Financial planning for a young family

Hi Mr. Tan

My husband and I are doing our reviews of our profile. My financial planner recently recommends that we increase our critical illness coverage to at least $125K, via a limited pay term insurance. The two products recommended are Asia Life TM Legacy and NTUC Income Vivolife.

I have read your FAQ and I'm not sure if we should be increasing the critical illness coverage by another $100K. We have two young children, that's also the reason why we want to ensure at least we are sufficiently covered.

REPLY

Both of these products are high cost products that give poor value to the consumer. I advice people to buy a 20 year Level Term insurance, and to invest the difference in a low cost fund.

You can see some examples of the difference in the FAQs in my blog:

www.tankinlian.com/faq
http://www.tankinlian.com/faq/true.html
http://www.tankinlian.com/faq/age65.html

Joke: statements of motor accidents

> In an attempt to kill a fly, I drove into a telephone pole.

> I had been shopping for plants all day and was on my way home. As I reached an intersection a hedge sprang up, obscuring my vision and I did not see the other car.

> I had been driving for forty years when I fell asleep at the wheel and had an accident.

Claim ratios on motor insurance

Are you paying the right premium for your motor insurance? Dr. Money analyses some claim ratios of insurance companies in Singapore:

http://newpaper.asia1.com.sg/columnists/story/0,4136,170194,00.html

http://www.tankinlian.com/drmoney/