A, an American living in Singapore, recently bought some properties and was looking for insurance. He turned to his friend, B, who works in the insurance industry, to help him out.
B recommended that A purchases term insurance, either level term or mortgage protection, as the insurance need was to just cover off the mortgages. B drafted a letter up on behalf of A, requesting term quotes to the top 10 insurance companies in Singapore.
A received quotes for unit linked investment plans from all the companies, and some companies stated they didn't sell term, or that they didn't know what "level term" was. A & B decided to follow up with company X, as they had the cheapest quote so far. They were told that "X doesn't offer level term", to which B replied "Yes you do, it's called x-Term". They requested that a senior agent come out and meet with them.
At the meeting, the agent pulled out his laptop and started to show ILP's. Again, A said that he is looking for term. The agent replied that term was not worth his time to do. This would have been the easiest sale in the world, as A was ready to sign on the dotted line right there, no hard sale to do, just fill out the paper work.
They also requested a meeting with company Y. They never showed up, and when they called, they said sorry and never arranged another meeting.
So, A & B decided to get some quotes from the USA, since he's American. The term quotes coming in from the USA, where about 50% cheaper than the quotes from Singapore. Even taking into account that they were for preferred underwriting, and underwriting tests are cheaper in the US, this is a large markup in Singapore. Particularly since Singapore mortality is better than the US!
So the morale of the tale, even if you want to buy term, it is very difficult to do.
Thursday, August 7, 2008
Joke: Hazel Wood
After going into Hazel Wood with his girl friend, Fred wrote below the sign which said "Hazel Wood" the words "But Janice wouldn't".
Auction Rate Securities
Citigroup sold auction rate securities to retail investors on the representation that these securities are "cash alternatives". It implies that they are liquid and can be converted to cash at any time. During the credit crisis, there is no liquidity for these securities.
The District Attorney office of New York took up a case on behalf of the retail investors. It negotiated a settlement that require Citigroup to buy back the securities from the retail investors and compensate those who have suffered a loss. Citigroup had to buy back USD $8 billion of these securities.
I wish that our similar action is taken in Singapore on behalf of retail investors that were misled into investing in structured financial products and life insurance products that offer poor value to the investors.
The District Attorney office of New York took up a case on behalf of the retail investors. It negotiated a settlement that require Citigroup to buy back the securities from the retail investors and compensate those who have suffered a loss. Citigroup had to buy back USD $8 billion of these securities.
I wish that our similar action is taken in Singapore on behalf of retail investors that were misled into investing in structured financial products and life insurance products that offer poor value to the investors.
Benefit illustration
Hi Mr. Tan,
I am 20 this year. I had just graduated from diploma and had just starting my first career. Being the breadwinner of the house, I think having a insurance/policy will be safer. I am currently thinking which type of policy should I take. However I am kind of confused. After reading through your website and blog, I get exposed to more information which I neglect previously. However there are still several question which i will like to clarify with you.
Is cash value equivalent to surrender value Where can I fine the cash value in my benefit illustration ? What is gross yield and net yield? Where can I find the gross yield and net yield in my benefit illustration ?
REPLY
Cash value is the same as surrender value. The gross yield is the yield that the insurance company expects to earn by investing your premium. This yield is not guaranteed. The net yield is the yield that you can earn (not guaranteed) after the charges have been deducted by the insurance company.
You should ask the insurance agent to show you these figures in the benefit illustration.
Due to the high charges, a life insurance policy gives a poor yield. It is better to buy a Term insurance and invest the difference in a low cost fund. This is explained in this FAQ:
http://www.tankinlian.com/faq/fptips.html
I am 20 this year. I had just graduated from diploma and had just starting my first career. Being the breadwinner of the house, I think having a insurance/policy will be safer. I am currently thinking which type of policy should I take. However I am kind of confused. After reading through your website and blog, I get exposed to more information which I neglect previously. However there are still several question which i will like to clarify with you.
Is cash value equivalent to surrender value Where can I fine the cash value in my benefit illustration ? What is gross yield and net yield? Where can I find the gross yield and net yield in my benefit illustration ?
REPLY
Cash value is the same as surrender value. The gross yield is the yield that the insurance company expects to earn by investing your premium. This yield is not guaranteed. The net yield is the yield that you can earn (not guaranteed) after the charges have been deducted by the insurance company.
You should ask the insurance agent to show you these figures in the benefit illustration.
Due to the high charges, a life insurance policy gives a poor yield. It is better to buy a Term insurance and invest the difference in a low cost fund. This is explained in this FAQ:
http://www.tankinlian.com/faq/fptips.html
Insurance for a child
Dear Mr. Tan
I would appreciate if you could advise me on what insurance package/company should I take up for my new born son. I'm overwhelmed by the different insurance packages and companies in the market.
REPLY
Read this FAQ
http://www.tankinlian.com/faq/childlife.html
I would appreciate if you could advise me on what insurance package/company should I take up for my new born son. I'm overwhelmed by the different insurance packages and companies in the market.
REPLY
Read this FAQ
http://www.tankinlian.com/faq/childlife.html
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