A policyholder upgraded into an expensive private Shield plan. He had to undergo angioplasty. The insurance company rejected this claim on the grounds for non-disclosure of high cholesterol. The policyholder was not aware that this condition was serious to be disclosed, as his doctor did not ask him to take medication. He asked the insurance company to justify their decision for non-disclosure.
After one month, the insurance company replied that the policyholder did not reply to a question that ask if he has "suffered from any other illness". They consider that the high cholesterol should be answered under this question. This was the position taken by a senior management of the company.
I consider this rejection to be unfair and advised the policyholder to lodge a complaint to CASE or FIDREC.
Thursday, July 17, 2008
Returned E-mail
I received a few questions each day from readers of my blog. I usually give a reply within the same day or the following day. Quite often, the replies are returned to me, as the server could not deliver the e-mail. It could be due to a wrong e-mail address or other reasons.
Sometimes I post the questions on my blog, after removing personal details. I hope that my person who ask the question will be able to get the reply through this channel.
Sometimes I post the questions on my blog, after removing personal details. I hope that my person who ask the question will be able to get the reply through this channel.
Keen to work for an honest insurance company
Hello Mr.Tan,
I am an avid reader of your blog and find the information you have shared with your visitors well written.
I understand from reading your blog, you are starting a new insurance company.I am keen to explore a potential employment with your new company.
Currently, I am working in the IT industry in the private sector.Although I do not have the necessary experience in the financial industry, I am keen to explore the potential and believe in serving the interests of the people.
Hi Mr.Tan,
Thank you for taking the time to go through my resume. The insurance industry is in need of honest and capable people. I will look forward to hearing from you.
I am an avid reader of your blog and find the information you have shared with your visitors well written.
I understand from reading your blog, you are starting a new insurance company.I am keen to explore a potential employment with your new company.
Currently, I am working in the IT industry in the private sector.Although I do not have the necessary experience in the financial industry, I am keen to explore the potential and believe in serving the interests of the people.
Hi Mr.Tan,
Thank you for taking the time to go through my resume. The insurance industry is in need of honest and capable people. I will look forward to hearing from you.
Impact of market drop on long term yield
If you have invested in Singapore or Global equity over the past 10 to 20 years, your average yield (computed up to 2007) would have been 8% to 9% per annum. The stockmarkets had dropped by 25% from its recent peak.
If you allow for this drop, the impact on the average yield would be 1% to 2.5%. The average yield would have dropped to 5.5% to 8% per annum. It is still an attractive yield, compared to other asset classes.
The secret: invest for the long term (10 to 20 years) and select a low cost investment fund (which takes away 1% or less). Better still, find the right time to invest - when the market has dropped 25%. This is a good time. Even if the market drops further, it will recover within the next 6 to 12 months.
If you allow for this drop, the impact on the average yield would be 1% to 2.5%. The average yield would have dropped to 5.5% to 8% per annum. It is still an attractive yield, compared to other asset classes.
The secret: invest for the long term (10 to 20 years) and select a low cost investment fund (which takes away 1% or less). Better still, find the right time to invest - when the market has dropped 25%. This is a good time. Even if the market drops further, it will recover within the next 6 to 12 months.
Paying the right price
Many people are worried about suffering from a critical illness. The insurance agent scare them about the high cost of this event.
Let us take this example. The chance of making a critical illness claim before 65 is probably 10%. The average cost of the illness is $50,000. You should pay a total premium of only $5,000 to cover this risk. Allowing for interest earned from investing your premium, your actual could be much lower, say $2,000, spread over many years.
But, you are asked to pay a premium that is 5 to 10 times of the actual cost, say $10,000 to $20,000. Why should you pay so much? Why should it be so costly?
Although some part of the premium is returned to you as a cash value, the yield is so low. It takes up to 20 years just to break even. The selling expenses and profit margin of the insurance company are too high.
It is better to buy a short term cover for critical illness and pay the right price for it. You can invest the rest of your savings in a low cost investment fund. After 20 years, your savings will be more than the sum assured. You do not need any critical illness cover at that time, as it can be paid from your savings.
Let us take this example. The chance of making a critical illness claim before 65 is probably 10%. The average cost of the illness is $50,000. You should pay a total premium of only $5,000 to cover this risk. Allowing for interest earned from investing your premium, your actual could be much lower, say $2,000, spread over many years.
But, you are asked to pay a premium that is 5 to 10 times of the actual cost, say $10,000 to $20,000. Why should you pay so much? Why should it be so costly?
Although some part of the premium is returned to you as a cash value, the yield is so low. It takes up to 20 years just to break even. The selling expenses and profit margin of the insurance company are too high.
It is better to buy a short term cover for critical illness and pay the right price for it. You can invest the rest of your savings in a low cost investment fund. After 20 years, your savings will be more than the sum assured. You do not need any critical illness cover at that time, as it can be paid from your savings.
A low cost investment fund
You are not familiar with investing your money. You appoint a trusted person to handle your money and take care of investing it.
Thirty years later, you found whom you have trusted had taken away 65% of the investment gains, and left you with only 35% of the gain. Do you feel that you have been cheated?
If you invest $200,000 over 30 years and your total gain is $600,000, your trusted friend has taken away $400,000 and leave you with a gain of only $200,000.
What type of product is this? It is a high-charge investment linked policy.
Would you prefer to have chosen a more trusted person who takes away 20% of your gains (to cover his expenses and earnings) and leave you with 80% of the gains? This person took away $120,000 and return your savings of $200,000 plus a gain of $480,000.
What type of product is this? It is a low cost investment fund.
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
Thirty years later, you found whom you have trusted had taken away 65% of the investment gains, and left you with only 35% of the gain. Do you feel that you have been cheated?
If you invest $200,000 over 30 years and your total gain is $600,000, your trusted friend has taken away $400,000 and leave you with a gain of only $200,000.
What type of product is this? It is a high-charge investment linked policy.
Would you prefer to have chosen a more trusted person who takes away 20% of your gains (to cover his expenses and earnings) and leave you with 80% of the gains? This person took away $120,000 and return your savings of $200,000 plus a gain of $480,000.
What type of product is this? It is a low cost investment fund.
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
Buy critical illness for 20 years only
Hi, Mr Tan
I'm currently 34 years old (male). I am interested to obtain a $200k coverage in critical illness for life as I'm concerned about the rising medical costs as I grow older.
My financial adviser has advised me to buy LifeSecure (Limited pay plan) that requires me to pay 20 years' of premium. Thereafter, I need not pay anymore premium.
I would be grateful if you could advise if there are term plans in the market that would provide coverage for critical illness for life. And what is the premium like?
REPLY
In my view, critical illness cover for a lifetime is very expensive and unnecessary. You should buy this cover for 20 years. If you save the remainder of the premium in a low cost investment fund, your accumulated savings can be more than the sum assured at the end of 20 years.
Read this FAQ
http://www.tankinlian.com/faq/choice.html
I'm currently 34 years old (male). I am interested to obtain a $200k coverage in critical illness for life as I'm concerned about the rising medical costs as I grow older.
My financial adviser has advised me to buy LifeSecure (Limited pay plan) that requires me to pay 20 years' of premium. Thereafter, I need not pay anymore premium.
I would be grateful if you could advise if there are term plans in the market that would provide coverage for critical illness for life. And what is the premium like?
REPLY
In my view, critical illness cover for a lifetime is very expensive and unnecessary. You should buy this cover for 20 years. If you save the remainder of the premium in a low cost investment fund, your accumulated savings can be more than the sum assured at the end of 20 years.
Read this FAQ
http://www.tankinlian.com/faq/choice.html
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