Archive for the ‘Insurance’ Category

Posted on March 3, 2010 - by Martin Lee

Existing Medical Insurance Cover and She Didn’t Know

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.

Read more…

Posted on February 16, 2010 - by Aaron Lau

Insurance (Part 3 of 8)

Insurance is the most common risk transfer technique in risk management.

There are 3 layers of insurance protection.

Firstly, the social layer, provided by national schemes. For Singapore, it will be the insurance from CPF like DPS, HPS, Medishield, Eldershild, CPF Life. They are usually the most basic required and premiums are most affordable.
Secondly, the group layer. This is coverage provided by employers, unions or associations. Their premiums are also relatively affordable. However, they will no longer cover when leaving the organization and there is usually a age limit, resulting in a drop in coverage when it is most needed. Read more…

Posted on February 16, 2010 - by Tan Kin Lian

Achive top position in life insurance sales

Life insurance companies compete yearly to achieve the top position in life insurance sales. This is an indicator of success and the productivity of the sales force. Several decades ago, the competition was based on annual premium on new policies, but in recent years, 10% of the single premiums are added to the annual premium to get the weighted premium as a measure of the sales.

To achieve sales and energize the sales agents, the life insurance companies introduce new and innovative products every year. These new products are variations of the old products, but have some changes to allow the agents to market the product. The variations may take the following forms:

a) a shorter period to pay the insurance premium
b) additional risks that are being covered
c) change from guaranteed to investment-linked payouts or back
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Posted on February 14, 2010 - by Aaron Lau

Risk Management (Part 2 of 8)

Risk management in financial planning is the systematic approach to the discovery and treatment of risk.

The objective is to minimize worry by dealing with the possible losses before they happen.

The process involves:
Step 1: Identification
Step 2: Measurement
Step 3: Method
Step 4: Administration

Risk Identification
The process begins by identifying all potential losses that can cause serious financial problems.
(1) Property Losses – The direct loss that requires replacement or repair and indirect loss that requires additional expenses as a result of the loss.
(For example, the damage of the car incurs repair cost and additional expenses to rent another car while the car is being repaired.)
(2) Liability Losses – It arises from the damage of other’ property or personal injury to others.
(For example, the damage to public property as a result of a car accident.)
(3) Personal Losses – The loss of earning power due to death, disability, sickness or unemployment and the extra expenses incurred as a result of injury or illness.
(For example, the loss of employment due to cancer and the required treatment cost in addition to normal living expenses.) Read more…

Posted on February 6, 2010 - by Patrick Lim

madam sabrina tan

ST ONLINE FORUM – Hit Hard by insurance policy termination

I BOUGHT three policies from Prudential for my children 15 years ago. Recently, due to a need for cash, I decided to terminate one of the policies.

To my shock and disappointment, the amount I am getting back upon surrendering the policy equates to less than 50 per cent of my contribution in the last 15 years.

I can understand if the early termination results in an 80 per cent return, but 50 per cent?

The customer service officer told me that given the crisis last year, policyholders did not have good bonuses and therefore the drop in value. So my questions are:

How can the year’s bonus affect 50 per cent of my investment because a good bonus does not double my principal sum.

Is there an organisation in Singapore that ensures that policyholders are being protected?

As much as there are risks, what about those who have invested for 30 years hoping to get a good return only to be given the same answer?

Will the authorities please look into this so all of us who hope to retire well by investing in insurance policies will not lose a substantial amount of our hard-earned cash.

Sabrina Tan (Mdm)
Read more…

Posted on February 5, 2010 - by La Papillion

Endowment plan option for education fund

I was here and there discussing endowment plan, as a viable option to save up for child’s education, with a few other bloggers. I had already shared my views in my previous posting here, so I would just like to substantiate with actual benefit illustrations. I would withhold the actual benefit illustrations, but will put up a summary of three companies that my very hardworking girlfriend had put up for me. She did the entire comparison herself, kudos to her!

A few key assumptions:

1. The endowment plan is bought on the life of my hypothetical kid, aged 1 on the next birthday

2. The proposer of the plan is me, aged 33 on my next birthday, non-smoker

3. The plan is bought with a rider, which waives off all future premium in the event that the proposer (aka me) kena death, TPD or CI

4. The plan has a sum assured of 30k over a duration of 20 yrs.

Okay, with the key assumptions laid out, here’s the summary of the three plans that my gf had done up for me. I will mosaic the names of the three companies mentioned. If you need their names, liase with me and I’ll fix you up with my gf. She’s an independent financial advisor, just to sell her koyok here.
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Posted on December 27, 2009 - by Tan Kin Lian

Advice on making insurance claims

Thee are three types of insurance claims that can cause you a big surprise and out-of-pocket payment. They are:
a) health care
b) personal accident or travel
c) motor repair
d) home repair or reinstatement

Here is a common example. You have been paying premiums for an expensive health insurance policy for many years. You went into hospital thinking that the entire bill is covered. When you submit your claim for reimbursement, you are told of the items that are not covered, the caps, exclusions, deductibles and other items. Your claim can be less than half of the amount that you spent.

Your claim for personal accident or travel is also subject to exclusions, limits and deductibles. A similar situation can occur with a motor repair bill. You are told about the Excess, exclusion or other limits.
The hospital and motor repair bills can occur every few years, so many people have been taken aback by their poor claim experience. Read more…

Posted on December 18, 2009 - by Adrian Khiat

System and Discipline

My non-investment clients or friends always pop 2 questions for me “Should I buy or sell now? or “What to buy and sell now?”

They always expect that I have inside information and able to give them “Tips” on making quick money. When they realise that I don’t have any inside information to fulfil their expectation, they will go back into the stock market and look for their quick money investments.

Clients often have an unrealistic expectation of advisers and advisers who are able to make them believe that they are able to fulfil their expectation will make a sales. However, are advisers who are not able to create such impression deems as incompetent?

Some advisers who focus on returns can invoke greed of the client. Some adviser who warns on the volatility of the market will invoke fear of the client. The fear factor is frequently stronger than the greed factor and many will choose not to invest. As more people around them makes money, the greed factor will over the fear and start chasing the hot trend. Read more…

Posted on December 13, 2009 - by Wilfred Ling

Question on medical insurance with low claim amount

“Dear Wilfred, For the past 20 years I paid my medical insurance product called Z faithfully without any claims. Recently I was admitted to hospital at a private hospital. The bill came up to be $X,XXX.. I was dismayed that I could only claim a shocking $XXX (10 times less than the original bill). The insurer cited technicalities as an excuse. I want to complain to CASE. I am writing this so the public is made aware of such pitfalls in their medical insurance. Regards – J”

Dear J,
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Posted on November 11, 2009 - by Tan Kin Lian

Increase in motor insurance premiums

Many motorists have seen a large increase in motor insurance premiums in recent years. Some have their renewals rejected, due to bad luck or bad driving that have resulted in two or more claims. In some cases, the large claims were due to fraudulent claims lodged by third parties.

I have received e-mails of this nature from motorists over the past years, “Mr. Tan, I have been driving without any claims for more than 15 years. Last year, I had an accident. The other party lodged a large claim. The insurance company paid the claim, but did not check with me. This year, they want to increase my premium by 30%. What should I do?”

I usually advised them to find another insurance company and provided them this list of hotline numbers. However, they were unsuccessful in most cases, and most insurance companies would not want to take a motorist with a claim.

Some motorists have their renewals rejected due to two or more claims. They were not able to get another company to take over the insurance. Read more…