TheFinance.sg » Martin Lee

Case Study of an Unplanned Hospitalisation Financial Disaster

Martin Lee — Wed, 23 Jun 2010 01:00:31 +0000

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Patrick (not his real name) suffered some discomfort late at night. As the normal clinics were already closed, he went by himself to a private hospital to seek consultation.

While waiting for the test results, Patrick collapsed and went into a coma. His condition worsened and he ended up having multiple organ failure. Four specialists (including one anaesthetist) had to be put on standby to stabilize his condition. Patrick also had to be connected to a life support machine in ICU just to keep him alive.

medical-insuranceEven though Patrick was fairly well off, this unexpected incident had lead to a financial disaster for his family due to a number of factors:

1) Patrick only had a private shield plan that covered him only up to A ward in a government hospital, so he can only claim 65% of the private hospital bill from his insurance. The original bill is a whopping $12,000 a day so the uninsured portion works out to be about $4200 a day. There is also an annual limit of $250,000 for his current insurance plan. Transferring him to a government hospital is out of the question due to his condition. Read more…

Higher Bad Debts Among the Young

Martin Lee — Tue, 25 May 2010 10:00:29 +0000

Photo by RogueSun Media

An article in the Straits Times reported that younger Singaporeans in the 21 to 29-year-old age group have the highest default rate compared to other age groups when it comes to loans.

According to numbers from DP Credit Bureau, 7.54% of people in the 21 to 29-year-old age group default on their credit card loans compared to the average default rate of 3.88% across all age groups. Of those who do not default, I wonder how many people actually roll over the debt (do not pay in full) and incur the excessive interest rates of credit cards.

A credit card can be a very useful tool if used correctly. If you pay all your credit bills on time, you are essentially getting a free short term credit line. Do it for all your bills every month and it would be like a perpetual free credit line. Not to mention the discounts and credit card points you get. Read more…

Pre-existing Conditions for Medical Insurance

Martin Lee — Thu, 08 Apr 2010 01:00:37 +0000

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99% of medical (or hospitalization and surgical – H&S) insurance provides coverage with an exclusion for pre-existing conditions unless the condition was declared and accepted by the insurer. Of course, if you knew of a condition and didn’t declare it, it will still be excluded. Without this exclusion clause in place, people can simply wait until they develop a medical condition before they take up cover for themselves.

pre-existing conditionsBecause of this clause, it is usually not advisable to switch and hop around where health insurance is concerned. You wouldn’t really know what pre-existing conditions you might have and the claims process might be more troublesome if there is really a pre-existing conditions.

However, the term pre-existing is somewhat ambiguous and we would need to refer to the actual policy wording to see what it means.

Aviva recently improved their definition for pre-existing conditions: Read more…

Fundsupermart to Impose Platform Fees

Martin Lee — Sat, 03 Apr 2010 01:07:49 +0000

Recently, Fundsupermart (FSM), a popular platform used by many retail DIY investors to buy unit trusts, announced that they would be charging their users a platform fee with effect from May 2010. The charges will apply to investments made using cash or SRS. Increasing operating costs has been cited as one of the reasons for imposing the fee.

Under the new pricing structure, investors would expect to pay an additional 0.5% p.a. for equity funds and 0.2% p.a. for bond funds. To make up for the platform fees, upfront sales charges would be reduced. In addition, there will be a short promotion of 0.75% sales charge from 1st to 22nd April 2010.

The complete new pricing structure can be found here:

Changes to FSM’s Pricing Structure

The suddenness of the news surprised many of FSM’s users and as expected, a number of them are unhappy about the new charges being forced on them. Read more…

Alternative Investments Gone Wrong

Martin Lee — Fri, 19 Mar 2010 11:00:33 +0000

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In the past few years, we had seen many so-called alternative investments gone wrong. From land banking to oil fields (oilpods) to wine.

If you had a bad experience with some of these investments, you would likely have gone through a tough time trying to get any form of recourse including being put on a merry go round between your MP, MAS, Small Claims Tribunal (SCT), FIDRec, CAD, the police and a lawyer (depending on who you approach first in the chain). I sympathize with those who have been put through all these.

All these products continue to stay as unregulated investments and do not fall under the purview of MAS, which means the alternative investment product providers can pretty much do what they like. Read more…

Existing Medical Insurance Cover and She Didn’t Know

Martin Lee — Wed, 03 Mar 2010 11:00:28 +0000

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The other day, I was referred to someone who wanted to get some health (or medical) insurance. According to her, she didn’t have any medical insurance cover and wanted to use some of her Medisave to get an appropriate cover.

This was a fairly straightforward transaction but usually, what I will do is to double check whether that person has any existing medical insurance in place first. This of course includes the integrated shield plans.

One way of checking this would be to check that person’s CPF yearly statement (either hardcopy or online). See the example below which shows a person having a medical plan with Aviva.

COV for HDB Flats Hit Sky High

Martin Lee — Wed, 27 Jan 2010 11:00:21 +0000

Fresh data from the Housing Board (HDB) showed that the median cash over valuation (COV) for HDB resale units rose to $24,000 in the fourth quarter of 2009. That is double the $12,000 median in the previous three months and breaks the COV record of $22,000 achieved in the fourth quarter of 2007.

The top three towns had medians of $50k, $50k and $38k for executive units; $40k, $33k and $31.5k for 5-room units; and $35k, $35k and $30k for 4-room units respectively.

There was even a 5 room resale HDB unit sold for $730,000 with a whopping COV of $85,000.

For those who did not study statistics, median is defined as the numerical value separating the higher half of a sample from the lower half. Read more…

The Year Ahead in 2010

Martin Lee — Thu, 07 Jan 2010 01:00:12 +0000

Photo by yoppy

What a difference a year has made.

At the start of 2009, all was dark and gloomy amidst the greatest financial crisis the world has seen.

Now, in 2010, there seemed to be a lot of optimism, at least among the people I spoke to who are starting to invest into stocks again.

Ironically, those who have made the most money would be those who have invested in the depth of the crisis and held on to their holdings.

The stock market is driven largely by sentiment and if sentiments change, the direction of the market can also change.

What are some factors that can threaten to trigger a change in sentiment?

Unwinding of US Dollar Carry Trade

The US dollar, forsaken just a few weeks ago, has staged a remarkable rebound since the starting of December 2009. Nearly everyone was bearish on the USD back then and it has appreciated nearly 5% against both the euro and the Japanese yen. Read more…

2009 in Review

Martin Lee — Tue, 05 Jan 2010 11:00:40 +0000

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Another year has passed us by and it’s time to recap some major events that has happened both locally and globally in the past year.

1) Barack Obama gets inaugurated in January as the 44th president of the United States in the middle of one of the worse financial crisis in the world. He goes on to win the Nobel peace price in October.

2) Temasek Holdings announces in February that its CEO, Ho Ching, will step down and replaced by Charles ‘Chip’ Goodyear. This appointment was subsequently cancelled in July. Temasek also issued Singapore dollar denominated bonds for the first time.

3) Global stock markets bottomed in March and went on a massive recovery rally for the rest of the year. Sentiment improved significantly with investors no longer pricing in “depression” levels for risk assets. Read more…

Sino Environment News

Martin Lee — Thu, 10 Dec 2009 01:00:42 +0000

Photo by kevindooley

Sino Environment Technology is a S-Chip whose trading has been suspended since September this year.

I seldom write about Singapore listed China stocks as I don’t have any personal interest in them. The Confession of a S-Chip CEO email that I read the other day rekindled my interest in this topic so I thought I will post some updates of the latest S-Chip scandal that is going on involving Sino Environment.

Signs of irregularities for Sino Environment first appeared in March this year when it was discovered that their CEO, Sun Jiangrong, had defaulted on his personal loan of S$120 million. This would usually not be a direct problem of the company, but the CEO in this case had pledged his own shares in Sino Environment as collateral for the personal loan.

This was actually a smart way of monetizing one’s own shares without actually selling them. Yet, no disclosure of the pledge of shares was needed to be made to SGX at the point when the loan was taken. Read more…