Dear Mr Tan,
Recently, I wanted to buy an Aviva term insurance with coverage of $350k that covers premature death, In the application form, I was asked to list down the insurance policies that I already had. Subsequently, our insurance agent informed us that Aviva would require us to furnish them our financial information which includes submission of income tax assessment as my total coverage for all his policies is more than $1m.
I would like to enquire whether it is a norm for insurance company to request for financial information and whether I should submit to Aviva as I find that the information required is quite personal. Is it true that one could not have coverage more than $1m?
REPLY
Most insurance companies needs to do financial underwriting - where the total sum insured exceed a large sum. This is to prevent moral hazard. Different companies have different thresholds. I think that $1 million is probably a reasonable threshold to ask for this information. Although Aviva is covering for only $350k, it is still necessary for them to consider the total picture.
You can read my book, Practical Guide on Financial Planning, for tips on buying life insurance coverage.
Tuesday, April 20, 2010
Philosophy of Life - Mexican fishermen
Source: e-mail sent to me
A boat docked in a tiny Mexican fishing village.
A tourist complimented the local fishermen on the quality of their fish and asked how long it took him to catch them.
"Not very long." they answered in unison.
"Why didn't you stay out longer and catch more?"
The fishermen explained that their small catches were sufficient to meet their needs and those of their families.
"But what do you do with the rest of your time?"
"We sleep late, fish a little, play with our children, and take siestas with our wives. In the evenings, we go into the village to see our friends, have a few drinks, play the guitar, and sing a few songs. We have a full life."
The tourist interrupted, "I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat."
"And after that?"
"With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.
Instead of selling your fish to a middle man, you can then negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City , Los
Angeles , or even New York City !
From there you can direct your huge new enterprise."
"How long would that take?"
"Twenty, perhaps twenty-five years." replied the tourist.
"And after that?"
"Afterwards? Well my friend, that's when it gets really interesting, " answered the tourist, laughing. "When your business gets really big, you can start buying and selling stocks and make millions!"
"Millions? Really? And after that?" asked the fishermen..
"After that you'll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take a siesta with your wife and spend your evenings drinking and enjoying your friends."
"With all due respect sir, but that's exactly what we are doing now. So what's the point wasting twenty-five years?" asked the Mexicans.
And the moral of this story is: Know where you're going in life... you may already be there.
A boat docked in a tiny Mexican fishing village.
A tourist complimented the local fishermen on the quality of their fish and asked how long it took him to catch them.
"Not very long." they answered in unison.
"Why didn't you stay out longer and catch more?"
The fishermen explained that their small catches were sufficient to meet their needs and those of their families.
"But what do you do with the rest of your time?"
"We sleep late, fish a little, play with our children, and take siestas with our wives. In the evenings, we go into the village to see our friends, have a few drinks, play the guitar, and sing a few songs. We have a full life."
The tourist interrupted, "I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat."
"And after that?"
"With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.
Instead of selling your fish to a middle man, you can then negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City , Los
Angeles , or even New York City !
From there you can direct your huge new enterprise."
"How long would that take?"
"Twenty, perhaps twenty-five years." replied the tourist.
"And after that?"
"Afterwards? Well my friend, that's when it gets really interesting, " answered the tourist, laughing. "When your business gets really big, you can start buying and selling stocks and make millions!"
"Millions? Really? And after that?" asked the fishermen..
"After that you'll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take a siesta with your wife and spend your evenings drinking and enjoying your friends."
"With all due respect sir, but that's exactly what we are doing now. So what's the point wasting twenty-five years?" asked the Mexicans.
And the moral of this story is: Know where you're going in life... you may already be there.
Immigrants into Singapore
Read this article by Yoong Siew Wah.
My comments
The writer said that 30,000 PMETs have lost their jobs and are still unemployed. I do not know if this figure is accurate. Can someone help to find the source?
My comments
The writer said that 30,000 PMETs have lost their jobs and are still unemployed. I do not know if this figure is accurate. Can someone help to find the source?
Defamation
This cartoon would be considered as defamatory in Singapore. It is why Singaporeans learn to shut their mouth. How sad. We breed a nation of people without courage or character.
Gambling with the economy
The banks have forgotten their roles in raising funds for industry. They are now operating a large casino, taking bets. Read this story.
My comment
I sat in an interview panel of students applying for a place in a university. Half of the students wanted to work in a bank or the finance sector. This is bad for the future of the country. They want to earn big money from a business that makes its profits from gambling, and pretending to be other than gambling.
My comment
I sat in an interview panel of students applying for a place in a university. Half of the students wanted to work in a bank or the finance sector. This is bad for the future of the country. They want to earn big money from a business that makes its profits from gambling, and pretending to be other than gambling.
Monday, April 19, 2010
ATM Funds transfer in Jakarta
Several banks in Jakarta allows customers to transfer funds at ATM machines by entering the amount, recipient account number and a reference number. The ATM will show the name of the recipient for confirmation. The reference number allows the recipient to know who made the payment.
Our banks in Singapore now allow customers to transfer funds through ATM machines but does not allow a reference number to be entered. The recipient does not know who made the payment.
I hope that our banks in Singapore can provide a similar service, i.e. allow the funds to be transferred by ATM and allow a reference number to be entered. This will reduce the need for customers to send cheques for business payments. It will improve efficiency. I hope that MAS can encourage the banks to offer this service.
Tan Kin Lian
Our banks in Singapore now allow customers to transfer funds through ATM machines but does not allow a reference number to be entered. The recipient does not know who made the payment.
I hope that our banks in Singapore can provide a similar service, i.e. allow the funds to be transferred by ATM and allow a reference number to be entered. This will reduce the need for customers to send cheques for business payments. It will improve efficiency. I hope that MAS can encourage the banks to offer this service.
Tan Kin Lian
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