Is Singapore over-populated with foreigners?

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There is no denying that every 1st world country needs foreigners to supplement its citizens to help drive its economy. BUT, is Singapore over-doing it?

	Population	Citizen	Non-citizen
Norway (2008)	4,799,300	93.7%	6.3%
Finland (2008)	5,326,314	97.3%	2.7%
Singapore (2006)	4,017,733	74.0%	26.0%
Singapore (2008)	4,839,400	65.4%	34.6%

 

Unfair treatment of policyholders

I have received many requests from policyholders seeking advice on the problems that they encountered with their insurance company and what they can do. They are caused by unfair administrative requirements or commercial decisions taken by the insurance company. 

My general impression is that the policyholders have been badly treated by the insurance company and have been made to lose money as a result of the unfair treatment.  

I advise them to lodge a complaint with FIDREC. The website is www.fidrec.com.sg. If they need advice on how to lodge a complaint and is willing to pay $500 for the assistance, I can recommend someone to handle it for them. If they know how to handle the complaint on their own, they can save on this cost.

I am very sad to see so many consumers being badly treated by the financial institution. The situation seems to be getting worse in recent years. I hope that the Monetary Authority of Singapore will carry out an investigation into the practices of these financial institutions. 

Tan Kin Lian

Surrender of AIA poilcy

Dear Mr Tan,
I have a AIA financial guardian policy purchased in 1990. My premiums are paid annually all these years. Last year, I decided to surrender the policy. I sent the form through the mail, as the former insurance agent has long left the company.

Two months later, I received a letter from AIA informing me that the unpaid premium has been advanced as a policy loan. The customer service hotline told me that I needed to put up a Request to change the payment of the premium to quarterly mode so that they can refund me on pro-rated basis of the APL amount.

Please advise me what action I can take against AIA if they still insist that they did not have the change of request form and refuse to refund me the pro-rated amount of the loan outstanding that they have deducted.

REPLY
It is not fair for the insurance company to impose administrative barriers that will cause you to lose money. You can lodge a complaint with FIDREC. See www.fidrec.com.sg.

Worried about AIA's future

Dear Mr Tan,
With the current news about AIG I would greatly appreciate your advice on whether I should continue to pay my insurance for Basic Life and Financial Guardian policy with AIA which is due to mature in March 2046.

Would you pay the premium if you were me? Does MAS guarantee any payment for insured products? The policy has been in force for more than 10 years.

REPLY
I suggest that you ask for information about the cash value now and in 5 years time. You can compare the premiums that you will pay for the next 5 years. You can decide whether to continue with the policy. Read my FAQ.

Regarding the security of AIA, you do not need to be concerned about it. AIA policyholders are covered under a separate insurance fund in Singapore. It is also protected by the policyholder protection fund.

You can search my blog for the past articles on this matter. Search "AIA" and see if you can find any of the articles.

Financial Guardian - a difficult decision

Dear Mr. Tan,
I purchased a life policy known as 'Financial Guardian' from AIA in 1993. My understanding from my insurance agent then was that the policy has the concept of 'critical year' where the policy will be 'self paying' from the critical year onwards, and this critical year is around the 13th year after the start date of the policy.

Recently, I received a package from AIA which listed two options which I have to choose one of them. It seems that the accumulated dividend is not sufficient to fund future premium payments after the critical year.

Option 1 is for me to continue paying the premiums. Along with this option, I have to declare that "I understand that dividends and the critical year are not guaranteed and there is both upside and downside potential depending very much on the investment experience of my policy. However after due consideration, I elect to contimue paying the premiums."

Option 2 is to stop paying the premiums. For this option, I have to agree that "I understand that accumulated dividends and interest earned will be used to fund future premium payments for my policy in accordance with Option 2 "Premium Reduction" of the Dividend Options as provided for in the policy contract.

I also understand that once/if accumulated dividends and interest are exhausted, I will have to:
* restart paying my premiums; or
* convert my policy to Reduced Paid Up status; or
* take a loan advanced against the cash values of my policy for payment of premiums for my policy.

I understand that interest at such rate as may from time to time be stipulated by AIA will also be charged on this loan. I also understand this loan will be offset against any benefits paid from my policy."

For Option 2, it also mentioned that any supplementary benefits attached to it will be terminated when my policy is converted to a paid up policy.

Could you please advise on which is the better option to choose?

For each of these options, could you please highlight what are the disadvantages/pitfalls that I should consider before making my decision?

What does it mean by my supplementary benefits would be terminated when my policy is converted to a paid up policy for Option 2? Is supplementary benefits referring to the riders?

With AIG going thru' financial crisis and requiring bail-out in the USA, is it advisable for me to choose Option 1, ie to continue paying the premiums? Or should I elect for Option 2 now and then wait and see how AIG/AIA rides out the current financial crisis?

Looking forward to hear from you. Any advice that you could provide in this area, would be very much appreciated.

REPLY
Please get advice from the AIA agent or their company. You have to decide based on your needs.

Here are some general remarks. It is better to take option 1 and continue paying the premium. Under option 2, you are probably charged a high interest rate (perhaps 6% ore more) for the loan that is taken to pay the premium. Why pay a high interest rate on the premium loan?

I think that AIA should be quite safe, as it has a separate life inurance fund protected under Singapore law. It should be sheltered from the problem of AIG.

Critical year offer - seek advice from CASE

Hi
15 years ago, my father bought me an AIA insurance with critical year feature.

Now, AIA has mailed me to choose 2 options - 1) continue premium 2) pay from dividends till zero then start cash payment ago. Alternative is 3)support program, but no explanation whatsoever 4) adjudication.

If I don't choose, it will be taken as I were to accept AIA position. I am confused which is the better option. I was hoping for someone to initiate class action, but till now none forthcoming. I would like your advice on this.

REPLY
I suggest that you consult the Consumer Association of Singapore, CASE.  They have handled many of these cases i n the past.

Wrong advice about bonuses

Hi Mr. Tan
I was misled into buying insurance for all these years, thinking that the lump-sum amount paid to insurance will be like fixed deposit, and that once bonuses are declared, the surrender value in the benefit illustration shown will be guaranteed.

I did ask the agent about the guaranteed and non-guaranteed part but the answer was to look at the surrender value shown in the BIPS, which she claimed will be payable to me on surrender.

I have now found out that the terminal bonus and future reversionary bonuses are not guaranteed, which was not advised to me. Please advise me if I got a case against them.

REPLY
It is the duty of the agent to advise you correctly. If you were mis-informed, you should take the following steps:

a) Lodge a complaint to the management of the insurance company, giving facts about the mis-representation by the agent

b) If the insurance company does not give you a satisfactory solution, you can lodge a complaint to FIDREC. Details are in www.fidrec.com.sg. If you need legal or other advise, you should be willing to pay $500 for someone to advice you. I will not be able to look into your complaint, as it takes a lot of my time.

Party Whip in Parliament

Mr. Tan Kin Lian

Can you write a simple an article on how the PARTY WHIP works in parliament voting. I am interested and puzzled. My understanding is that all PAP MP must vote according to party line, regardless the MP’s constituencies view or the MP’s personal view on the subject being put to vote.

My simple understanding is as follows:

[1] MP is the representative of his constituencies. His vote speaks for the people who vote for him. We can see in US or UK that senators or MP would not vote simply it is party line. They vote in accordance to their constituency. For example, I could be a right-winged conservative, but my constituency is gay by large majority. When I am called to vote, I have to respect my constituencies’ wishes. If I don’t subscribe to this “democratic process” then I have to quit as MP or go elsewhere and win others vote to be an MP.

[2] The vote count is a statistical and historical record of the decision making process. The ratio of the majority will be a precious guide to how policy is implemented and how future decision making would to be made. For example, if a bill is passed with large majority then we know it is with the people, and it can be implemented with higher conviction and pace. However, if a bill is passed with slim majority, it would have to be executed with great compassion, care, circumspect, gentleness etc, because there is still a large minority who think otherwise.

[3] I think it is inconsistent when a person debate against a bill, and voted for it eventually. I find it hard to understand and reconcile. For example, if a MP were to speak against building of Casino, he has to vote against, when the vote is being called.

Can you write something to educate me, because I find that Singaporeans need to know more about how it works and the principal behind this policy.

CASHEW NUT

REPLY (revised)
You are right about the practice in Singapore and in the USA. In Singapoer, the MP has to vote according to the party line (unless the whip is lifted - which is seldom allowed). In the US, the Congressman votes according to his personal conscience (usually guided by the views of his constituents) and is not bound to vote according to the Party line. 

However, apart from Singapore, I know that the whip is also practiced in the UK. In this system, the concept is that the people vote for the policies of the party in power. The MPs are obliged to vote for the policies of the ruling party, as decided by the top leadership. This is to prevent a MP changing party and toppling the Government. In some countries, this is considered to be necessary to prevent a MP being bought over by money politics.

In my view, the US system is better. It ensures that the laws in the country better reflect the wishes and aspirations of the population. It also encourages greater transparency and discussion on the issues affecting the future of the country. It allows the citizens to be better engaged.