Sunday, February 24, 2008
Research Activities
Dr. Lee Kum Tatt’s articles on the above subject has attracted many comments. One of these comments and the reply is given in his blog www.leekumtatt.blogspot.com.
The Need to Live and Work in Harmony
In a small multiracial and multi religious country like Singapore, the need for its people to live and work harmoniously and in peace cannot be overemphasized.
Dr. & Mrs. Lee Kum Tatt (LKT) have always attracted many volunteers and others to cooperate with them throughout their lives for the benefit of Singapore.
How did they do that? Here are some accounts of what made them do what they did. Read their story in www.leekumtatt.blogspot.com
Dr. & Mrs. Lee Kum Tatt (LKT) have always attracted many volunteers and others to cooperate with them throughout their lives for the benefit of Singapore.
How did they do that? Here are some accounts of what made them do what they did. Read their story in www.leekumtatt.blogspot.com
Fair Dealing Outcomes
I will be working with Dr. Money to submit our views to this MAS consultation paper:
http://www.mas.gov.sg/news_room/press_releases/2008/MAS_seeks_comments_on_Guidelines_on_Board_and_Senior_Management_Responsibility_for_Delivering_Fair_Dealing_Outcomes_to_Consumers.html
I invite suggestions for this paper.
http://www.mas.gov.sg/news_room/press_releases/2008/MAS_seeks_comments_on_Guidelines_on_Board_and_Senior_Management_Responsibility_for_Delivering_Fair_Dealing_Outcomes_to_Consumers.html
I invite suggestions for this paper.
Bahrain
I will be travelling to Bahrain tonight and will return on Wednesday. Bahrain means "two seas" in Arabic.
Concept of term insurance
Term insurance is a contract where you pay a premium and hope that you do not have to make a claim.
For example, assume that for a group of working people, an average of 2 in 1,000 people will die each year due to accidents or illness. The participants can each contribute $200 into the pool to pay $100,000 to the family of the person who passes away.
Each person hopes that he will not be the person who makes a claim and that his contribution helps the family of the unfortunate person.
The life insurance company enters into the picture to provide a service to the 1,000 people. The company needs to have a loading of about 30% to cover the expenses and the cost of capital to support the pool (in case there is more than one claim in a certain year). Each participant pays a premium of $260. This is a fair loading to the true cost of insurance.
Many insurance companies offer other product that requires a high premium of $2,000 to $5,000 to cover $100,000, but provide some cash value (i.e. partial refund of the premium). However, most of these product are still too expensive, as a large part of the premium is used to pay commission and other expenses. The expense charges are likely to be more than the total premium payable under the term insurance.
It is better to pay a fair premium for the term insurance and hope that you do not make a claim.
For example, assume that for a group of working people, an average of 2 in 1,000 people will die each year due to accidents or illness. The participants can each contribute $200 into the pool to pay $100,000 to the family of the person who passes away.
Each person hopes that he will not be the person who makes a claim and that his contribution helps the family of the unfortunate person.
The life insurance company enters into the picture to provide a service to the 1,000 people. The company needs to have a loading of about 30% to cover the expenses and the cost of capital to support the pool (in case there is more than one claim in a certain year). Each participant pays a premium of $260. This is a fair loading to the true cost of insurance.
Many insurance companies offer other product that requires a high premium of $2,000 to $5,000 to cover $100,000, but provide some cash value (i.e. partial refund of the premium). However, most of these product are still too expensive, as a large part of the premium is used to pay commission and other expenses. The expense charges are likely to be more than the total premium payable under the term insurance.
It is better to pay a fair premium for the term insurance and hope that you do not make a claim.
Support for new life insurance company
Hi Mr. Tan,
I follow your blog and appreciate your insights into insurance and other social topics. Your recent posting on the New Life Insurance Comany set me thinking.
Why don't you start a new insurance company with investors or start a cooperative like before based on your concept stated in your blog? Actually, I was also wondering why you didn't convert INCOME to this form when you were the CEO? The concept is completely in line with INCOME being an NTUC supported cooperative!
Give them a run for their money. I for one would certainly be interested in buying policies from the company.
REPLY
I hope that your suggestion will materialise in one or two years' time. I also hope that many people, like you, will support it. I tried to introduce some elements of this strategy when I was in NTUC Income. It was stated in another posting in my blog.
I follow your blog and appreciate your insights into insurance and other social topics. Your recent posting on the New Life Insurance Comany set me thinking.
Why don't you start a new insurance company with investors or start a cooperative like before based on your concept stated in your blog? Actually, I was also wondering why you didn't convert INCOME to this form when you were the CEO? The concept is completely in line with INCOME being an NTUC supported cooperative!
Give them a run for their money. I for one would certainly be interested in buying policies from the company.
REPLY
I hope that your suggestion will materialise in one or two years' time. I also hope that many people, like you, will support it. I tried to introduce some elements of this strategy when I was in NTUC Income. It was stated in another posting in my blog.
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