Friday, June 29, 2007

Buying Life Insurance - Factors To Consider

Hi folks

Do remember, apart from really financial constraints, you must not forget about these factors :-

1. Health

2. Occupation and your hobbies

3. Cost - premiums increase the longer you delay

Whatever life insurance you buy now, rather that later, will be bought at a "discount" so to speak.... because the higher premium you "pay" [set aside] later is not just for one year... but for every year thereafter !!!

So, why procrastinate. In your own interest act now !! Drop me a note if I can be of service to you.

Thursday, June 28, 2007

Have You Heard This Story

There is a legend of three horsemen crossing the desert at night.

Out of the darkness came a voice commanding them to dismount and fill their pockets with pebbles.

After they had obeyed and remounted, the voice declared - "Tomorrow at sun-up you will be both glad and sad"

When dawn came, they reached into their pockets and discovered not pebbles, but diamonds.

Then they were both glad and sad - glad they had taken as much as they had; sad they had not taken more !

The moral of the story : And so it is with life insurance!!

Wednesday, June 27, 2007

There are some rich people who feel they have no need to buy life insurance

Yes, I ever come across prospects who are well off who confided with me that they have no need to buy life insurance.

Well, I can say one likely reason is perhaps they feel they have set aside a large enough asset base to sustain their family after they are gone.

This may be a fact, but to me it is a dangerous assumption. While the estate may contain an asset base that is large enough, there may not be adequate cash around to meet immediate needs for example to main an accustomed standard of living or to pay astronomical medical bills and other unforeseen last expenses. The result may be a forced sale of valuable assets accumulated over the years by the deceased.

Adequate life insurance provides the necessary cash to tie the family over this critical period thus preventing assets from being liquidated at the wrong time. It may even prevent the forced disposal of assets that the deceased had no intention of selling.

Even if sufficient cash is around now, there is no guaranteed there will be enough at the time of the breadwinner's departure.

Only life insurance can give your loved ones a CASH GUARANTEE at your exit. Do you agree?

Monday, June 25, 2007

Why Is There A Common Belief That Other Types Of Investment Are Better Than Life Insurance

Yes, I often hear people say "better to invest in other types of investment rather that in life insurance"

Well, to begin with, the word "better" is subjective in so far as investment is concern. If you can guarantee that you are going to live a long time, then perhaps life insurance does not look as attractive or lucrative as other forms of investment.

What if you had died yesterday after contributing the premiums for just a month? Obviously, in such a situation, no other investment can match life insurance, isn't?

Most people tend to perceive and judge the quality of an investment based solely on the rate of return - especially when it comes to an investment they disfavour like life insurance. They discount the fact that the object of investing also affects the quality of the investment.

It is a known fact, the primary function of Life Insurance is financial protection in times of greatest need; that is when a person dies or becomes permanently disabled. In this respect, life insurance reigns supreme as an investment product.

Moreover, you are only setting aside a small portion of your money in life insurance. The major portions are already in other forms of investment. Why then do you need to argue on this small portion of your investment?

So, you should give financial protection your top priority before you talk about other forms of investment. Invest with peace of mind make sure that your family's financial needs are taken care of first.

Wednesday, June 20, 2007

The Lazy Way To Save More Money For Your Old Age

Hi folks

Do you

** pay taxes?
** want to reduce your tax burden?
** increase the yield on your savings?
** accumulate more funds for a comfortable retirement?

If your answer is "YES" to one of the above, then invest using this vehicle viz. Supplementary Retirement Scheme [SRS in short].


SRS was introduced by the Government on 1 April 20001.

According to the Ministry of Finance’s statistic, the number of tax-payers who participated in the SRS shot up from 11,890 [in 2001] to 31,413 as at end Dec 2005. An increase in 264%. The number of taxpayers who opted to transfer their SRS savings to growing their money in surance portfolio also saw an increase from 28% [in 2001] to 39% in Dec 2005.

The SRS is part of the Singapore government’s multi-pronged strategy to address the financial needs of a greying population, which were highlighted in the Report of the Inter-Ministerial Committee (IMC) on the Ageing Population, released in November 1999.

The SRS complements the Central Provident Fund (CPF). CPF savings are meant to provide for housing and medical needs and for basic living needs after retirement.

Unlike the CPF scheme, participation in SRS is voluntary. Participants can contribute a varying amount to SRS (subject to a cap) at their own discretion. The contributions may be used to purchase various investment instruments. All Singaporeans, Singapore Permanent Residents (SPRs) and foreigners who

• are at least 21 years old;
• are not undischarged bankrupts; and
• are not of unsound mind.
are eligible to open SRS account.

With the SRS, the government hopes to encourage Singaporeans to save more for their old age, by means of voluntary contributions to their SRS accounts.

The SRS offers attractive tax benefits :

•contributions to SRS are eligible for tax relief,
•investment returns are accumulated tax-free(with the exception of
Singapore dividends from which tax is deducted or deductible by the
payer company under section 44 of the Income Tax Act)
.and only 50% of the withdrawals from SRS are taxable at retirement.

With more CPF cuts and lower caps and particularly if you are utilizing your CPF saving for other purposes currently, you may find that you may end up with little money in your CPF account for you to enjoy upon your retirement.

SRS is one option that you should seriously consider now.

Foreigners working or doing business here in Singapore and who are looking to reduce their tax burden can also consider the SRS scheme as well.

If you are one of the current 800,000 plus tax payers who wants to know more about SRS scheme works and how it can benefit you financially, you are welcome to contact me. I shall be more than happy to walk through with you on the tax benefits etc that you can get from SRS.

Tuesday, June 19, 2007

Why Do Most People Avoid Life Insurance Agents?

Last Sunday I went for a brisk walking session organised by my Resident's Committee. I striked up a conversatin with a few folks and when they asked me what do I do for a living I naturally said I'm an Life Insurance Agent. As expected, they avoided talking to me immediately.

Question is why do most people tend to avoid or dislike life insurance agents?

There could be many reasons for this.

One obvious one is that life insurance is a difficult product to sell, and because of this fact, many agents applied too much pressure in order to get their sales. Since nobody likes to be pressured, these actions irritate them and caused them to disfavour life insurance agents.

The result of this sad and silly prejudice against agents is that many families are left financially unprotected.

It is important for people to wisely separate their dislike for agents, if any, from their need for life insurance coverage to protect their loved ones. After all, like any other good profession, there are both bad and good practitioners.

Whatever it is, I feel that a prospect only need to exercise his wisdom to choose a good one to serve him.

Tuesday, June 12, 2007

NTUC INCOME's Core Value

Folks in case you do not know what does INCOME mean. Here is the answer:--

Immediate - prompt response and service

No Hassle - transact in a simple manner convenient to customers

Considerate - helpful and show respect to customers

Open - honest and sincere towards customers

Magnanimous - fair to customers and generous in contributing
towards the community

Excellence - excel, innovate and improve continuously

Friday, June 8, 2007

Increase in GST of 7%

As you may be aware, it was announced by the Inland Revenue Authority of Singapore [IRAS] the Goods & Services Tax [GST in short] will be increased from 5% to 7% with effect from 1 July 2007.

Under the IRAS's guideline, an additional 2% GST will be charged for all invoices that remain outstanding as at 1 July 2007.

The GST of 7% will apply to General and Health Insurance products. It will NOT apply to Life Insurance products.

NTUC INCOME's policyholders who have outstanding premiums due [health & general insurances] and have not settled yet are therefore advised to settle by 30 Jun 2007.

Tuesday, June 5, 2007

How to save for your child's tertiary education?

Hi folks

I was away attending to some seminars over a couple of days and thus you don't get to hear from me for the past few days. Here I'm back again.

Today, I will briefly touched on how to save money for your child's tertiary education needs.

Many parents wonder what they should to do to save for their child's future education. Here we can take a look at two popular options:-

**an education policy from an insurance company and
**a more direct investment, in a well-designed unit trust [or an investment-linked] portfolio.

Let's see the difference"

Education Policy
---------------------

An education policy is usually a combination of a growth policy and life/illness coverage. The main benefit is that the policy provides an investment vehicle - your premiums go mostly towards an investment account that will return say 4.5% - 5.5% p.a. typically with a guarantee of say 2.0 - 2.25% pa.

Another benefit is that in the event of death or permanent disability of the parent, the future premium may be waived, or parents can buy an option to waive premiums upon diagnosis of major illnesses in themselves or their children. These policies can be bought from all major insurance companies.

Unit trust [or investment-linked] portfolio
----------------------------------------------------

Another approach is to build a fairly aggressive investment portfolio, suitable for a 20 year time frame. One portfolio could be a combination of funds [like the NTUC INCOME's combined funds]. This kind of portfolio would be expected to return an attractive return, taking into account the fee charged.

Which is best?
------------------

Many people would instinctively pick an insurance policy on the assumption that it's the "safest option". But the difference in returns and expected value after 20 years can be quite dramatic, and the safest route may be to go for a direct investment - because the downside is comparable to other options yet the upside is large. Indeed insurance policies may have a very low guranteed return - a fact which is often overlooked. In insurance jargon: "the maturity amount is projected based on current bonuses that may be increased or reduced in future".

For this reason we think most parents should seriously look at unit trust [or investment-linked] portfolio. If they do consider an education policy, they must read the small print carefully.

You can make a comparison yourself i.e. putting the same amount of money in your bank savings account vs an education policy vs an unit trust[or investment-linked portfolio], you can see that latter is still the best option to consider.

In fact, young families will usually be better off with basic term life insurance to cover against the unforeseen - the susbstantially lower premiums enable them to buy better protection against loss of income or other disaster. And then remaining funds can be placed in other vehicles [e.g. investment-linked policy] that are likely to generate returns better than life insurance contracts.

This way they and their children can enjoy the best of specialists - protection from insurance companies, and investment returns from fund managers.

I would be more than happy to share with parents who are contemplating setting up an education fund for their child's future study needs.

Do feel free to drop me a note for a discussion - absolutely under no obligation!