Mr Tan
Is there any need to buy a limited critical illness plan - which the premium is paid for 20 years only but protected for life.
The cost is quite high, as it includes guaranteed bonus. I am not able to buy a plan without the guaranteed bonus.
The agent told me to avoid buying i-term plan, as it does not have any return.
Please advise.
REPLY:
You should compare the following options:
1. critical illness plan to cover a lifetime, with premium payable for 20 years
2. 20 year term (including critical illness), invest the difference in a well diversified fund
You can read this FAQ.
At the end of 20 years, your accumulated savings (under option 2) should be more than sufficient to cover your financial needs (should you suffer a critical illness). You get a better return under this option, as the cost is low (compared to a limited payment plan).
You can talk to an insurance adviser or visit the business center.
Monday, July 23, 2007
Rider for Hospital Expenses
Mr Tan
I purchased a financial guardian plan, some 17 years ago. It includes a rider to cover the following:
* $65 a day for bed
* $1,200 to cover surgical
* $300 for other expenses
* $20,000 to cover total disability and a few critical illness
These covers extend up to 65 only.
What can I do with it now since it cannot meet present hospital expenses? Should I buy a enhanced Incomeshield and drop the current plan?
REPLY
You should talk to an adviser or visit the business center of NTUC Income.
Your current rider provides cover up to age 65 only. It does not meet your needs beyond age 65. It is better for you to switch to a plan that offers lifetime coverage.
The premium rate for a rider is usually quite high. You may find it to be more affordable to buy a separate policy. But, as your are paying a level premium under the rider, it may be better for you to continue it (depending on the premium rate).
I purchased a financial guardian plan, some 17 years ago. It includes a rider to cover the following:
* $65 a day for bed
* $1,200 to cover surgical
* $300 for other expenses
* $20,000 to cover total disability and a few critical illness
These covers extend up to 65 only.
What can I do with it now since it cannot meet present hospital expenses? Should I buy a enhanced Incomeshield and drop the current plan?
REPLY
You should talk to an adviser or visit the business center of NTUC Income.
Your current rider provides cover up to age 65 only. It does not meet your needs beyond age 65. It is better for you to switch to a plan that offers lifetime coverage.
The premium rate for a rider is usually quite high. You may find it to be more affordable to buy a separate policy. But, as your are paying a level premium under the rider, it may be better for you to continue it (depending on the premium rate).
Quote of the Day
In April Dr. Lee Kum Tatt posted an article in his block on “How to be Creative”.
Someone took out a statement from this article and classified it “Quote of the Day”. The quote is "The greatness of a person can only emerge when he has shown his ability to create, passion to pursue, courage to commit and capability to achieve”.
He also made some comments. Here is Dr. Lee’s reply in his blog.
Someone took out a statement from this article and classified it “Quote of the Day”. The quote is "The greatness of a person can only emerge when he has shown his ability to create, passion to pursue, courage to commit and capability to achieve”.
He also made some comments. Here is Dr. Lee’s reply in his blog.
Tom.com
During the heydays of the dotcom, Li Ka Shing floated a company in Hong Kong called Tom.com.
I always wondered how he chose this name? My guess is that "Tom" is short for "Tomorrow".
I just searched this website. It is in Chinese, and is quite active. It appears to be a portal about China.
I always wondered how he chose this name? My guess is that "Tom" is short for "Tomorrow".
I just searched this website. It is in Chinese, and is quite active. It appears to be a portal about China.
Poor return for 5 years
Dear Mr Tan,
Five years ago I placed $10,000 in the Fix-It Fund. On maturity, I received an interest of $433. I was disapointed.
To date this is the third investment made through a bank. This was the best returns so far. The other 2 funds performed much worse.
REPLY:
You received a return of 4.3% for 5 years on the Fix-It Fund. This is 0.8% per year.
If you have invested in secure government bonds for 5 years, you would have obtained about 15% for 5 years. The Fix-It Fund probably gave a poorer return, due to the high expenses (which are taken away from your return).
The other two funds performed worst, for the same reason.
Five years ago I placed $10,000 in the Fix-It Fund. On maturity, I received an interest of $433. I was disapointed.
To date this is the third investment made through a bank. This was the best returns so far. The other 2 funds performed much worse.
REPLY:
You received a return of 4.3% for 5 years on the Fix-It Fund. This is 0.8% per year.
If you have invested in secure government bonds for 5 years, you would have obtained about 15% for 5 years. The Fix-It Fund probably gave a poorer return, due to the high expenses (which are taken away from your return).
The other two funds performed worst, for the same reason.
Diversify your investments
Dear Mr Tan,
You have always advocated investing in a low cost widely diversified fund. My son and I have invested more than $X of our CPF funds in the Growth Fund and Balanced Fund managed by a local insurance company.
I favour this fund as it provides steady returns. Even if the market dips, I notice it bounces back again. I am of the opinion that it can safely let my money grow over the long term.
I wanted to invest another $X of my cash in these funds. My friend commented that with a new CEO, perhaps it is better to diversify and not "put all my eggs in one basket".
This falls in line with one of Dr Money's comments in his articles on the CPF website. What is your opinion?
REPLY:
It is a good idea to diversify your investment. Perhaps, you can spread your total investments into two or three financial institutions.
In my case, I have more than 50% of my investments with NTUC Income. I will try to diversify the invetments over the next few months.
If you wish to invest more of your savings in the stockmarket, take note that the stockmarket is now at a high level. I have decided to put my new savings in the money market and to wait for a better time to invest in the stockmarket.
You have always advocated investing in a low cost widely diversified fund. My son and I have invested more than $X of our CPF funds in the Growth Fund and Balanced Fund managed by a local insurance company.
I favour this fund as it provides steady returns. Even if the market dips, I notice it bounces back again. I am of the opinion that it can safely let my money grow over the long term.
I wanted to invest another $X of my cash in these funds. My friend commented that with a new CEO, perhaps it is better to diversify and not "put all my eggs in one basket".
This falls in line with one of Dr Money's comments in his articles on the CPF website. What is your opinion?
REPLY:
It is a good idea to diversify your investment. Perhaps, you can spread your total investments into two or three financial institutions.
In my case, I have more than 50% of my investments with NTUC Income. I will try to diversify the invetments over the next few months.
If you wish to invest more of your savings in the stockmarket, take note that the stockmarket is now at a high level. I have decided to put my new savings in the money market and to wait for a better time to invest in the stockmarket.
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