Dear Mr Tan,
I need to seek your advice. I am covered under a group policy basic term insurance. I want to increase my cover to $150K and take up a new critical illness term plan (until age 65). I declare that I am suffering from xxxx. The underwriter quoted a monthly premium of $x for the basic term and $y for the critical illness term. In your professional opinion, do you think that I should take up the new coverage? Is the premium fair?
REPLY
I suggest that you ask three insurance company to quote the premium on your coverage. You can make a better decision after you obtain the three quotes. Read this FAQ:
http://www.tankinlian.com/faq/termd.html
You can get the benchmark premium rate from this FAQ:
http://www.tankinlian.com/faq/benchmark.html
Thursday, March 13, 2008
Keep invested in CPF
Hi Sir,
I chance upon your site and need your advice regarding my investment. By end of March, the Government will be freezing our CPF account.
I am thinking of investing my ordinary account and special account into bonds (50%) and in AIA Growth Fund (50%). Is it wise?
My friends told me that the economy is not doing well, so better not invest in anything. I really don't know. This is the first time I am investing. Really hope to hear from you soon. I need to reply my agent by 15th March.
REPLY
It is better to keep your money in the CPF to earn the guaranteed interest rate of 2.5% for ordinary account and 4% for special account plus the bonus of 1%. If you do not need the money in the ordinary account, you can transfer it to the special account to earn a higher rate of interest.
Do not invest in high cost products sold by an insurance agent, as it gives you a poor return, after deducting the charges. High quality bonds do not give you an adequate yield. Low quality bonds give a higher yield, but is risky.
I chance upon your site and need your advice regarding my investment. By end of March, the Government will be freezing our CPF account.
I am thinking of investing my ordinary account and special account into bonds (50%) and in AIA Growth Fund (50%). Is it wise?
My friends told me that the economy is not doing well, so better not invest in anything. I really don't know. This is the first time I am investing. Really hope to hear from you soon. I need to reply my agent by 15th March.
REPLY
It is better to keep your money in the CPF to earn the guaranteed interest rate of 2.5% for ordinary account and 4% for special account plus the bonus of 1%. If you do not need the money in the ordinary account, you can transfer it to the special account to earn a higher rate of interest.
Do not invest in high cost products sold by an insurance agent, as it gives you a poor return, after deducting the charges. High quality bonds do not give you an adequate yield. Low quality bonds give a higher yield, but is risky.
Tolerance for mistakes
Hi Mr Tan,
I am an avid follower of your blog. I do notice that the entries you have written often draw responses, positive and negative, from the public. There were times when people wrote really nasty things about Income whenever Income makes mistakes here and there.
However, I hardly hear about the public complimenting about the extra mile that Income (or other insurance companies) do for their policy holders. Have we turned into a society where we respond with over-the-top reactions to mistakes, be it minor or major? Have we turned into a society where we cannot make room for mistakes? Must everything go strictly to what has been planned ahead? :(
Pardon me for sounding stereotypical. However, I do feel that society as a whole is becoming less tolerant towards people making mistakes. Patience seems to be in short supply these days and tempers flare too easily. It 'beggars belief' that society is opening up as a whole to welcome people from other parts of the world when minds are shrinking in size.
I apologise for this long email. However, I am not sure if I am the only one behaving in this way. Is it too much to ask for a little patience?
REPLY
Thank you for your useful observations. I agree with your thoughts.
I am an avid follower of your blog. I do notice that the entries you have written often draw responses, positive and negative, from the public. There were times when people wrote really nasty things about Income whenever Income makes mistakes here and there.
However, I hardly hear about the public complimenting about the extra mile that Income (or other insurance companies) do for their policy holders. Have we turned into a society where we respond with over-the-top reactions to mistakes, be it minor or major? Have we turned into a society where we cannot make room for mistakes? Must everything go strictly to what has been planned ahead? :(
Pardon me for sounding stereotypical. However, I do feel that society as a whole is becoming less tolerant towards people making mistakes. Patience seems to be in short supply these days and tempers flare too easily. It 'beggars belief' that society is opening up as a whole to welcome people from other parts of the world when minds are shrinking in size.
I apologise for this long email. However, I am not sure if I am the only one behaving in this way. Is it too much to ask for a little patience?
REPLY
Thank you for your useful observations. I agree with your thoughts.
Top up spouse account to qualify for CPF Life annuity
Hi Mr Tan I am a housewife. I need your advice on the following options:
Option A - Ask my husband to top up my cpf account minimum sum to be eligible for the CPF lifelong annuity. For $50,000 I can get an estimated $438 monthly at age 65 (under R65).
The CPF website stated that this is an estimation and the payout amount can be changed over times. However once opt in, we cannot opt out should the payout amount changes. This statement bothers me. I feel that the payout amount is not guaranteed but act as a trap to get people to join in by inflating the payout amount to make it attractive.
Option B - Use the cash $50,000 to buy into annuity with NTUC at age 50 and starts the payout at age 65 for lifetime. How much will I get lifelong monthly payout commencing at age 65?
REPLY:
It is better to buy the CPF Life annuity. The CPF uses a good interest rate to calculate the payouts. They also have low expense charge, and are able to give an attractive return to the annuitant.
The CPF is not able to guarantee the payout, as it depends on future interest rate. I believe that it will continue to be better than market rate. You do not have to worry that the payout is not guaranteed.
Your first prioirty is to buy the CPF Life annuity. If you still have additional savings, you can use it to buy the life annuity from NTUC Income. You can ask them to quote you the payout and compare it with the payouts offered by other insurance companies for a similar plan.
Option A - Ask my husband to top up my cpf account minimum sum to be eligible for the CPF lifelong annuity. For $50,000 I can get an estimated $438 monthly at age 65 (under R65).
The CPF website stated that this is an estimation and the payout amount can be changed over times. However once opt in, we cannot opt out should the payout amount changes. This statement bothers me. I feel that the payout amount is not guaranteed but act as a trap to get people to join in by inflating the payout amount to make it attractive.
Option B - Use the cash $50,000 to buy into annuity with NTUC at age 50 and starts the payout at age 65 for lifetime. How much will I get lifelong monthly payout commencing at age 65?
REPLY:
It is better to buy the CPF Life annuity. The CPF uses a good interest rate to calculate the payouts. They also have low expense charge, and are able to give an attractive return to the annuitant.
The CPF is not able to guarantee the payout, as it depends on future interest rate. I believe that it will continue to be better than market rate. You do not have to worry that the payout is not guaranteed.
Your first prioirty is to buy the CPF Life annuity. If you still have additional savings, you can use it to buy the life annuity from NTUC Income. You can ask them to quote you the payout and compare it with the payouts offered by other insurance companies for a similar plan.
Give time to sort out the problem
Dear Mr. Tan
I log onto your blog everyday and learned a lot from your messages. Did you read the forum message "Delay after delay in Incomeshield claim" in ST on 12.03.08 and the online comments from readers?
I think I am not the only one to miss the good old days when you were the CEO of Income. Many of us bought policies because we had faith in you. It is possible that staff makes mistakes from time to time, but it is not fair if the customers have no recourse when their feedback is repeatedly ignored. Do you have any advice for people in similar situations?
REPLY
I believe that NTUC Income will find out the source of this problem, and will rectify it. Give them some time to sort it out.
I log onto your blog everyday and learned a lot from your messages. Did you read the forum message "Delay after delay in Incomeshield claim" in ST on 12.03.08 and the online comments from readers?
I think I am not the only one to miss the good old days when you were the CEO of Income. Many of us bought policies because we had faith in you. It is possible that staff makes mistakes from time to time, but it is not fair if the customers have no recourse when their feedback is repeatedly ignored. Do you have any advice for people in similar situations?
REPLY
I believe that NTUC Income will find out the source of this problem, and will rectify it. Give them some time to sort it out.
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