Hi Mr Tan
I happen to visit your blog while gathering information about investment and insurance. It's a very informative blog. You have provided us a greater insight to insurance and investment.
I am now 26 years old. I met an an agent recently with the intention to buy a whole life and Term insurance. She recommended two plans. I found the premium to be rather high and there are a lot of uncertainties with respect to the critical illness coverage. (Other details deleted)
REPLY
I usually advise people to buy Term insurance and invest the difference. You can read the following FAQs:
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/choice.html
You should avoid whole life or endowment policies, as the charges are too high and the policies give a poor return.
Saturday, February 9, 2008
Questions from a Young Person
Hi Mr. Tan,
1) I joined the workforce recently. I plan to start saving $100 a month. Can you recommend any cash value insurance, unit trust or bonds?
Reply:
It is better to buy Term insurance and to invest your savings in a diversified, low cost fund. Read this FAQ: http://www.tankinlian.com/faq/savings.html
You should avoid a cash value policy, as the cost is high and takes away too much of your savings.
2) I currently hold two life term insurance policy, i.e. the Dependent Protection policy and a Term policy bought while under National Service. Can a person claim under two or more life term insurance if a mishap occurs?
Reply:
You can claim on all of your life insurance policies, including the two Term policy that you mentioned above. Life insurance is a valued policy and is not subject to the principle of indemnity (which applies to motor and medical insurance). The principle of indemnity limit your claims to the actual expenses that you have incurred.
3) Can a person invest in shares without a stock broker?
Reply:
You have to buy shares through a stockbroker. The commission is low, i.e. 0.3% only.
1) I joined the workforce recently. I plan to start saving $100 a month. Can you recommend any cash value insurance, unit trust or bonds?
Reply:
It is better to buy Term insurance and to invest your savings in a diversified, low cost fund. Read this FAQ: http://www.tankinlian.com/faq/savings.html
You should avoid a cash value policy, as the cost is high and takes away too much of your savings.
2) I currently hold two life term insurance policy, i.e. the Dependent Protection policy and a Term policy bought while under National Service. Can a person claim under two or more life term insurance if a mishap occurs?
Reply:
You can claim on all of your life insurance policies, including the two Term policy that you mentioned above. Life insurance is a valued policy and is not subject to the principle of indemnity (which applies to motor and medical insurance). The principle of indemnity limit your claims to the actual expenses that you have incurred.
3) Can a person invest in shares without a stock broker?
Reply:
You have to buy shares through a stockbroker. The commission is low, i.e. 0.3% only.
Lost a camera in a taxi
Dear Mr. Tan,
I took a taxi to visit a pet lodging shop, on the way to the airport for an overseas holiday. I left my camera in the taxi. There are several treasured pictures of happy moments in the camera.
On my return to Singapore, I called several taxi operators to report the loss, as I forgot which taxi I took. I had to leave messages in many voice mail and speak to telephone operators who were indiffferent as they were so used to taking such calls. It was a tiring and hopeless exefcise for me.
I hope that, in the near future, there is a one-point contact number to report a loss and to receive genuine help.
REPLY
I agree that call center service is generally quiet poor in Singapore, with a few exceptions (such as NTUC Income).
I will post your experience in my blog. However, to reach out to a bigger audience, you can write to the newspapers, like Straits Times and Today, or to the Land Transport Authority. I wish you all the best in the recovery of your camera.
I took a taxi to visit a pet lodging shop, on the way to the airport for an overseas holiday. I left my camera in the taxi. There are several treasured pictures of happy moments in the camera.
On my return to Singapore, I called several taxi operators to report the loss, as I forgot which taxi I took. I had to leave messages in many voice mail and speak to telephone operators who were indiffferent as they were so used to taking such calls. It was a tiring and hopeless exefcise for me.
I hope that, in the near future, there is a one-point contact number to report a loss and to receive genuine help.
REPLY
I agree that call center service is generally quiet poor in Singapore, with a few exceptions (such as NTUC Income).
I will post your experience in my blog. However, to reach out to a bigger audience, you can write to the newspapers, like Straits Times and Today, or to the Land Transport Authority. I wish you all the best in the recovery of your camera.
Low cost index funds
Hi, Mr. Tan
I lament the fact that Singaporeans lack access to really low-cost funds like Vanguard's. Currently, for index fund fans, we only can buy the Infinity series and those cross-listed ETFs on the SGX. Do you know if Vanguard has any plans in the near time to market their products in Singapore?
REPLY
I am not aware of any plans by Vanguard to introduce low cost indexed funds directly in Singapore. They probably find the market to be too small. I hope that other fund managers may start the low cost funds, within the next one or two years. This will be good for the market and for cost conscious investors.
I lament the fact that Singaporeans lack access to really low-cost funds like Vanguard's. Currently, for index fund fans, we only can buy the Infinity series and those cross-listed ETFs on the SGX. Do you know if Vanguard has any plans in the near time to market their products in Singapore?
REPLY
I am not aware of any plans by Vanguard to introduce low cost indexed funds directly in Singapore. They probably find the market to be too small. I hope that other fund managers may start the low cost funds, within the next one or two years. This will be good for the market and for cost conscious investors.
Decline in US Dollar
Hi Mr Tan,
I'm a regular visitor of your blog and applaud your ongoing efforts on educating people on the benefits of index/passively-managed funds and Term insurance.
I read that only USD-denominated investments primarily vested in US assets are affected by the declining USD; but the impact is less so if the investments are not in US assets. Is this true please?
Reply: Many of the US companies have global operation. When the USD declines, their income from global operations, when translated back into USD, is higher. This compensates for the decline in USD, to a certain extent.
If the company have only US operations, the decline in USD may help to make foreign imports less competitive. But, the overall impact on the US operations, due to a decline in USD, is likely to be negative.
I'm a regular visitor of your blog and applaud your ongoing efforts on educating people on the benefits of index/passively-managed funds and Term insurance.
I read that only USD-denominated investments primarily vested in US assets are affected by the declining USD; but the impact is less so if the investments are not in US assets. Is this true please?
Reply: Many of the US companies have global operation. When the USD declines, their income from global operations, when translated back into USD, is higher. This compensates for the decline in USD, to a certain extent.
If the company have only US operations, the decline in USD may help to make foreign imports less competitive. But, the overall impact on the US operations, due to a decline in USD, is likely to be negative.
Economics Joke: Recession and depression
What is the difference between Recession and Depression?
Recession - when you neighbour loses his job.
Depression - when you lose your job.
Recession - when you neighbour loses his job.
Depression - when you lose your job.
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