,000.
as for the medisave minimum sum which is the amount that a person turning 55 needs to set aside for his hospitalisation expenses in subsidised Class B2 and C wards, subsidised outpatient treatment for selected chronic conditions and basic MediShield and ElderShield premiums in his old age, will be raised from $36,000 to $38,500. cpf members will be able to withdraw their medisave savings in excess of the medisave minimum sum at or after age 55.
the maximum a cpf member may have in his medisave account known as the medisave contribution ceiling is set at $5,000 above the medisave minimum sum and therefore, the latter will be increased to $43,500 from $41,000 previously. any excess of the prevailing medisave contribution ceiling will be transferred to the cpf member's special account if he/she is below age 55 or to his/her retirement account if above age 55 and has a medisave shortfall.
is it any surprise that the adjustments to the cpf minimum sum, the medisave minimum sum and medisave contribution ceiling has been adjusted to account for inflation, longer life expectancies and rising expectations of quality of life post retirement.
even though the minimum sum is $131,000 currently and yet, a vast majority of cpf members still fall short of the cpf minimum sum, even after pledging their property which is permitted up to 50% of the minimum sum with the latest figures showing that only 45% of cpf members have met the minimum sum requirement.
according to the results of a new associated press-cnbc poll, 50% of americans think facebook is a passing fad and half of those polled also say the social network's expected asking price is too high.
facebook has increased the price range of it's ipo to between US$34 and US$38 per share from an initial US$28 to US$35 per share in response to very strong demand and is expected to raise more than 10 times as much as the US$1.67 billion raised in google inc's 2004 ipo.
whether u believe facebook's share is fairly valued or over-valued, only time will tell but every investment carries risks. but it is surely the other way around for insurance where the risks are transferred to the insurer/re-insurer through the payment of a premium.
and therefore the question arises, are u under-insured or worst, uninsured?
perhaps not surprisingly, the head honcho of ntuc-income, mr tan suee chieh has responded to ms lim siew kim's letter (published yesterday) in today's st forum with the headline; "sorry, we should have accepted application."
in admitting that it was a mistake, mr tan expressed his apologies and regretted that it happened (the rejection of the application of ms lim siew kim for a hospitisation policy for her baby daughter) and added that based their investigation, ntuc-income would have accepted their application as it has always been for such children. furthermore, mr tan disclosed there has not been any change in the co-operative's underwriting policy which is to protect the interests of existing policyholders and not to maximise profit.
mr tan reiterated the philosophy that ntuc-income puts people before profit and one example quoted is ntuc-income's support for the NKF Kidney Live Donor Support Programme, where the co-operative insurer and the National Kidney Foundation have teamed up to provide life and critical illness insurance to kidney donors who pass a means test.
and since 2009, ntuc-income is the only insurer in Singapore to provide a group living policy to ensure that kidney donors have insurance coverage in case they fall sick due to the organ donation.
mr tan ended his letter by telling everyone that ntuc-income is not a perfect organisation and mistakes do happen but on a positive note, emphasised that they will learn from it.
it is indeed heartwarming to know that mr tan himself has issued an apology for the company's 'mistake' and like any other organisation, no one should deny that mistakes can and will happen and the organisation can learn from it and be better from the experience.
i have many positive experiences with ntuc-income, not only as a financial adviser rep but also as a customer and i have no reason not to be happy with my relationship with the only co-operative insurer in Singapore.
there's a letter published in the st forum today from one ms lim siew kim who highlighted the fact that her daughter's application for a hospitalisation plan was accepted by great eastern life but rejected by ntuc-income.
ms lim's baby daughter was born with one kidney but was deemed to be healthy in every other aspect by their paediatrician.
in rejecting the application, ntuc-income stated that their daughter's absent kidney and the remaining other kidney being larger than normal, poses a risk. ms lim was impressed with the professional assistance in applying for a policy with great eastern life and approved their daugther's application in less than two weeks.
first, kudos to great eastern life but i can't assume to speak for ntuc-income in this case but it is certainly an abnormaly to be rejected here but accepted by another insurer. perhaps ntuc-income should not have rejected this case but instead, channelled it to higher management for further consideration.
like anyone else, i await ntuc-income's response to ms lim's letter and i believe the head honcho of ntuc-income, mr tan suee chieh will weigh in with his response.
in the latest survey commissioned by the life insurance association of singapore, the key findings revealed:
a. 72% are satisfied with the insurance industry as a whole
b. 74% believe their financial adviser acts in the best interest of the customer
c. 80% still needed advice on the different insurance products before making a decision
d. 77% are aware the adviser's recommendation comes from the policy's premiums
e. 59% know that the adviser's commission is higher in the 1st year and lower in subsequent years and that
renumeration changes depending on the product
f. 58% said that the renumeration policy has no impact on which product they buy and
g. 9% said that the current payment structure is unfair and that more transparency is needed.
this survey was conducted in december 2011, way before the monetary authority of singapore announced the
FAIR (financial advisory industry review) which will undertake a comprehensive look at the life insurance
the lia survey has chalked up very positive feedback on the life insurance industry and financial advisers with a total
of 800 people being polled.
even though these findings are positive, i support the announcement by the monetary authority of singapore, the composition of
the review panel for the FAIR, headed by MAS’ Assistant Managing Director for Capital Markets, Mr Lee Chuan Teck.
it is also my hope that everyone will benefit from the proposed recommendations of the 5 key thrusts of FAIR:
(i) raise the competence of financial advisory (FA) representatives;
(ii) raise the quality of FA firms;
(iii) make FA a dedicated service;
(iv) lower distribution costs; and
(v) promote a culture of fair dealing.
it has been reported that ms emma yong, aged 36, has passed on after a prolonged bout with late stage stomach cancer which was diagnosed in january last year.
the cancer went into remission through aggressive chemotherapy but she suffered a relapse towards the end of last year.
our hearts, thoughts and prayers go out to her family and loved ones.
i can relate to the loss of a dear one to cancer as my younger brother also lost his battle with late stage cancer of the kidney some years ago. and this year, all the wakes my wife and myself have attended have been deaths caused by cancer and not necessarily confined to late stage cancer. many of these deaths are certainly not in the script as these people are still in the prime of their lives not unlike ms emma yong at 36 years is another talented individual gone too soon.
and cancer will continue to account for many deaths (sadly) because it is still one of the leading cause of deaths in our tiny red dot nation.
but there will also be many cancer survivors (thank God) and for this group of people whom i have met over the course of my role as a financial advisor, the good news is that many will continue to lead normal lives but on the flip side, taking up insurance may remain a wish on their 'things-to-do' list.