Hi Mr Tan,
I would like to seek your advice. Based on your years of experience in this industry, do you know of any insurance policy I can purchase for my twins who were born at 25 weeks?
If there is, how can I benefit from such policy as the parent? (e.g. When they turn 21 years old, I can also take it out and gain from the lower premiums paid for kids policies etc.)
They are both 1.5 years old now and growing healthy like any other kids (my younger kid has a certain malfunction but was operated successfully and growing like a normal child now)
I really don't understand why X rejected our application...(but one of my HR colleagues under the Benefits Section asked me to check out Y for congenital coverage).
Looking forward to your advice.
REPLY
I hope that this FAQ will help you to make the best decision for your twins:
http://www.tankinlian.com/faq/child.html
You can buy Medishield (from CPF) to cover their hospital expenses.
Tuesday, May 6, 2008
Reasonable Expectation
Mr. Tan,
What do you mean by policyholder's "reasonable expectation"?
REPLY
In a participating life insurance policy, the contract states that a bonus will be added each year based on the profit for the year and distributed in a manner that is approved by the board of directors, acting on the advice of the actuary.
To prevent abuses, the Monetary Authority of Singapore (MAS) has issued guidelines to require the insurance company to declare its bonuses fairly and equitably, to meet the "reasonable expectation" of the policyholder.
Take the example of a policy with a benefit illustration stating that a bonus of $X will be added yearly to the policy, subject to the investment yield at 5.25%.
If the insurance company earns much more than 5.25%, the policyholders would expect the bonuses to be increased. It would not be fair for the directors to reduce the bonus. The policyholder can object to this reduction as a breach of "reasonable expectation".
If the yield is lower, the policyholder will have to accept that the bonus will be reduced, but they can insist that the reduction has to be applied fairly across all the policies. The insurance company cannot cut the bonus for some policies and increase the bonus for other policies.
What do you mean by policyholder's "reasonable expectation"?
REPLY
In a participating life insurance policy, the contract states that a bonus will be added each year based on the profit for the year and distributed in a manner that is approved by the board of directors, acting on the advice of the actuary.
To prevent abuses, the Monetary Authority of Singapore (MAS) has issued guidelines to require the insurance company to declare its bonuses fairly and equitably, to meet the "reasonable expectation" of the policyholder.
Take the example of a policy with a benefit illustration stating that a bonus of $X will be added yearly to the policy, subject to the investment yield at 5.25%.
If the insurance company earns much more than 5.25%, the policyholders would expect the bonuses to be increased. It would not be fair for the directors to reduce the bonus. The policyholder can object to this reduction as a breach of "reasonable expectation".
If the yield is lower, the policyholder will have to accept that the bonus will be reduced, but they can insist that the reduction has to be applied fairly across all the policies. The insurance company cannot cut the bonus for some policies and increase the bonus for other policies.
Transfer back to retirement account before 62
A policyholder told me that he decided to withdraw from a life annuity before payments starts at 62. He was surprised to learn the following:
> The cash value for the life annuity gave quite an attractive return from the past 6 years
> The CPF was willing to accept the cash value back into the retirement account
> The retiree was able to get a deferment bonus of $1,600 (not sure about the exact amount) a year X 3 years for deferring the withdrawal to 65 years.
This turn out to be a good deal!
> The cash value for the life annuity gave quite an attractive return from the past 6 years
> The CPF was willing to accept the cash value back into the retirement account
> The retiree was able to get a deferment bonus of $1,600 (not sure about the exact amount) a year X 3 years for deferring the withdrawal to 65 years.
This turn out to be a good deal!
Nearly 3,000 visits on Tues 6 May
The average visitors to my blog used to be 850 per day. The vistiors jumped to 2335 on Mon 5 May and to 2929 on Tues 6 May. This is three times of the average visitors. It seems that the bonus cut of NTUC Income is bringing many people to my blog.
In 3 weeks time, after the annual general meeting of NTUC Income, I expect my blog to revert to the quieter days.
In 3 weeks time, after the annual general meeting of NTUC Income, I expect my blog to revert to the quieter days.
Get several quote on your motor insurance
Dear Tan Kin Lian,
Which company insure your car? Kindly advise me. I am thinking of getting out of X. I read in your blog that a policyholder had her car insurance premium increased despite many years of accidents free. She now registered with somewhere else and the premium is cheaper.
REPLY
I suggest that you call a few insurance companies and check the premium. Their particulars are shown here:
http://www.tankinlian.com/faq/motord.html
In my case, I am now insured with Y and their service is good.
Which company insure your car? Kindly advise me. I am thinking of getting out of X. I read in your blog that a policyholder had her car insurance premium increased despite many years of accidents free. She now registered with somewhere else and the premium is cheaper.
REPLY
I suggest that you call a few insurance companies and check the premium. Their particulars are shown here:
http://www.tankinlian.com/faq/motord.html
In my case, I am now insured with Y and their service is good.
Buy a life annuity
Dear Mr. Tan,
I am 55 year old. Should I put my $100,000 saving in the FD or buy an annuity. Kindly advice me which is investment can give me a higher return.
REPLY
I suggest that you buy a life annuity. Read this FAQ:
http://www.tankinlian.com/faq/life.html
If you are interested, I will ask X to advise you.
I am 55 year old. Should I put my $100,000 saving in the FD or buy an annuity. Kindly advice me which is investment can give me a higher return.
REPLY
I suggest that you buy a life annuity. Read this FAQ:
http://www.tankinlian.com/faq/life.html
If you are interested, I will ask X to advise you.
Write to ask the CEO of NTUC Income
Dear Mr. Tan,
My husband and I just invested $X and $Y in the Growth Plan in Feb 2008. We just received a letter from NTUC telling us that Annual Bonuses will be cut. We don't really understand what this means for us. Could you please advise us if the Growth Plan is still a good investment or not?
REPLY
I suggest that you write to the CEO of NTUC Income. I think that he will give you an explanation and advice. Wish you all the best.
My husband and I just invested $X and $Y in the Growth Plan in Feb 2008. We just received a letter from NTUC telling us that Annual Bonuses will be cut. We don't really understand what this means for us. Could you please advise us if the Growth Plan is still a good investment or not?
We feel a little short-changed and puzzled by the change, especially as we have only just bought this Plan. If NTUC had plans to revise the Annual Bonus – and I use the word "revise" euphemistically – then they should not have continued to sell the Growth Plan to customers under the guise of the old Plan and rates.
We are very confused by all this and don't know if we have made a stupid choice. What should we do now? We are risk averse and usually just put our savings in bank accounts and fixed deposits.REPLY
I suggest that you write to the CEO of NTUC Income. I think that he will give you an explanation and advice. Wish you all the best.
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