Author Archive

Posted on August 26, 2010 - by Adrian Khiat

Is Whole Life Plan necessary?

I again have to emphasize that I’m not comparing a “Buy Term Invest the Difference” Vs “Buy Whole Life Plan” argument. Getting into such arguments will waste me a lot of time where I rather spend to serve my clients and expand my business. Writing this blog is to feed my interest in writing about Financial Planning issues and my opinion of the industry and not to generate businesses or to engage in time wasting arguments. (A mistake that I committed in my old website).

Whole life cover is not for all
In my opinion, it is necessary for some and not necessary for some. Let us look into our basic Medical Insurance needs first.
1) Hospital and Surgical – Urgent and Important
2) Critical Illnesses Coverage (Temporary needs) - Urgent and Important
3) Whole Life CI Coverage (Permanent needs) - Not Urgent but Important
For people who can confidently self-insured their Permanent needs need not get a Whole Life plan.

We must know what our priorities are first. There are many agents or FAs who will try shift priorities of their prospects. They will try to make the temporary needs to become permanent in order to justify a higher WL coverage. I will not say that there is anything wrong with this but provided that the adviser had did a good job by recommending after analysing the propects other Financial needs such as Retirement, Children Education, short/mid/long term goals, investment profile based on experience, willingness, ability, etc and have informed the client fully on their options and client insisted on his recommendation.

I like to share 2 common practices. Read more…

Posted on August 16, 2010 - by Adrian Khiat

3 minutes investment updates – 08/10

July is a month of relief as we see a reprive of the market indices after the downturn in May and June. For my clients who had switched in during July, you had made small gains with the 10 to 20% reallocation back into equities during the month. Despites saying these, the outlook ahead are still very very uncertain. Pls go through the next 3 minutes with me.

First minute – Let us go through the indices
a) The country indices are beautiful for the month of July. I’d mentioned about Russia during my last 2 updates and in July, they rose 12.2%. Emerging markets did well and rose 8.3% and Asia Ex-Japan rose 5.7%. The surprising part is that US rose 6.9%. (more…)

Posted on August 12, 2010 - by Adrian Khiat

Best time to save for Retirement?

Whether we are happy or not, the day of our retirement will come. It may come earlier or later than we expect, depending on our luck and strategy to stay ahead in our senior years. It will be fortunate if we are able to work like our MM Lee at a ripe old age of 85 earning $3million a year and enjoying what he is doing. But I don’t think everyone of us will be that lucky under a highly competitive and intense environment like Singapore where talents from every corner of the world are completing with us.

As a Financial Planner in my early 30s, I’d met many people of around my age and get the privilege to understand how they feel about retirement. I also get to see the challenges faced by Singaporeans in accumulating this nest egg when there are always so many other things in life that grab away our retirement monies.

I am far from retirement age but I always believe that that we have to plan for it as young as from our first pay-cheque regardless how little we may start out with. Failing to start early and consciously will mean more challenges as we get older. Today, I will also like to share my views on these challenges towards retirement planning. Read more…

Posted on August 4, 2010 - by Adrian Khiat

Did property prices rose for good reason?

I’m very concern to see how fast property prices rose over the past 2 decades especially over the last 5-6 years. Such trend will likely put on a very heavy burden on newer generations like those below 30 yrs old. I remembered that my parents purchased their 5-room HDB flat at around $70,000 back in 1990 and today, the same property rose to as much as $450,000, not including the Cash over Valuation(COV) if they are to sell the house. This means that over the past 20 years, property prices rose 6.5 times at around 10%p,.a.

Though I don’t have the concrete figures, I believe the wage increase in Singapore for a middle income family to be around 3%p.a. Assuming the typical Singaporean wage to be $42,000p.a in 2010, it may means that the average annual wage in 1990 to be around $23,000. If my estimated figure is true, it means that our parents in the past need about 3-4year of their income to pay off their HDB flat. For our generation, it takes 10-11 years of our income to pay it off. (more…)

Posted on August 1, 2010 - by Adrian Khiat

100% Hospitalisation Expenses Insurance coverage may not benefit Healthcare System in Singapore

My letter to ST Forum recently. Believe they will ignore me again as they never seems interested to publish financial planning related issues or maybe that I’m not a big shot enough…

** QTE **

Medishield is a low cost catastrophic medical insurance scheme introduced in 1990 to help CPF members meet medical expenses from major illnesses. Over time, several insurance companies introduced their version of shield coverage meant for those who wish to stay in higher wards and hospitals. These shield plans operate on a co-payment feature by mean of “Deductible” and “Co-insurance”. These insurance companies later also introduced riders with premium payable by cash to cover the deductible and co-insurance of these shield plans which mean that their policyholders need not pay a single cent in event they are hospitalised. (more…)

Posted on July 19, 2010 - by Adrian Khiat

3 minutes investment update – 07/2010

First Minute – Lets appreciates the indices
1.       The market recovered quite well for the emerging and Asia economies after the steep drop in May. Most indices are overall still in the red for the whole of 2010.
2.       Japan is one of the worst performer in 2010 with the political uncertainties lingering. US did quite badly and yield -8.5% in 2010 as well.
3.       Emerging Markets, Hong Kong and Russia indices lost more than 6% in 2010 as well.
4.       Gold and oil prices rose slightly. Gold price is near to all time high and Oil price is 13% below end April price.
5.       Vix Index rose 7.7% in June which reflect the continual uncertainties
6.       Baltic Dry Index dropped very significantly to 2406. It is something worth monitoring as it may reflects the demand of shipping raw material across the globe.

Second Minute – Double Dip Reccession? Read more…

Posted on June 12, 2010 - by Adrian Khiat

3 minutes investment updates – 06/2010

Posted on May 31, 2010 - by Adrian Khiat

The Non Disclosure Problem (1)

I met 3 clients with non disclosure cases recently. They have certain medical conditions but choose not to disclose during the application of a life or medical insurance. Let me share what happened for the 3 of them.

1) Mr Yeo previously suffered spinal disorder during his National Service about 5 years ago and had a day surgery to correct the spine. He was subsequently downgraded to Pes C9L9 after medical review with the specialist. He did not visit the specialist after National Service and do not have any medical report with him. The insurance agent from “P”, while signing up for his ILP and medical Plan, told him that it is not necessary to disclose it since he is not seeking treatment now. All his policies went through without a glitch.

2) Mdm Ong went for medical checkup specially for woman in 2006. The specialist found that she has fibroids at her womb. She signed up a Life policy with ”A” in 2007 and chose to answer “No” in her proposal form when asked if she has cyst, fibroids, growth, etc. Her reason was that her doctor told her that Fibroid is very common, normally non cancerous and no action is required for her case. Her policy also went through without a glitch.

3) Ms Mary had cysts and growth that was non cancerous but had distorted her Fallopian Tube. The doctor advised her to remove the left Fallopian tube. She took up an ILP from ”H” and did not declare this condition. She had informed her adviser about it but the advisers told her that it is not necessary to inform the insurer because the operation was done in Philippines and it is not causing an issue for her. Her ILP of course went through without a glitch again. Read more…

Posted on May 21, 2010 - by Adrian Khiat

The Non Disclosure Problem (1)

I met 3 clients with non disclosure cases recently. They have certain medical conditions but choose not to disclose during the application of a life or medical insurance. Let me share what happened for the 3 of them.

1) Mr Yeo previously suffered spinal disorder during his National Service about 5 years ago and had a day surgery to correct the spine. He was subsequently downgraded to Pes C9L9 after medical review with the specialist. He did not visit the specialist after National Service and do not have any medical report with him. The insurance agent from “P”, while signing up for his ILP and medical Plan, told him that it is not necessary to disclose it since he is not seeking treatment now. All his policies went through without a glitch. Read more…

Posted on May 10, 2010 - by Adrian Khiat

3 minutes investment updates – 05/2010

Though the info below might be a bit outdated due to the last 3 few day of hysterical market drop which wipe off 2010 gains in all markets, I will still like to share my views for the month of April and do take 3 minutes of your time to read through.

1st Minute – Let us go through the indices

a) April is the month where indices continue their gain following the trend in March with exception in Hong Kong which follows the China Market which also took a dip due to the monetary tightening in the country. Both Hong Kong and China are among the worst performing countries in 2010.

b) Gold price surged 6.0% probably due to the expection of crisis coming up.

c) Vix index rose 25.4% in April in expectation of volatility ahead in Europe that that time

d) Baltic Index remains bouyant and up nearly 12% in April. Trade seemingly looks ok and going well.

2nd Minute – Let us look at the Greek Crisis for this month
Read more…