I received this message from my American friend,
Kin Lian: I concluded the Einstein quiz and it was great fun. I glanced at your method and picked up an important hint, so I can't say I did it all on my own - but I was headed in the right direction. I've also done your "four house" quizzes, which were quite enjoyable. I will try the fives and sixes after that. They really are a lot of fun and keep the mind spinning!!
Here is the link to the Logic Quiz (also Einstein's quiz):
http://www.tankinlian.com/logicquiz/index.html
Saturday, January 26, 2008
Insurance on a landed property
Dear Mr. Tan,
I recently bought a landed property for $1.5 million. Do I need to buy fire insurance for the entire sum? If I insure for a lower sum , can I claim up to the amount that I have insured for?
REPLY
You only need to insure for the replacement cost of the building, excluding the cost of the land. For a landed property in Singapore, the land cost is higher than the building cost, so you only need to insure for about half of the purchase price. A good rule of thumb is to multiply the build in area of your house by (say) $200 to $300 psf, depending on the quality of finishes.
If you insure for less than the replacement cost, you are considered to be the co-insurer for the uninsured portion. For example, if the replacement cost is $800,000 and you insure for only $600,000, you are deemed to be the co-insurer for the remaining $200,000, i.e. 25% of the property. In the event of a loss, you can only claim for only 75% of the loss.
Make sure that your property insurance cover fire and other perils, such as lightning, explosion, collision, windstorm, bulgary, flood and natural disasters.
I recently bought a landed property for $1.5 million. Do I need to buy fire insurance for the entire sum? If I insure for a lower sum , can I claim up to the amount that I have insured for?
REPLY
You only need to insure for the replacement cost of the building, excluding the cost of the land. For a landed property in Singapore, the land cost is higher than the building cost, so you only need to insure for about half of the purchase price. A good rule of thumb is to multiply the build in area of your house by (say) $200 to $300 psf, depending on the quality of finishes.
If you insure for less than the replacement cost, you are considered to be the co-insurer for the uninsured portion. For example, if the replacement cost is $800,000 and you insure for only $600,000, you are deemed to be the co-insurer for the remaining $200,000, i.e. 25% of the property. In the event of a loss, you can only claim for only 75% of the loss.
Make sure that your property insurance cover fire and other perils, such as lightning, explosion, collision, windstorm, bulgary, flood and natural disasters.
Ask for a clear explanation
Dear Mr. Tan,
An insurance agent from X has been urging me to buy unit trusts using the fund from my Special Account. Should I take the risk to invest $10k now that the market is low.
REPLY
I think it is the responsibility of the agent to give you the appropriate advice. Do not buy from the agent, if he is not able to give you a clear and convincing explanation.
An insurance agent from X has been urging me to buy unit trusts using the fund from my Special Account. Should I take the risk to invest $10k now that the market is low.
REPLY
I think it is the responsibility of the agent to give you the appropriate advice. Do not buy from the agent, if he is not able to give you a clear and convincing explanation.
Ask the agent for an explanation
Hi Mr Tan,
I received a quote from my agent for the following:
Hospital Surgical $305
Enhanced Incomeshield $67
Why does the Hospital Surgical cost so much more than Enhanced Incomeshield?
REPLY
I suggest that you ask the agent to explain the reason for the difference in premium. It is the agent's job. Do not be shy to ask for a clear explanation.
I received a quote from my agent for the following:
Hospital Surgical $305
Enhanced Incomeshield $67
Why does the Hospital Surgical cost so much more than Enhanced Incomeshield?
REPLY
I suggest that you ask the agent to explain the reason for the difference in premium. It is the agent's job. Do not be shy to ask for a clear explanation.
Invest in ETF
Dear Mr. Tan,
I would like to invest in ETF over a period 10 years. Is it a good time to do it now?
REPLY
I think that this is a good time, even though there is still some uncertainty. The market has corrected to a satisfactory level. If you wish to invest a large sum, break it into three portions to be invested over the next three months.
I observed that during the past few days, the spread in the STI ETF has narrowed down to less than 1%. It is a fair spread.
I would like to invest in ETF over a period 10 years. Is it a good time to do it now?
REPLY
I think that this is a good time, even though there is still some uncertainty. The market has corrected to a satisfactory level. If you wish to invest a large sum, break it into three portions to be invested over the next three months.
I observed that during the past few days, the spread in the STI ETF has narrowed down to less than 1%. It is a fair spread.
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