$1,000,000 coverage for less that $100

Yes, you read right. It's $1 million dollars death coverage for less than $100, or $88 to be precise for a man who is 40 years old for a 20 years coverage. It's even cheaper than your mortgage insurance (where the sum assured is reducing each year).

Before we continue, we are talking about a "term" insurance:
Term is a type of life insurance that provides a potential death benefit for a fixed period or "term." This is commonly a flat premium for say, 5, 10, 15, 20, or 30 years. After the end of the term the policy no longer provides a death benefit
Source: https://www.investopedia.com/ask/answers/08/term-life-insurance.asp
To add, it has no cash values at the end of the term. It's just like your car or mortgage insurance or even your electronic good insurance (fridge, washing machine, etc.).

Do I need a million dollar coverage? Well it depends.

Below are 3 commonly consideration you might want to take note:

A) Current Debts (house, car, etc.)

Do you know that you can use Term insurance to replace your HDB's Home Protection Scheme (HPS)? With this Term plan also, you do need to get a new HPS when you get a new house, which is usually more expensive because the HPS is based on your current age and not the younger you whom 10 or 20 years ago took up HPS when you got your first house.

B) Family regular living expenses

You can just use your monthly expenses and multiply by the number of years you need to support your family.

E.g. A new born just join the family and assuming your monthly expenses is $2,000. So for the new born to be independent, we assume he/she will take about 25years. So we just multiply accordingly: $2,000 x 25y x 12m = $600,000.

C) Children Education

For a 3 years course in a local universities (NUS/NTU), based on inflation rate of 5%, in 20 years time, the course fee will come to about $71,000. If we add in the living expenses with an inflation of 1.6%, the grand total comes to $142k.

And if we are talking about overseas education, like Australia, the total cost will come to $440k

Still unsure if you really need the $1mil coverage? Talk with your financial advisor and they are the best person to advise you.

What is Insurance?

Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. 

The above is extracted from Wikipedia. And you can easily find several other "textbook-like" variations on the definition of Insurance via the Internet search engine(s). While the meaning from multiple sources could arguably be standardised in a way or another, the diversification largely stems from one's relativity to the value(s) of such a hedging tool and/or potential loss to be covered.

Consumerism is a social and economic order and ideology that encourages the acquisition of goods and services in ever-increasing amounts. 

In my opinion, one of the main deterrents to transferring contingent loss to Insurance is a comprehensive set of normative beliefs that doing so would inevitably incur high costs. And such valuations is especially subjective while the benefits that the product/service could bring about, is intangible.

Insurance, in its native origins, is simply a plain vanilla pooling-of-risk instrument. However, this instrument has been evolving and undergone a series of transformation into sophisticated insurance products that you can find today. It could be bundled with investment/savings; includes extensive coverage via means of a multiplier till certain age; offers a wider spectrum of coverage to include for eg., early-stage Dread Diseases; etc. This would concomitantly explain why the cost of insurance has moved northwards with the evolution of it. Having said that, the plain vanilla form of Insurance remains available till date. However, shoppers for insurance are increasingly spoilt (or confused) with choices. 

Hence, it remains important (if not, even more important!) to engage a trusted Advisor who champions your interest in helping you understand your options. If you ain't sure what are the qualities of a trusted Advisor, then don't stop short of contacting either one of us!

Pre-existing condition and not covered for ADL (Activities of Daily Living)?

If you don't have Eldershield nor coverage for Acitivites Daily Living, you can still be covered under Aviva which has a Guaranteed Issuance Offer (GIO) plan.

If you already have coverage for ADL, then how about simplified coverage for loss of use of one limb OR loss of sight of one eye OR loss of speech OR loss of hearing from NTUC Income which is also a GIO plan?

Advance Medical Directive (AMD)

An Advance Medical Directive (AMD) is a legal document that you sign in advance to inform the doctor treating you (in the event you become terminally ill and unconscious) that you do not want any extraordinary life-sustaining treatment to be used to prolong your life.

Making an AMD is a voluntary decision. It is entirely up to you whether you wish to make one. In fact, it is a criminal offence for any person to force you to make one against your will.

Source: MOH

The AMD must be made through a doctor (you do not need either a lawyer or legal advice to make an AMD). The doctor has the responsibility to ensure that:
1. You are not being forced into making the AMD.
2. You are not mentally disordered.
3. You understand the nature and implications of making an AMD.

You need to have two people witness you sign the AMD and they must sign the form as witnesses in your presence. One witness must be the doctor. The second witness must be 21 years or above and can be the doctor’s nurse, or any other suitable person.

If the witnesses are relatives, so long as they have no vested interests in your demise, they would be allowed to act as witness.

Since it's a requirement to get doctor to certify, it's best to do it during LPA application.

FAQ on LPA

What is the difference between a Will and a LPA (Lasting Power of Attorney)?
A Will is effective only after death. A LPA is effective when you loose mental capacity e.g. when one is in coma or dementia.

What happens if I do not have a LPA?
Your family members will have to apply to Court under the Mental Capacity Act, to apply for someone to take charge of your personal welfare and property & affairs matters. Somewhat similar to someone without a Will, it's costly and time-consuming and you do not get to choose who's best to take care for you.

Can I assign my spouse to take care of my healthcare whereas my son to take care of my financial matters?
Yes. Basically LPA allows you to assign the following decision making:
1) personal welfare (which may include health care) and/or
2) property and affairs (including financial matters).
3) both personal welfare and property and affairs
So it's best to decide who's best to manage your healthcare and financial matter.

What happen if the assigned is not taking care of my affairs irresponsibly?
The Office of Public Guardian has the power to oversees the assigned do their job responsibly. If they don't they are held responsible and in worst case be fine and imprisoned.

What happens if I recover my mental capacity?
The LPA will not be effective. It's only effective when you are certified to be incapable of managing your own affairs.

Will my LPA be revoked or cancelled in any condition?
Yes, if the person you assigned decline to take the job, passes away, bankrupt or he himself lost mental capacity.
If the assigned is your spouse and there is a divorce.


Other than LPA, anything else I need to consider?
LPA is effective only when you lost your mental capacity. Upon death, LPA is of no use. Will is the only effective tool to help you.

What is Lasting Power of Attorney (LPA)

The LPA is a legal document which allows a person who is at least 21 years of age ('donor'), to voluntarily appoint one or more persons ('donee(s)') to make decisions and act on his behalf should he lose mental capacity one day. A donee can be appointed to act in the two broad areas of personal welfare and property & affairs matters.

Benefits of an LPA

• Early preparations to protect your interests should one become vulnerable one day. 
• Enables you to make a personal, considered choice of a trusted proxy decision maker, who is reliable and competent to act in his or her best interests.
• Alleviates the stress and difficulties faced by loved ones who need to apply for a Deputyship order, if you lose mental capacity without an LPA in place.

Source: Office of the Public Guardian

Do you know that the application is free at this moment:

(fee of $75 waived for another 2 years until 31 August 2020)

However applicants are required to pay a fee to engage an LPA Certificate Issuer to witness and certify their application. We last checked it was only $60 from a a medical practitioner accredited by the Public Guardian.
Please note that LPA application must be within 6 months from the date the certificate issuer signs on the LPA.
Click here to find out more who can certify your LPA.

What can I use SRS for? Not just leave it in the bank until I retire?

Now that I have save $1,756 on my tax for YA2018 with SRS (Supplementary Retirement Scheme), next year I got additional money to spend/ save/ invest. (Click here for the previous article on Tax Savings details).

Then how about the $15,300 I left it in the SRS account?

Well, with SRS you can do alot of things as it's as good as cash (in terms of investment wise).

1) Option 1

Well I have already saved & earned 11.5% with the tax savings, I'll just let it grow 0.5% yearly until I retire.
=> Leave it in the bank and don't need to do anything.

2) Option 2

I am a long term investor (or speculator, I wonder?) and would like to try my hands on current market high as there's still 30% of chances going up.

=> Link your SRS with your Stocks account, and you can start speculating.. I mean investing.

3) Option 3

I am a bit risk averse but I believe in stocks as it has always been and historically shown to beat the inflation. But which stocks to buy?

=> Invest in equities or balanced funds instead. E.g. of balanced fund "First State Bridge"

4) Option 4

I don't trust stocks and shares. I only believe in Corporate Bonds issued by reputable companies and Statutory Bonds issued by Singapore government. But I don't have $250,000 to buy them.

=> Invest in money market or bond funds instead. E.g. "United SGD Fund CL A ACC SGD"

Getting confused and not sure which option to choose? Perhaps it is good to know your own-self first before making any decision that you might regret. Check out this month article too on "Understand Yourself before making that Investment Decision"

5) Option 5

What? Still got Option 5?? I start seeing seeing stars already. I just want a stable retirement and it's best if I can use my SRS to pay myself when I'm retired or no longer working. Got such thing?

=> Fortunately yes! There are insurers who allows you to use your SRS to pay for their retirement plans. In fact nowadays almost all retail life insurers have at least 1 retirement plan in the market.

Check out below the available plans that you can use your SRS:

6) Option **

Now I really see stars and totally lost. I think I will go for Option 1, easiest. Let it grow for 20years from $30k to $33k and earn $3,000, guaranteed. Not bad as I don't even need to lift my fingers.

=> How about earning a guaranteed $7,200 and another ~$16,000 for your play cheque? In addition, you have extra protection for death & terminal illness for the "just in case". But this you need to lift your finger and just give us a call and we will advise you based on your risk appetite. Oh.. not only lifting of fingers but need to use your mouth to talk a bit also ya :)

Understand Yourself before making that Investment Decision

When it comes to investing, a lot of people tend to forget one thing - they aren't absolutely sure what kind/type of investor they are.

Regardless of the varying investment philosophies that we advocate to, we are all synchronised with the identical set of emotions that investment subscribe us into - that is, Fear & Greed.

What separates us (Investor), in my opinion, is the management of this set of emotions. The quality of management arguably determines/affects the timing that an Investor enters (buy) and/or exits (sell) the market.


"Be greedy when everyone is fearful, be fearful when everyone is greedy" - Warren Buffet

I am sure most of us (if not all) could fully appreciate this quote, albeit inculcating this into our daily investment decisions is possibly, but, another different story. From his quote, I also like to think that Mr. Buffet agrees that emotions is inevitably involved when it comes to investment.

If you haven't realised that I had already attempted to highlight this through the header of my sharing, I would like to emphasise here that you should start asking yourself: What type of investor are you?

Do you prefer income over capital appreciation?
What is your investment time frame?
What is your expected return?
How would you anticipate your course of action to be when your portfolio dip by 10/20/30%?

The above is only a sample set of questions, when answered, aid to deduce the type of investor in you. It is not limited to these examples, and definitely not meant to be exhaustive as well. But to a certain extent, it would probably give you a better evaluation after these questions have been answered. And before that, your expectation and emotions could arguably be misguided.

So in order to avoid making "emotional" mistakes in investing, I suggest doing this:

1. Be Diversified - Own asset classes that have very minimal correlation;
2. Adopt asset allocation in accordance/alignment to your risk profile;
3. Allocate "Reserves" to "capitalise" on market sale, ie. enter when prices are lower;
4. Determine your investment time horizon. If it is to be 10 years, whatever happens this week is just "noise";
5. Work with a Financial Advisor to assist you in monitoring your portfolio and offer you advice.

Whilst the above list is not meant to be exhaustive, I think it still serves as a rather decent start. But if that still poses a challenge to your time, then at least have a trusted advisor!

TST: Wealth Management: Views on Financial Planning and Money Management

Below is the screen capture from the Sunday Times earlier this week:

You can notice that for Retirement Planning, more than 70% wants their retirement fund to be enough to maintain current lifestyle and their family is well protected and provided for when they retire.

And the Top 4 topics where investors need more information is:
1) Writing a Will
2) Lasting Power of Attorney (LPA)
3) Estate Planning
4) Succession Planning

For Writing a Will with 78% requiring more information, we have ample information about it in this blog, check this out especially:
1) Does everybody have a Will?
2) FAQ on Will
3) CheatSheet : Estate Distribution

As for the LPA, we will be sharing what is LPA and the FAQs about LPA next month.
If you need any clarification, feel free to contact us.

FAQ on Will

Below are some of the FAQs that we received from our friends and clients. If you have any queries, please feel free to let us know or just drop us a comment below.

Can I make my own will?
Yes, you can. But it's not recommend. It's best left to the professional.
E.g. if you owned a Lexus and would like to pass it to your son when you passes on. In your Will, you indicated "to give Lexus car to my son". If you have changed your car to BMW, upon your demise, your executor will need to sell your BMW and purchase a Lexus for your son.
Being smart alec, you rephrase it to "to give a car to my son". But then if you have sold your car and/or bought a yacht, then the executor will need to find monies or sell your yacht to buy a car for your son.

What can I put into the Will?
Basically you can put all your estate in your Will except those governed by the law. Refer to the Cheat Sheet here for quick reference on what can and cannot be distributed by law.

How about estate that is overseas?
Estate is divided into 2 types: Movable and Immovable Estate.
For movable estate such as overseas bank accounts, investment, etc. it can be distributed via your Will locally here.
For immovable estate such as overseas properties, land title, etc. it's best to do up a will at the respective country. Immovable estate are usually governed by the respective country's laws.

Is it possible that my Will be revoked?
Yes, when you marry or re-marry unless it's mentioned in the Will.

How about if I'm divorced?
No, divorce does not revoke your Will. So do update your Will promptly after change in marital status.
To add-on, without a Will, even after you file for divorce, the Intestate Succession Act (where you spouse is entitled to HALF of ALL your properties) continues to apply until the date of Final Judgment.
And your spouse also have the FIRST RIGHT to apply for the letter of the administration from the court to deal with all your estate!

Is the Will best kept in a safe place e.g. Bank Safe?
Yes, it should be kept in a safe place but it's a no no to keep in the Bank Safe. Because no one other than yourself has the access to the Bank Safe. However you can consider keeping it in a "fire proof" safe deposit box at home.
Since the Executor needs it to carry out your Will, it would make sense that the Will should be made known where it is especially for the Executor and/or Beneficiaries. If not, you can consider registering your Will location at the "Will Registry" maintained by the Public Trustee of Singapore.
If the Will cannot be found, then the estate will be distributed based on the The Intestate Succession Act.

Other than Will, anything else I need to consider?
Will is effective only upon death. If one is diagnosed with dementia, stroke or in coma, the Will will not take into effect. For these, you will need Lasting Power of Attorney (LPA) or Advanced Medical Directive (AMD) so that the decision can be assigned to someone when you are in no condition to make.

[Case Studies] No Will can cost you stamp fees and legal fees on the house

A family consists of a husband, wife and 2 young children. They live in the same HDB house with husband paying and owning the house. The wife and children are just occupier of the house.

When the husband passes on, with no Will, based on The Intestate Succession Act, the wife is entitled to 50% of the house and the 2 children, 25% each. This is entitlement and is not automatically transfer/given. The wife will need to apply to the court for letter of administration to transfer half of the flat to herself and most probably she will also wants to buy over the other half share from their young children.

This will cost the wife tens of thousands of dollars in stamp fees and legal fees for the transfer.
With a Will, the transfer costs only few hundred dollars. And more importantly the process is much faster especially during this devastating period for the family where the wife will not need go through the tedious process of applying for the letter of administration and carry out the paper works.

Note: If the HDB house is owned under "Joint Tenancy" with the wife, then the husband portion will be automatically transferred to the wife. In this case, the Will will not supersede the transfer/allocation.

Recommended Reading on Will:

• Does Everybody Have a Will?
• Cheat Sheet: Estate Distribution

Save for your Retirement, and Save on your Taxes, altogether!

As we embark on the final Quarter of 2017, we would like to suggest to our readers to review your tax obligation, and perhaps, explore some ways to optimise your tax dollars. Arguably, one of the most effective ways to do this, is via the Supplementary Retirement Scheme (SRS). Through contribution to the SRS account, the Tax-Payor adopts a "one-stone-kills-two-birds" kind of strategy and hence, enhances the effectiveness on his/her tax dollars.

SRS is part of the Singapore Government's effort to address the financial needs of our greying population. It began in 2001 and is operated by the private sector. As the name suggests, the scheme aims to supplement and/or complement the various solutions in our current CPF system, ie. CPF LIFE, Minimum Sum, & etc.

The SRS offers attractive tax benefits. Contributions to SRS are eligible for tax relief. In another words, each dollar of contribution into your SRS account reduces your chargeable income by the same value in the that particular year of contribution. You can invest the savings in your SRS account in several investment instruments. Moreover, your investment returns are accumulated tax-free and ONLY 50% of the withdrawals from SRS are taxable at retirement (this is commonly referred to as "50% tax concession"). For more information on how withdrawals will be taxed, you may like to refer to IRAS' website.

The current annual SRS contribution cap is:

(i) $15,300 for Singapore Citizens & Permanent Residents;

and,

(ii) $35,700 for Foreigners.

Although it does not require a Tax resident to be on a super pay scale to feel appropriately incentivised/motivated to introduce and infuse SRS as part of his/her retirement income solution, just in case some of you might like to study this "mathematically", we have written another article to shed some light in that perspective. And for the keen readers who are hungry for information, you can find everything you need to know about SRS here.

Putting your money away in your SRS account is one thing; the next thing that you would need to consider is how to grow the money in your SRS account. Do stay tune for our subsequent newsletter as we would like to share with you on some of these viable options available in the market currently.

Save 11.5% immediately if are earning >$96,600 per year! Save 7% if you are earning >$51,000

Have you estimated your earned income yet? Have you add in:
- 13month bonus
- Staff discount
- Allowances
Yes, above are some of the income that is earned and taxable.

If you have estimated your earned income to be >$51,000* you can consider putting it to SRS. Cause every dollar set aside will save you 7%.
E.g. If you set aside $1,000 to your SRS, you will save $70 of tax immediately. And if you set aside the SRS maximum of $15,300, you will save $1,071 of tax.

*For simplification, we use $51,000 minus CPF contribution of $10,000 and earned income rebate of $1,000 gives you a chargeable income of $40,000.
Based on IRAS, anything above $40,000 the tax rate is 7% up to $40,000.

If your estimated earning is > $96,600** then every dollar you put aside will save you a whopping 11.5%!
E.g. If you set aside $1,000 to your SRS, you will save $115 of tax.
If you set aside the SRS Maximum amount, you will save $1,756.

This is not every dollar save, every dollar earned.
This is every dollar save, a dollar and twelve cents earned!





Left Image: Get tax relief while building your nest egg
by Lorna Tan on Nov 1, 2015


**Similarly, for simplification, we use $96,600 minus CPF contribution of $15,600 ($6k x 13mth x 20%) and earned income rebate of $1,000 gives you a chargeable income of $80,000.
Based on IRAS, anything above $80,000 the tax rate is 11.5% up to $40,000.

Below is the table for tax savings based on your monthly salary with 10% of your annual income contributed to SRS:

So start saving now! If you have concern on SRS matters such as withdrawal, post your comments below or check with your financial advisor.

[Case Study]Pay $60k and receive $550 for life - A Good Deal?

Recently we received this case study using premium financing to pay for a retirement plan.

At age 40, with an initial outlay of $60,000, is able to receive a projected monthly income of $550 (for life). How this works:

Can this really works? We are a bit skeptical as it heavily depends on these 2 main conditions and variables:

1) Non-Guaranteed portion
Guaranteed amount is $275 and the loan amount is $311. So the non-guaranteed portion needs to generate minimally $36 to offset the loan totally.
Only if the insurer able to generate 4.75% return on their participating funds, then one can get the $239 extra.

2) Interest Rate
RHB interest is based on 1.8%. Currently we are at all time low interest rate environment. When interest rates go up, the loan amount will go up as well.

To us, though the retirement plan is good but the premium financing part is risky.

An Important Fundamental of Investing - Rebalancing of Portfolio

Rebalancing of portfolio is one of the fundamentals that an Investor has to carry out with discipline, in order to be successful in investing. 

Let's suppose that you have a $100,000 portfolio, made up of 2 funds at 50% allocation each. The 2 funds are of different asset classes and draws varying performances. So let us imagine this over a period of one year: the first fund, called Fund A, fetches a decent gain of 10%; And the second fund, called Fund B, only manages a return of 1%.

As a result of the above stated performances over a year, Fund A is now worth $55,000 and Fund B is now worth $50,500. The total portfolio gain is $105,500. While I can imagine most Investors would just sit on this portfolio and count on the profit, let us review the allocation weighting after a year: Now, Fund A has a weighting of 52.13%, and fund B has a weighting of 47.87%, of your portfolio (PS: Still remember what was the allocation in the beginning?).

Maybe this may not look too much of a different with how you had started with, at least not for the first year. But can you imagine if your portfolio continues to be managed unprofessionally (ie. poor discipline/awareness in rebalancing) over time, your risk and reward will become somewhat different with what you have intended.

Allow me to illustrate 3 reasons on why you have to rebalance your portfolio at least once, if not, twice a year.
Reason 1:
The first reason is what I have probably stated above. That is, as your portfolio moves, your risk and reward moves. The effect spurning off from the absence of rebalancing a portfolio for a short period of time (e.g. 1 year or less) may somewhat appear insignificant, but the failure to do so for a longer period of time would concomitantly result into a very different portfolio with how you had wanted it to be. By rebalancing the portfolio, you are making adjustment to realign with your original intention in investing into that particular portfolio.

Reason 2:
By rebalancing your portfolio, you are essentially taking profit on the funds that have made you money and putting more money on the underperforming fund (if you still believe in the thesis of investment in the first place). Such an exercise, also allows you to review all the funds that you have in your portfolio.
This is especially essentially as most people harbour a "out of sight, out of mind" mentality when it comes to investing.

Reason 3
If you and/or your advisor is/are diligent enough in rebalancing the portfolio at least once a year, your return on investment would be much smoother than otherwise. It's because each asset class carries different risk profile and return expectation. By doing the above, you are also applying Dollar-Cost-Averaging strategy on the fund that is under-performing.

I hope that you have or would have taken to heart on the above matter (in due time). If you are still not totally convinced or clear with how such an act (rebalancing) could have an effect on your portfolio, please do not hesitate to contact us.

What if your closed one is disabled but Medisave, Medishield Life support is limited?

Do you know that other than your Medisave, Medishield Life, Medifund and Eldershield, there are also other schemes that are available for disabled Singaporeans. Just to name a few:

IDAPE - Interim Disability Assistance Program for the Elderly
Monthly cash payout ($150/m or $250/m) for those who were unable to join Eldershield when it was first introduced in 2002 as they have exceeded the maximum entry age or had pre-existing disabilities
Click here for more...

PioneerDAS - Pioneer Generation Disability Scheme
Those with severe disability, payout of $100/m.
It's automatically given for pioneers who are receiving ElderShield or IDAPE payouts or already benefiting from FDWG
Click here for more...

SMF - Senior's Mobility Enabling Fund
Financial assistance for Assistive Device (e.g. wheelchair), Transport and consumable subsidies
Click here for more...


FDWG - Foreign Domestic Worker Grant
Provides a monthly cash grant of $120 for families who hired a domestic worker to care for a person with moderate to severe disability
Click here for more...

[Newsletter]Who will inherit the $3mil?

If both the husband and wife met with an accident, without a Will, how would their estate be distributed?
A : Husband's parents

B : Wife's parents
The answer is A will get $1mil and B will get $2mil

Since both died together, the older (by age and not by gender) is deemed to die first. As the Wife is younger, and by Intestate Succession Act, Husband is considered to die first.

When Husband dies, since there's no children, half will go to the parents and half to the wife. With $2mil assets, $1mil will go to his own parents and $1mil will go to his wife.

Next is Wife dies, since there's no children, and since husband is no longer around, all her assets of $2mil ($1mil from the husband whom die together and another $1mil from her own) will go to her parents.

More details here can be found in the previous article "Does everybody have a Will?"

If there's a catalyst to rekindle your insurability, would you pay for it?

Are we discussing about Science here? Absolutely not. It does not take a degree in rocket science to realise the importance and beauty of having a clean bill of health.

Insurance is an intangible commodity. 

Insurability is a priceless asset, it is non-transferrable & the loss of which, is arguably, irreversible.

So are we trying to tell a fairy tale here? Absolutely not either! It does not take anyone more than an average IQ to tell you that an immortality pill does not exist in this world, at least not for many more decades (I suppose!).

In our years of assisting clients with their insurance application, the scenario that has drawn our greatest empathy lies beneath a 'Declined' underwriting decision. Ironically, this group of applicants (being declined), whose Insurability is somewhat/somehow challenged by medical condition(s), is probably also the group who desires for, and/or needs insurance coverage.

So is there any way to manoeuvre past the underwriting process in order to be granted acceptance?

Since Aug 2007, a British insurer has provided a "catalyst" to one's insurability by introducing what the industry calls the "Moratorium Underwriting" concept here to its Shield plan (a medisave-approved medical insurance). 

The concept works by doing away with medical declarations when an applicant is eligible to elect Moratorium Underwriting option - that is, he/she is not employed in certain hazardous occupations nor has been rejected/postponed/excluded for any health and/or life insurance before, and not required to pay additional premium for his/her MediShield Life coverage. Given such an underwriting option, an eligible applicant is guaranteed with the issuance of the policy, but any pre-existing medical condition(s) is/are, but predictably, excluded.

This concept has arguably removed the biggest bugbear in insurance application and acted as a probable catalyst to rekindle one's insurability after a stipulated period of time subject to its terms & conditions. Instead of having to declare medical conditions that threaten the approval of an application, it guarantees issuance & allows an applicant of sub-standard health to be covered for medical treatment that are required not out of and/or not related to any pre-existing condition(s). And just like any great deals, where terms & conditions apply, it will also top up the deal with "an-icing-on-the-cake" feature. And in this case, it is the possibility of having a pre-existing condition included after 5 continuous years of coverage from the date of commencement of cover or the date of the last reinstatement or the date of upgrade, whichever is later, under the Policy, the insured person has not, in relation to a pre-existing condition:

- experienced symptoms; 

- sought advice or tests from a Physician, a Specialist or Alternative Medicine Provider (including check-ups for that pre existing condition);

- required and/or received treatment or medication; 

Upon fulfillment of the above status, the Pre-existing condition (other than a list of permanently-excluded conditions, e.g. cancer, heart attack) shall be covered.

I hope that after reading this, you are made aware of an option that could help someone in distress when they are in the quest of medical insurance. Don't hesitate to drop myself or Brian an email to find out more if you think this can help someone. 

CheatSheet : Estate Distribution

Before you start shooting the messenger (or rather your "Will Executor" in this case), when he/she does not follow what you wrote in your Will, first make sure what you wrote is valid.

You can easily refer to the cheat sheet below on what can be Will'ed and what can't:

Basically your estate is divided into 2 categories: Those can be distributed by Will and those by Law. Within the categories, each of them is further divided into estate that is movable (like your cash & investment) and those that is immovable (like your properties). All the different estates are listed clearly in their respective categories for your easy reference.

E.g. If you indicate your CPF monies in your Will to be given to so & so, the monies CANNOT be distributed accordingly. Because, by law, CPF monies can only be distributed using the CPF Nomination form.
So have you make your nomination yet? It's free.

[Newsletter]Who will inherit the $3mil?

If both the husband and wife met with an accident, without a Will, how would their estate be distributed?
A : Husband's parents
B : Wife's parents

1) A gets $2mil and B gets $1mil
2) A gets $3mil and B gets nothing
3) A gets nothing and B gets $3mil


Tips: Answer can be found in the previous article on "Does everybody have a Will?"


Click here to answer this question and the first 10 correct answers will win a USB Mobile fan (for Android)

Who needs Insurance Protection more? The Rich or the Poor?

My belief in Insurance, as it has always been since its creation, is in the pooling & transferring of risk. 

I [quote] from wikipedia on the term "Insurance": [Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment].

We all have possessions in life, and what accompanies with them is the potential of loss. Murphy's Constant also states that "Matter will be damaged in direct proportion to its value". Hence, we protect and manage our beloved/prized possessions for the fear of losing it. We manage our relationship, for the fear of slipping into a separation. We lock our doors to keep the intruders away from unwanted theft. The fear of losing our possessions stems from the sense of ambiguity. We are just not sure if it would happen. But because of fear, we choose to protect it against potential loss. An example widely used in the insurance industry is the "Spare-tyre" theory. Why do we have with us a spare tyre in our car boot when all the four are still in perfect condition. Yes, you just mouthed it…"JUST IN CASE!". The act of carrying a spare tyre is a classic exhibition of an engineered contingency by transferring any possible risk of a damaged tyre to the spare one!

Regardless of wealth, we all have possessions, tangible and intangible. The need for an equitable transfer of risk of a tangible loss is arguably declining when plotted against a person's accumulation of wealth. A Wealthy car-owner will find it financially manageable to repair/replace his damaged/stolen vehicle. But then again, why has he taken up motor insurance? Does he really find no value in implementing it other than for reason of legislation?

Now, let us study a scenario in an average breadwinner, John, whose wife does not work and stays home to take care of their school-going kid. John strives hard at work to bring food to the table, and expenses on any other items could possibly be deemed as luxury. One day, John is diagnosed with kidney failure and requires periodical admission to the hospital and routine renal dialysis. Do you think medical insurance is a luxury or a necessity for him and his family? On hindsight, with the above scenario painted out in the first place, I would imagine that anyone who is of a sane mind would have advised John to pay for a medical insurance, no matter how meagre his discretionary income is. Now, put yourself through those unwanted scenarios. Have you implemented the applicable insurance coverage that you would have advised John to do?

In my view, a person's insurance need has minimal, if any, correlation to his wealth. No amount of wealth can buy you a crystal ball that tells you what is going to happen next. When one cannot and/or chooses not to live with some forms of uncertainty, they have an option to transfer the risk of a tangible loss via Insurance. And when such an act is duplicated by a large number, it transforms into a phenomenon known as "pooling of risk". Though the risk has been pooled, it is not going to be offered to you for free. It comes at a cost or what we called premium. Then it is down to any willing individual to work out and allocate a budget for this purpose.

This writing here is by no means an attempt to debate on the subject. Rather, we like to urge you to review the priorities in your Insurance Protection needs. That is, which type of Insurance do you need more. If you are unsure, do not hesitate to review this with your trusted adviser!

Does everybody have a Will?

As a matter of fact, yes we do. Even we have not visited any lawyer nor wrote anything before. The Will is actually a default Will decided by the government.

Let's talk about what happen the morning "After" death. If there's a Will in place, the person will die testate. If there's no will then the person dies intestate.

If the person dies testate (with a Will), the "appointed" representative (executor) will go to the court and go through the Probate Process and distribute the estate according to the Will.

If the person dies intestate (without a Will), the "agreed" representative will have to go to the court and go through the Administration Process and the distribution will based on the Intestate Succession Act.

Look and sounds the same? Well, not quite. In fact, there's a big difference. Let's see what's the inconvenience if the person dies intestate (without a Will):

1) "Agreed" Representative
Family members will need to agree on who will be the representative which can cause inconvenience and delays. Upon agreement the representative will be need to apply in the court to be the Administrator.

2) Bond & Sureties
Depending on the court, the Administrator might need to provide a bond and sureties (which each sureties asset worth's is same or more than the deceased) especially when there's minor involves.

3) Intestate Succession Act
The distribution can be found here at point no. 6:
https://www.mlaw.gov.sg/content/pto/en/deceased-cpf-estate-monies/information-for-next-of-kin-estate-monies.html
Generally, if the deceased dies leaving Spouse:
- with no children & parents : 100% Spouse
- with children & no parents : 50% Spouse; 50% Children
- with children & parents : 50% Spouse; 50% Children

It's correct. Parents will not get anything, if the deceased dies leaving spouse with children.

Example, husband and child met with an accident and passed away. The husband estate will go to the child and wife; with no estate for the husband's parents. And when the wife passed away, her estate (including her husband's $2 million) will go to her parents.

Without a Will, you cannot determine how your estate is distributed when you passed on and it can end up with the person you dislike.

So will you make a Will?