Tuesday, December 25, 2012

Christmas 2012

wishing each and everyone, all the joys and blessings of Christmas!

Tuesday, December 4, 2012

oac - launch of mortgage protector advantage

oac or overseas assurance corporation, a wholly owned subsidiary of great eastern holdings and a member of the ocbc group has just launched a mortgage reducing term assurance plan, mortgage protector advantage which refunds all the premiums at the end of the policy term if no claim has been made. there is also a guaranteed surrender value of at least 40% of total premiums paid after policy has been in force for 7 years.

this is a first in the market as no other insurer offers a premium refund for similar class mrta products. 2 years ago, oac launched a refundable premium mortgage plan known as mortgage protector plus which differs from the current one in that it is priced to be a single premium plan.

my comments:

for mortgage protector advantage, the premium for a 40 year old male, non-smoker with sum assured of $1 million for a term of 20 years at an interest rate of 5% works out to have an annual premium of $5,846.67 which is payable for 15 years totalling $87,700.05.

in contrast, the mortgage protector (without premium refund) is priced with an annual premium of just $1,760.00, also payable for 15 years totalling $26,400.00.

whatever your views on this latest mrta plan by oac, one cannot deny that it adds yet another option available in the highly competitve mortgage insurance market.

Monday, December 3, 2012

china bank's 'troubled wealth product'

in an article with the same title, it was reported that investors who had bought products issued by zhongding wealth management centre rushed to huaxia's shanghai branch yesterday, after weekend reports online that the products had stopped making payments which reuters could not confirm on the payment status of the products.

the bank said it was "aware" of reports that the investments could not be repaid when the products matured but huaxin did not confirm those reports.

in the last few years, sales in china of so-called wealth management products (some with terms as short as a few weeks) have soared (which grew to 12.14 trillion yuan in the first half of 2012) as banks compete for deposits with products offering higher interest rates than those offered on savings accounts. huaxia bank was one of the 5 most active issuers cited in the july report by consultancy cn benefit.

my comments:

the question to ask is; are there really investments in the financial jungle which promises quick and higher returns? but of course, there are if u base the answer to the question on the many ads in our dailies, the internet and even the social media, promising quick and big returns.

my take is there will always be products that are dangled offering quick and higher returns as compared to say, plain vanilla bank deposits.

but the more significant point is, does the higher returns come with lower risks and more importantly, are the higher returns fully guaranteed?

and that is the $64 million dollar question.

but do always keep in mind the cardinal principle that the higher the risks, the higher the potential returns but these are usually always never guaranteed.

which leads us to the other principle which is 'caveat emptor' and heeding this warning may perhaps be the hindsight which everyone will surely appreciate rather than be sorry afterwards.