Sunday, August 9, 2009
Van for Aug 22
I need a volunteer to provide a van for transport on 22 August. Please contact me at kinlian@gmail.com.
My life insurance policies
Dear Kin Lian
I am insured with NTUC. Seriously. I am naive and ignorant, how I should address my concerns (of the poor return) to the management board? Do you still have NTUC policies?
REPLY
I had about 15 life insurance policies during my time with NTUC Income, including policies taken for my children. Many of them have matured. Some were transferred to my children.
I cancelled four whole life policies (on my life) during the past two years, due to the reduction in bonus rate and the increase in management expenses. As I am past 60, I do not need the insurance protection.
I am insured with NTUC. Seriously. I am naive and ignorant, how I should address my concerns (of the poor return) to the management board? Do you still have NTUC policies?
REPLY
I had about 15 life insurance policies during my time with NTUC Income, including policies taken for my children. Many of them have matured. Some were transferred to my children.
I cancelled four whole life policies (on my life) during the past two years, due to the reduction in bonus rate and the increase in management expenses. As I am past 60, I do not need the insurance protection.
I have only a few investment linked policies left. I shall cancel them at the right time.
Insufficient savings? No wonder with poor insurance returns
Published in Forum Page, Straits Times on Aug 10, 2009
Many life insurance policies taken today require more than 15 years to 'break even'. This is the point where the cash value of the policy is more than the premiums that were paid over the years.
During this period, the insurance company must have earned more than 40 per cent on the premiums that have been invested. As an actuary, I know that the real cost of providing life insurance cover is about one-quarter of the gain. The remaining three-quarters are used to pay the agent's commission and expenses, or retained as orphaned money, as pointed out by Mr Haverkamp.
If the orphaned money is distributed to the policyholder, as suggested by Mr Haverkamp, the return would at least have been slightly better.
In recent years, consumers have been given a poor deal on their long-term savings in life insurance policies. A careful study of the Benefit Illustration will probably bring out this point. But the Benefit Illustration is difficult for consumers to understand and needs to be explained by an insurance adviser, who tends to skim over the negative points.
This is similar to the situation with the prospectuses issued for Minibonds and other credit-linked notes.
If consumers are given a poor return on their long-term savings in life insurance policies and other financial products, and in many cases they actually get a negative return, is it a wonder why many Singaporeans do not have sufficient savings for retirement after many years of hard work, thrift and savings?
I call on life insurance companies and financial institutions to reconsider their roles and responsibilities to provide a fair deal to consumers, as they strive to make profits for their shareholders. I hope the Government will also review this unsatisfactory situation in Singapore.
Tan Kin Lian
I AGREE with the views expressed by Mr Larry Haverkamp in his letter last Thursday, 'Policyholders underpaid?'.
Many life insurance policies taken today require more than 15 years to 'break even'. This is the point where the cash value of the policy is more than the premiums that were paid over the years.
During this period, the insurance company must have earned more than 40 per cent on the premiums that have been invested. As an actuary, I know that the real cost of providing life insurance cover is about one-quarter of the gain. The remaining three-quarters are used to pay the agent's commission and expenses, or retained as orphaned money, as pointed out by Mr Haverkamp.
If the orphaned money is distributed to the policyholder, as suggested by Mr Haverkamp, the return would at least have been slightly better.
In recent years, consumers have been given a poor deal on their long-term savings in life insurance policies. A careful study of the Benefit Illustration will probably bring out this point. But the Benefit Illustration is difficult for consumers to understand and needs to be explained by an insurance adviser, who tends to skim over the negative points.
This is similar to the situation with the prospectuses issued for Minibonds and other credit-linked notes.
If consumers are given a poor return on their long-term savings in life insurance policies and other financial products, and in many cases they actually get a negative return, is it a wonder why many Singaporeans do not have sufficient savings for retirement after many years of hard work, thrift and savings?
I call on life insurance companies and financial institutions to reconsider their roles and responsibilities to provide a fair deal to consumers, as they strive to make profits for their shareholders. I hope the Government will also review this unsatisfactory situation in Singapore.
Tan Kin Lian
Harrassing the wrong people
On my return from Batam, I had to go through security check at Harbour Front. My bag had to be screened. The mobile phone has to be placed in a separate tray.
On passing through the metal detector, there was a beep. So, I had to be screened. I had to empty the wallet, keys, pen from my pockets. Many questions were asked. I only had two hands, so it was quite difficult to be holding the passport, wallet, keys and other items.
After being passed as "not carrying weapons", I collected my luggage and left. Ten minutes later, I realised that my mobile phone was missing. I had to go back to recover it.
I hope that our security officers realise that a traveller has only two hands, and that they had to take care of many things. It is not necessary to give so much hassle to the travellers, who are returning home.
The security officers are only carrying out their duty, as written by the top leaders. The top leaders (i.e. government minters and civil servants) are given VIP treatment, so they do not have to go through the hassle that lesser mortals had to endure.
I know that it is important to have security measures to ensure that terrorist do not smuggle weapons into Singapore. Are we harrassing the wrong people in the process?
In most other countries, the security officers exercise their discretion and do not follow the rules by the book. If someone (like me) does not look like a terrorist, they do not subject this person to the same detailed check.
But, in Singapore, everything goes by the book and is implemented blindly. It requires our top leaders to experience the inconvenience personally, before they change the rules. And the top leaders are trapped in their ivory towers, surrounded by security guards, and receive ground reports from underlings who only convey what they wish to hear. (Sigh). This is Singapore!
Tan Kin Lian
On passing through the metal detector, there was a beep. So, I had to be screened. I had to empty the wallet, keys, pen from my pockets. Many questions were asked. I only had two hands, so it was quite difficult to be holding the passport, wallet, keys and other items.
After being passed as "not carrying weapons", I collected my luggage and left. Ten minutes later, I realised that my mobile phone was missing. I had to go back to recover it.
I hope that our security officers realise that a traveller has only two hands, and that they had to take care of many things. It is not necessary to give so much hassle to the travellers, who are returning home.
The security officers are only carrying out their duty, as written by the top leaders. The top leaders (i.e. government minters and civil servants) are given VIP treatment, so they do not have to go through the hassle that lesser mortals had to endure.
I know that it is important to have security measures to ensure that terrorist do not smuggle weapons into Singapore. Are we harrassing the wrong people in the process?
In most other countries, the security officers exercise their discretion and do not follow the rules by the book. If someone (like me) does not look like a terrorist, they do not subject this person to the same detailed check.
But, in Singapore, everything goes by the book and is implemented blindly. It requires our top leaders to experience the inconvenience personally, before they change the rules. And the top leaders are trapped in their ivory towers, surrounded by security guards, and receive ground reports from underlings who only convey what they wish to hear. (Sigh). This is Singapore!
Tan Kin Lian
Investor to share experience on BBC
BBC is doing a series of global reports on the anniversary of the Lehman collapse. They are to do an "authored report", ie someone affected by the collapse in some way, talking about their experiences.
If you are interested to be interviewed by BBC, please send an email to kinlian@gmail.com. You can request the BBC not to use your real name, but to write about your experience.
Apart from talking about how you were misled into the investment, you can also talk about the months of agony earlier with the financial institution, FIDREC and MAS.
If you are interested to be interviewed by BBC, please send an email to kinlian@gmail.com. You can request the BBC not to use your real name, but to write about your experience.
Apart from talking about how you were misled into the investment, you can also talk about the months of agony earlier with the financial institution, FIDREC and MAS.
Sale of my books
An unemployed person posted a question - can he sell my books and earn a commission. If you are interested, send an email to kinlian@gmail.com.
It is quite easy to sell my books. I sold 10 copies during my trip to Batam, just by showing people how to solve the shapes in the Shape Quiz book.
It is quite easy to sell my books. I sold 10 copies during my trip to Batam, just by showing people how to solve the shapes in the Shape Quiz book.
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