Hi Mr. Tan,
I am an undergraduate who reads your articles with interest as they give me good insights into the basics of financial planning from a relatively unbiased point of view.
You mentioned about distribution costs = 100% of annual premiums and deduction costs = 20% of total premium value as 'benchmarks'. May I ask how did you arrive at these figures?
I was recommended to a financial advisor. He introduced me to a limited (25yr) whole life insurance which covers 150,000 life and CI rider for $250/month. I rejected it as I have no intention of getting insurance now since it'll eat up too much of my monthly allowance. After reading your articles, I was shocked to realize the true meaning of distributive/deduction costs involved. I'd like to clarify the 'figures' you quoted.
REPLY
you have to find the answers from my book on Financial Planning or the FAQ in my website. I am not able to give individual coaching on these matters.
www.tankinlian.com/ishop
Saturday, January 8, 2011
Life insurance policies and benchmark of 20%
Hi Mr Tan,
You always mention that Benchmark for Deduction should not more than 20% after 25 yrs for life insurance.
Do you mind to tell me which are the insurers that meet this benchmark ?
REPLY
None of the life insurance policies in the market now meet my benchmark of 20% deduction. It is better for the consumer to buy term insurance and invest your savings in an indexed fund. The long term cost is likely to be less than the 20% deduction. Read my book on financial planning (available at www.tankinlian.com/ishop).
If consumers reject the existing life insurance products that offer a low yield, the insurance companies will be forced to offer new products that give better value to consumers, i.e. meet the benchmark of 20%. It is possible for them to achieve this goal.
You always mention that Benchmark for Deduction should not more than 20% after 25 yrs for life insurance.
Do you mind to tell me which are the insurers that meet this benchmark ?
REPLY
None of the life insurance policies in the market now meet my benchmark of 20% deduction. It is better for the consumer to buy term insurance and invest your savings in an indexed fund. The long term cost is likely to be less than the 20% deduction. Read my book on financial planning (available at www.tankinlian.com/ishop).
If consumers reject the existing life insurance products that offer a low yield, the insurance companies will be forced to offer new products that give better value to consumers, i.e. meet the benchmark of 20%. It is possible for them to achieve this goal.
How to survive the bursting of the bubble
The Asian economies are in a bubble. It will have to burst and follow the fate of Japan and America. Here are some tips on how to survive the bursting of the bubble.
www.tankinlian.com/latest.aspx
http://tankinlian.com/admin/file.aspx?id=356
Tan Kin Lian
www.tankinlian.com/latest.aspx
http://tankinlian.com/admin/file.aspx?id=356
Tan Kin Lian
Financial Planning Tool for Fresh Graduates
It is important for a fresh graduate to start financial planning with their first job. They should set aside savings for the future and invest their savings to get a good yield. They should avoid financial products that provide a poor yield. They should also take into account the effect of future inflation on their savings.
Learn about the right approach towards financial planning using the tool created by Prof. Tan Kin Lian in this website, www.easysearch.sg/life21.
Time for a new formula for property tax?
Attached please find my article published in TODAY newspaper about property tax. Just for your info.
Mr Tan - feel free to publish this in your blog if you think this is useful. There were a few comments attached to this article. see link below.
T C Thian
My comment
I agree with the views expressed by the writer. We should not expose owner occupiers from the vagaries of the rental market.
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