Coverage for medical expenses

Hi Mr Tan, 
 I have a private shield plan with rider under NTUC . At the same time I also have H&S plan - GE's Premier Helath Plan. I realize that there are areas that are overlap. However, both my agents from GE and NTUC cannot tell me what are the differences of these 2 plans, except that one is paid throught CPF and the other by cash. I would like to discontinue the GE plan but am afraid to do so. Can you kindly advise? 

REPLY
If you are covered with Shield and rider, there is no need for you to have the GE plan. You can stop it. It is wasteful to pay premium for a H&S plan which duplicates most of the coverage, so a large part of the premium is wasted.

Read the FAQ in my webiste, www.tankinlian.com (Ask Mr .Tan) or get my book, Practical Guide on Financial planning, available from www.tankinlian.com/ishop.

Challenges for the Young

How do young people perceive the future in Singapore? This report, based on a survey of young people, presents a worrisome picture.

Latest in TKL website

I will be adding articles and FAQs to my website quite regularly. You can go to www.tankinlian.com, click on Latest tab, and view these latest additions. If you wish to look for a FAQ for a certain topic, e.g. "critical illness", you can go to Information tab and use the Search tab.

Here is the direct link to the Latest tab: http://www.tankinlian.com/Latest.aspx

Exclusion of critical illness

Mr Tan 
I intend to purchase a level term insurance for S$400,000. I am 40 years old and have diabetes type II but well under controlled till now. 


My agent informed me that due to my medical condition, he can propose a term insurance but without critical illness coverage. I would like to know whether this is fair for them to exclude Critical illness out of term insurance. 


REPLY
You should ask them to explain what is the "exclusion of critical illness coverage". Does it mean that the term insurance does not pay for death by heart attack, cancer? It does not make sense to have a term insurance policy with these exclusions. Due to your medical condition, it may be necessary for you to pay a loading, i.e. a higher premium rate, but you should get the full cover in the event of death during the term.

Read the FAQs in www.tankinlian.com (Ask Mr. Tan)

Investment linked policy (ILP)

Hi Mr Tan,
I bought a ILP for my son 7 years ago and have been paying $100 a month for this policy. I received a semi-annual statement recently and was surprised to see a loss on my investment (total invested $6,777, current cash value was $6,380). 
I went to their website to see the performance of their other funds but to my dismay, it only showed the last 20 pricing records for the individual funds, and no information for earlier years. Please advise if I should just terminate this ILP, as I don't have much confidence in this anymore. 


REPLY
Most ILPs do take about 10 years to break even. They give poor value for money, due to the high distribution cost and effect of deduction. I would advise people to avoid buying these high cost products.

For a policyholder who has already invested in the product, it is usually better to keep the policy, provided that the investment can yield a reasonable return over the next few years. This would depends on the charges.

I suggest that you write to the insurance company and ask them to show you the following for of the past years:

• what was the yield of the fund for each year
• what was the reduction in the yield due to the charges taken from your savings
• what are the projected charges for each of the next 5 years. If the charges are less than 2% a year, it should be all right to keep the policy.

Generally, a ILP is quite difficult for the policyholder to understand the charges. It is best to avoid investing in this type of policy.

Read Practical Guide on Financial Planning

Chrome browser

I like to use the Chrome browser to handle my G Mail and Blogger as they are all provided by Google. However, I find one feature of Chrome to be quite irritating. Whenever I download a document, Chrome  insist on saving a copy in the Download folder before opening it. If I wish to view the same copy again, Chrome will save another copy of the document. Sometimes, I find several copies of the same document in the Download folder. Is there a way to stop the saving of the copies in the Download folder?

Flood prone Singapore

I made regular trips to Jakarta over the past three years. Whenever it rained, there would be floods in several parts of Jakarta, causing traffic congestion and extensive property damage. I was happy at that time that Singapore had been free of floods for many years.

The situation has now changed. We had three serious, embarrassing floods over the past few months. Whatever might be the cause, e.g. Marina Barrage or overbuilding, we now have to live with the prospect of a flood-prone or, to coin a new word, a "floody" Singapore.

It would make our life somewhat more complicated. Owners of some buildings in flood-prone areas will find that their home or car insurance policies will come with higher premium rates or "flood exclusion", i.e. damage caused by flood will not be covered. Insurance premiums will increase further for everyone, even those who live "high and dry".

On the bright side, I am confident that the people in charge can solve the problem. We do have quite bright people who can find with good solutions which are planned and executed properly. We only need the problem to be recognized and give authority to the people in charge (i.e. no pushing the buck around from one agency to another).

Tan Kin Lian