Effect of deduction

Hi Mr Tan,
I started to read your blog recently and realised that I might be ripped off. Please see attached policy I brought 3 years ago. Am I right to say the effects of deduction is 51%? What your advice? Terminate after I can break even say after 4-5 years?

RW
REPLY
The effect of deduction at the end of 30 years is 35% compuated as follows:

• Total cash value (including non guaranteed): $53935     65%
• Effect of deduction                                      $29132     35%
• Accumulated premium                                 $83067   100%

Your policy will reach the breakeven point after 14 years (i.e. find the year where the cash value exceeds the total premium), and not 4-5 years.

To decide whether to continue or cancel the policy is a difficult question. Read my FAQ on "existing insurance policy" in my blog. Or read my book, Practical Guide on Financial Planning, available at www.easysearch.sg/ishop

Critical Illness claim

Dear Mr Tan,

I'm a middle age man who had a heart bypass operation more than 3 months ago and had incurred quite a large medical bill. Fortunately, I have always believed in the importance of insurance and had bought numerous policies for critical illness over the past 18 years.

Is it a normal practice for insurance companies to assess claims of hospitalisation and various critical illness policies jointly, withholding all payments until they have done the necessary checks with my numerous doctors. Moreover, it's more than 3 months and I haven't had any indication from the company on how I could be compensated.

It is really frustrating because they seemed to be taking their "own sweet time" in assessing my claims. First, by sending various medical questionnaires to doctors who had attended to me during my surgery/ hospitalisation, followed by my GP and now to my other specialists. What is more frustrating is that the company continues to bill me promptly for my monthly payments, including for the critical illness policies that I'm claiming against.

Would appreciate your kind advice on whether the time frame and procedure used by the company are norms when claims are involved. Thank you in advance.

REPLY
It is wrong for them to keep you in the dark for three months. They should communicate with you more actively. You can write a letter of complaint to the service quality manager and insist that they should give you a reply soon. If they do not, you can lodge a complaint with MAS for the poor quality of service and bad response.
 
OBSERVATION
Many policyholders have encountered difficulty and delay in submitting claims for critical illness. It is better to take only a modest amount of critical illness insurance and have personal savings, rather than pay a high premium for critical illness cover where you may face difficulty and uncertaintly in getting approval of the claim (for borderline cases).
 
This is explained in my book, Practical Guide on Financial Planning.

World Cup - the octopus

The octopus was correct in predicting that Spain would beat Germany in the Semi-Finals. REad this article.

Article by Lucky Tan.

My earlier prediction of a repeat of the 1974 Finals (i.e between Germany and Holland) failed to materialise. The octopus is smarter than me.

Video - Wisdom on how to live life [2]

In this video, Dr. Tommy Wong introduces and explains the concepts in his two books on "Wisdom on how to live life".

The two books can be purchased here. There is a promotion for Book 2. Book 1 has been nearly sold out.

Leaders of the Free World

Read this article.

My observation
The leaders of five countries are paid more than 10 times of the average GDP per person (i.e Kenya, Singapore, Indonesia, South Africa, Hongkong). The other countries show a ratio of less than 10 times.

Transparency and accountability

Read this article.

Major I.T. Failure

Read this article.