I have a case in which the client bought a medical insurance from the insurer directly. He went to the insurer without any financial adviser. The insurer had two products. One only covers up to age 75 while another life time cover. The life time cover is an integrated shield plan in which claims is highly efficient because it is integrated into MOH’s Mediclaim system. If I am the adviser I would … [Read more...]
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Mark-up by 15% and discount by 15%
I was handling a financial planning case. My client borrowed a home loan from a bank. One of the condition set by the bank is that the borrower must buy a mortgage insurance from the bank. The bank also offers 15% discount on the insurance premium to make the client happy. I checked the benefit illustration quoted by the bank and it was underwritten by Insurer X. I am able to quote mortgage … [Read more...]
What is Private Integrated Shield Plan and Medishield?
All Singaporeans automatically are opted into the Basic Medishield when their CPF account is first opened. This is typically when they start their first job. For those who want a better coverage, they would look at those “enhanced” shield plans called the private-integrated shield plans. Why are they called integrated shield plan? When a person buys a private shield plan, the Basic Medishield … [Read more...]
Why am I against long-term insurance contract?
“Dear Wilfred, should I cancel Product J so that I can buy Product X and Y? Regards - M” Dear M, The general rule is buy a product based on your needs. If Product J continues to serve your original needs, continue with it and do not switch it to another product as this will involve unnecessary cost. Do not worry that future products are better. It is just like buying a computer. The moment … [Read more...]
Why my medical insurance claim payout is so low?
Question: “Dear Wilfred, For the past 20 years I paid my medical insurance product called Z faithfully without any claims. Recently I was admitted to hospital at a private hospital. The bill came up to be $X,XXX.. I was dismayed that I could only claim a shocking $XXX (10 times less than the original bill). The insurer cited technicalities as an excuse. I want to complain to CASE. I am writing … [Read more...]
The Difference between value and price in financial services
Many people do not differentiate between value and price. Price is what you pay and value is what you get. For financial services, one must determine the value of an advice otherwise any price you pay (whether in fees or commissions) will be exorbitant. From my experience, most Singaporeans do not understand this and as a result make two serious mistakes: either (1) Paying for worthless advice … [Read more...]
Finexis ‘dumping’ AXA FutureProtector at $0 for first year
Some of you may have read that US often accuse China of “dumping” cheap products into the US market. Not too long ago, China also accused US of “dumping” cheap products into the China market. What is “dumping” really? The act of a company “dumping” their products is by selling their products at below cost of production. The company does this to enlarge its market share. On surface it appears to be … [Read more...]
Can an obese apply for insurance?
I have seen increasingly number of clients who are obese. ALL of them came to me for help because they were rejected when applying for insurance through other advisers. Frankly speaking, for these groups of individuals, they have been ill advised by their advisers because special consideration is required for these groups of individuals applying for insurance. What exactly constitutes obesity? The … [Read more...]
How could a financial institution pay 100% of the annual premium year in commission?
Has anyone wondered how is it that insurance company could pay more than 100% of its first year regular premium insurance in commission? I never figured it out until now. When an insurance company pays commissions, it will book this payment an amount owed to the insurance company by the policyholder. Thus, the policyholder “borrows” this amount from the insurance company in order to pay … [Read more...]
What you need to know about CPF Life Questions & Answers
I just came back from a public seminar organized by CPF Board on CPF Life held in DBS Auditorium. I attended it because I need to be familiar with the scheme in order to advice my clients. Ideally CPF Board should organize a specialized training for financial planners but I figured that they cannot be bothered because financial advisers and planners wouldn’t be interested to attend since there is … [Read more...]
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