Meeting at Speaker's Corner 18 Oct, 6-7 pm

[Ah Hai]

Low cash value on termination

Saturday, March 14, 2009
Low cash value on termination

Dear Sir,
I have a PRUCASH policy that started in 2002. The annual premium is $3934. The coverage is very low at $50,000 because it is meant to be an endowment plan. The annual cashback is $2500.

I've only recently educated myself through your website and other sources on how insurance and savings should really work and realised how big a mistake I made when I bought that policy.
The cash value now is about $16000, whereas my premiums paid to date is about $27000.
If I surrender my policy now, I'll "lose" around $9000.

What is my best course of action?Should I continue with the policy and take out the cashback yearly to invest in a low-cost ETF? Or should I terminate the policy and invest in an ETF with the entire sum? The difference in yields required for me to make up that $9000 loss seems to be quite huge.

REPLY
You should ask the insurance company to explain why you had to lose so much money, if you terminate it now. They owe an explanation to you.

To make a decision on whether to continue or terminate the policy, you should ask for additional information. Please read the relevant document in my website, www.tankinlian.com/faq
Posted by Tan Kin Lian at 4:59 PM
8 comments:

Anonymous said...

The Prucash is like the ntuc revosave a dubious anticipated endowment which pays yearly refund, your own money.It is stupid idea to pay for so long to earn a fxxxing 1+%. I think you should take your agent to task and to see whether you were mis-sold or misrepresented. I am sure if you had known all the details you won't even take a second look.
Look into the fact find form to see whether your agent mis-sold the product. Lodge a complain to the insurer if it was and demand a full refund and then to MAS against the agent.
No point continuing . It is guaranteed loss from the start.Imagine receiving your own money. Like one insurer says in the ad, money to save and spend. What it means is you give money to the insurer with one hand and receive your own money with your left but lesser than you give.This is a despecable product by a despicable insurance company and sold by a despicable greedy and dishonest insurance agent.
March 14, 2009 6:28 PM
Anonymous said...

you should terminate and take losses. Don't waste time. Time could be used for investing in other instrument.
Don't touch any of the cashback anticipated endwoments you will be trapped like him. Hold faithfully only to be played out by the insurer with miserable return.
March 14, 2009 7:41 PM
Anonymous said...

Actually MAS should look into this type of dubious products which do nothing for the buyers financially.
This is a scam product which preys on the unwary aunties and o0ld uncles. They only benefit the agents with high commission.
i was nearly trapped by a ntuc agent at their roadshow at bugis junction mrt with similar product. I discovered the 'revosave' has misrepresentation . The cashback is your money but it is misrepresented as 5% interest earned. It is risky. Does it not sound like the minibond?
It is neither a protection nor a saving plan. It is a money sucking plan that targets the suckers.
MAS msut clean up this type of products that deceive people.
March 14, 2009 7:53 PM
Anonymous said...

Only dumb people buy this type of endowment.It was condemned . lately it made a comeback under some fanciful name like reverse-save .
Don't trust your agents. Some of you may have it. My advice is take losses NOW before you lose more.It is a guaranteed loss product.
March 14, 2009 10:26 PM
Anonymous said...

I bought this type of policy few years ago. However, I didn't choose to cash out and the insurer is paying me about 3%p.a for the coupon. Is it worth keeping it?
March 15, 2009 9:20 AM
Anonymous said...

3%? You MAY get it but unlikely and it is not guaranteed. It may be zero. Is there a table for it? Have you any idea what is invested in? From where do they give you? You should know anything, any rate above the fixed deposit rate involves some risk, some lock in.
You should ask the agent whether it is guaranteed or was it disclosed to you? There might be mis -selling.
March 15, 2009 1:49 PM
Anonymous said...

If you are not financial-savvy, my advice is buy insurance for protection only. Full stop. It should be basic and cheap. There should be zero returns, except to claim the sum assured upon an insured event happening. I vouch that most agents 'misrepresent' when selling endownment policies by focussing on apparent high returns, which is uncertain. An endowment policy obtains its returns, hence cash value, from investments. The last 2 years were terrible, hence your cash value under water. I had an endowment policy from Prudential which gave good returns/cash values during 2004-2007, coinciding with bull markets. Last year, i switched the investible funds from equity to bonds, luckily for me, the funds depreciated 5%, compared to 40% decline in equity funds. Hence, the cash value still looks ok. If you have an endownment policy, you need to actively monitor/track its performance. This is no more the good times of steady stock market returns during the 1980s-1990s. We are definitely living in a new financial world order.
March 16, 2009 12:06 AM
Everlearning said...

Is there a possibility for insurance companies to eradicate the column of non-guaranteed returns if they cannot honour the exact amount to the policyholders?

They should work out a more realistic figure for the policyholders who want to insure with them than after ten or more years later frustrate them with a low payout.

Recently, I was offered a number of policies that I fear to take up.
On maturity, the guaranteed sum is less than the total premiums paid. The non-guaranteed sum is half of the guranteed sum promised to the policyholder. That to me is non-realistic!

Obviously, insurance is no longer what it seems to be one or two decades ago!
March 16, 2009 10:07 AM

 

[Ah Hai]

Life insurance quotation gives misleading information

Sunday, March 15, 2009
Life insurance quotation gives misleading information

A policyholder bought a 21 year anticipated endowment p
olicy with an annual payment of $14,500. The quotation clearly stated that a sumof $20,000 is paid every 3 years and the payment on maturity is $80,000 plus RB/SB of $264,800 giving a total payout of $344,800. There was no explanation about the RB/SB and that it is not guaranteed. The policyholder was misled by the agent into believing that the payment is guaranteed.

The policy is now approaching the maturity date. The policyholder is now told that the actual maturity payout is only $232,400, comprising of $80,000 plus RB/SB of 152,400 (i.e. decrease of $102,400) from the quotation. The policyholder was shocked to see this amount of reduction.

I advised the policyholder to file a complaint to FIDREC and, if not resolved, to take a legal case.

MY VIEW:
Now I know why this insurance company was so successful in its sales over the past years. The agents were able to sell large policies by providing misleading quotations to the customers. Most of these customers are not well educated and trusted the verbal explanation of the agents. When they learned the truth years later, it was too late.

The root cause of this problem is the excessive commission paid to the agent and the poor supervision of the insurance company on the conduct of their agents. I hope that this unhealthy practice is properly addressed.

Posted by Tan Kin Lian at 10:56 AM

 

[Ah Hai]

Re: Life insurance quotation gives misleading information

5 comments:

The said...

It is not uncommon for insurance agents to use projected figure as selling feature and in many cases willfully given the impression as guaranteed.This is how consumers are sold on whole life and endowment products. There is no truthfulness and honesty.
I know a lot of consumers are unhappy when they see maturity value lesser than projected and difference is substantial.Most of the time they just grumble and are afraid to take legal actions against the company and the agent.
In my review for customers I would urge them to complain to the company for refund and lodge with MAS for unethical selling .In a few cases I helped them to lodge with MAS as the mis-selling was so glaringly obvious.
For your case if you have not recieved the payouts or cashbacks the maturity value should be at least 4% compounded but your maturity value is below your total premium paid. This is outrageous .
Something is very wrong.
Consumers must understand that insurance whole life and endowment products have risk. In the past the risk was lower but NOW the risk has gone up very much and the return is also lower.These products are unreliable anymore as saving or protection instruments. In fact they are becoming scam products and the company pays high commission to incentivize the insurance agents to lie, miss-sell, misrepresent and cover up the flaws.Meantime, the company closes their 2 eyes if there is no complaint.
$14500 is a lot of money and if it compounded for 21 years at 4% the maturity should be $463000. Maturity value of $344800(projected) gives only a return rate of 1.22%, very miserable. $232400 is even worse , a great loss. You are robbed!!!!
If you are using wholelife or endowment as saving plans they must at least give a return of 4% with moderate risk otherwise don't. 4% is only good enough to protect your value of money because over long term inflation rate is 3.5% to 4%.
Consider all these when investing. Buy term is the best and invest on your own with the help of a QUALIFIED and HONEST adviser. I stress the word "qualified" because 90% of the insurance agents out there are NOT qualified as financial planning advisers, they are salesmen ans women out to make fast buck. Those who call themselves mdrt, cot or tot belong to this group. So, be careful when dealing with them.They are successful, yes, successful in squeezing and robbing your money with rubbish products. Successful in helping you? NO.
March 15, 2009 2:39 PM
Anonymous said...

That's why consumers must now understand CLEARLY the meaning of PROJECTED. It can be as good as zero or even negative!

Applies to investment and insurance products. No point expecting MAS to step in. Do it yourself, that is, avoid anything that says projected. Make it a Golden rule.
March 15, 2009 4:07 PM
zhummmeng said...

Today , there are many of these products flooding the market because they appeal to the aunties who want "to see cash quickly" and who have no idea that this kind of products are useless as saving plan.
The sellers on the other hand are quick to capitalize on this stupid 'need' and the confusion of consumers. Instead of helping the cleints with their NEEDS the agents pander to their wants. Often wants like this can be easily met in less expensive way.
Example, keep under your bed or in the toilet, it is still better than putting into products like Prucash or Revosave from ntuc.This is real LIQUIDITY.(without loss)
Od course, for short term needs it is better to keep in FD as it is more liquid and no lock in risk. For longer term needs and depending on the goals, it is better to put in something which works harder than inflation, at least 3% above it, then there is real growth.
Putting into Prucash or Revosave is guaranteed loss even you hold it to maturity. Of course if it is prematurely surrendered the loss is enormous .
I don't understand why dubious products like them could be sold by agents who are supposed to have the interest of their clients in mind. Instead it is the insurance agents' interest to push these products using false arguments and deceits to trap the clients.
Even the products offer options to "reinvest" the end result is still very inferior. Like the posting above about leaving the cashbacks with the company earning 3%.There is no statement in the policy document that says it is guaranteed
and what and where it is invested in.
Or option to reinvest without the sales charge.... but wait a minute.....to reinvest with half of your premium..this is ridiculous
If i have that intention I might as well invest directly with ALL my premium even being charged the sales charge i will still get much much and superior return.
So you see these products are to confuse you and with agents' trained to distract you and lie to you. The unwary consumers are at the mercy of the insurance salesmen and women who push products instead of finding your needs first.
Fortunately, MAS has realised that enough is enough and it is pay back time for the insurance agents ans other salesmen disguised as consultants.
Lawyers reading this thread, there is great opportunity to make money from the agents by helping the aggrieved consumers to seek redress. Miss-selling and misrepresentation have been committed blatantly and is still on the rise.
Don't know where to start? One tip , go for the so called achievers, the mdrt, cot and tot, you sure to nail them for mis-selling and misrepresentation because their every case sold is using this means.Only high commission products can earn them enough to qualify for these dubious awards.
Or visit the funeral wake you sure to hear from the widow that deceased didn't leave enough for her and her children to live on except for the expenses for his own burial.
This is the scene or landscape of the financial industry where it is meant to enrich the sellers or the stealers of dreams and not the buyers
March 15, 2009 8:12 PM
Yan said...

It's time for Mr Tan to stand up and wipe out this unhealthy practice.

Come to CCK. i ll vote for u.

on second thoughts, go somewhere with the highest chance of winning, i ll use my network to ask all my frens and ppl i know to vote for u.

So happy when i read "wan bao" tonight that you are considering to stand for election!

CHEERS!

be noble. we need more ppl like you.
March 15, 2009 10:37 PM
Anonymous said...

Recently, i was accosted by an insurance agent from ntuc at a roadshow. She insisted to show me the product, revosave which is an anticipated endowment by another name.I asked for the return and she told me it was better than the bank interest rate.She was not specific. She was not wrong to say that her product return was better the bank if she could show me the quotation but she could not calculate.I also asked her whether, other than the bank, was there any risk free rate that the product beat? She could not except to bash her competitors.
Consumers must understand that the bank rate is not a benchmark.
It is misleading to compare to the bank and many uncles and aunties fall for it. The return of this revosave or any cashback products,is a sure die even if you keep till maturity.
The reinvestment options are used to show that the miserable return of the cashbacks can be improved but the question is how much MORE RISK the cleint has to take but the agents tout them as if they are gauranteed, like the 3.5% leaving with company. I asked if she could guarantee that the 3.5% was a guaranteed rate I would buy. She could not.
You see, non disclosure,misleading info, incompetence, suppression of material info were her selling tactics.
Consumers who could not ask questions like the aunties and uncles would have been convinced and would mistake the 5% cashback as the return of the product.This would be another minibond case.
The regulator must step in to stop the misleading advertising posters used by these agents and also ban roadshows. They are a menace and there bound to be unwary passer-bys suckers inevitably who would fall victim to this product and the salesmen peddling products similar to the koyok salesmen at pasar malam.
I wonder how many terminations and lapses have already happened in this economic downturn when suddenly these buyers woke up that they were misled into buying a product they don't need or can't afford.
It is definitely a useless product and doesn't help you finanically instead it shackles you for a very long time.

Concerned observer
March 16, 2009 9:38 AM

 

[Ah Hai]

MAS Consultation Paper - Toxic Investment Products

Sunday, March 15, 2009
MAS Consultation Paper - Toxic Investment Products

Under the consultation paper, the issuers are required to provide more clearer information about complex financial products. But, the question is, will this approach prevent the sale of toxic products?

The credit linked notes, which were allowed to be sold, were toxic because they carry 5 to 8 times the risk of ordinary bonds. The issuer was able to package these toxic products and offer a low rate of return to the unsuspecting investors.

It will be difficult for the ordinary people to understand the risk of these products. They have to rely on the adviser. If the adviser is not aware of the risk, then the chance of mis-selling is high.

There is already an existing requirement for the issuer to provide relevant information about the product that is registered for sale to the public. If the authority is not willing to enforce this requirement under the existing regulation, will the "better disclosure standard" prevent a similar problem from recurring several years into the future?

A better solution is to have independent experts to certify the risk of the product. This independent experts must be appointed by the approving body and not by the product issuer.
If the independent experts cannot certify the products to be fairly designed and described, the authority should not allowed the product to be sold.

This is similar to the certification of drugs. If the drugs is not tested to be safe and effective, it is not allowed to be sold to the public.

I hope that MAS will consider this point. I shall be submitting this suggestion in reply to the consultation paper.
Posted by Tan Kin Lian at 4:43 PM
3 comments:

Anonymous said...

Having those rules in place is one thing, enforcing them is another.
It is still back to square one,
everyone doing what benefits them except the consumers.
Hope MAS keeps to their words and sincere about doing the right thing.
Remember investing is not gambling. it is about win-win-win
March 15, 2009 5:34 PM
Anonymous said...

Hi Mr Tan

Yet again - an excellent suggestion from you !

Having been involved in assisting Minibonders claim against the FI( banks ), I find that the mis-selling would never have occurred if the Minibonders had access ( in the 1st place ) to independent 3rd party reviews of the Minibond product.

We must remember that there is insufficient local expertise in designing, developing and analyzing complex structured products. Hence, the review group(s) have to be comprised largely of foreign experts.

Let their review be available on the Internet ( potential customers may need to pay a small fee to access their reviews ).

If we cant have such a system in place, then the FI's should not be allowed to sell complex structured products to the main in the street.

Then its fair to let " caveat emptor " ( buyer beware ) be the basis of level playing field for customers and banks .
March 16, 2009 8:02 AM
Anonymous said...

Mr Tan, you may like to publish this in your blog. Thank you.

Minibond investors slam HKMA
Beatrice Siu, The Standard

Monday, March 16, 2009

About 1,000 disgruntled Lehman Brothers minibond investors marched from Causeway Bay to the Hong Kong Monetary Authority headquarters in Central yesterday, accusing the government and the authority of ignoring them.
They demanded dialogue with the authorities and full refunds, similar to the offer made by Sun Hung Kai Investment Services in January.

Alliance of Lehman Brothers Victims chairman Peter Chan Kwong-yue lashed out at the government and HKMA for not following up or publicizing the investigation results, and accused them of "black box operations."

"The government failed to take further action in its call for banks to help investors by buying back the minibonds.The protest is our last resort to voice our anger," Chan said.

The investors waved banners and chanted slogans, blaming HKMA chief Joseph Yam Chi- kwong, Chief Executive Donald Tsang Yam-kuen, Secretary for Financial Services and the Treasury Caejar Chan Ka-keung, and Securities and Futures Commission chief Martin Wheatley for being "heartless, irresponsible and useless."

The group set up an altar and held a Chinese funeral ceremony outside the HKMA headquarters to signify "the death" of Hong Kong's role as an international financial center.

Tseung Sing-kwan, 40, who invested HK$200,000 in Lehman-related products at the Nanyang Commercial Bank in 2006, claimed bank staff misled her by not revealing the risks involved.

Last Friday a lawsuit on behalf of SAR minibond buyers was filed in New York against units of HSBC, Lehman and the Bank of New York Mellon for alleged failure to protect investors.

It demands the return of an estimated US$1.5 billion (HK$11.7 billion) held as collateral for the minibonds.

Right advice worth its weight in gold

Paul Ramscar, The Standard

Monday, March 16, 2009

Trusting your financial adviser will always play a key in part of the development of your business relationship - but how deep is that trust and what does it mean for Mr or Mrs Joe Investor looking for advice?
One thing that history teaches us is that people generally never learn anything from the past.

However, it is past behavior that is normally a good judge of future behavior.

So when choosing an adviser who is most likely going to be looking after your financial affairs for the next 10 years or more, you need to be quite certain that you have made the right choice.

If your current adviser has a history of making poor decisions on your behalf then it's a fairly forgone conclusion that the future won't fare much better. Granted that some poor decisions can be made as we are human after all, but there are red flags to watch out for.

When gut instinct says it's time to move on to a new adviser, then its best to start looking.

Some nightmare reports over recent months have involved clients requesting low-risk funds from their adviser only to find upon receipt of their portfolio statements they've been put into high-risk funds.

The Lehman minibond debacle is a prime example of poor advice being given to the majority who did not understand high-risk investments. Not only are these practices unethical but they are clearly against the instructions from the client.

In addition, sophisticated investors - short definition: US$1 million/ HK$8 million in liquid assets - are deemed to be fully qualified investors and, by default, know what the risks are.

The majority don't, and end up being led down a road of unwanted risk that does not end in the emerald city.

Too often clients are scared of the unknown or believe that transferring their portfolio to another firm is too much hassle.

Any adviser worth his salt will tell you that the transfer process is fairly straightforward and that he'll be able to handle it for you.

In most circumstances, only a couple of simple forms and authority letters are required in order to initiate the transfer process. Funds don't need to be sold, nor do shares or most other investments/plans. Of course, your existing adviser may not tell you this because he does not want to lose your business, but you are well within your rights to know all of this information, so just ask.

This year is going to get tougher, but there will be opportunities for those who seek them and if you are with a good adviser he'll be able to alert you to these.

Remember, money can be made in bear markets as well as bull markets.

Paul Ramscar is assistant director - Private Clients at Tyche Group, an independent financial advisory firm based in Hong Kong

e-mail: [email protected]
March 16, 2009 10:28 AM

 

[Ah Hai]

Politician Ratings

Sunday, March 15, 2009
Politician Ratings

Who will you vote in the next general election? Survey.
Here are the preliminary survey results, based on 49 and 112 replies.
http://docs.google.com/Doc?id=dcqjz7c8_128gwbh7rc2

Disclaimer. The people who participate in this survey do not reflect the population at large. This survey attracts a larger proportion of people who are unhappy with the Government.
It is more important to look at the relative ranking of the politicians in the PAP and the alternative parties.

Posted by Tan Kin Lian at 11:00 PM
9 comments:

David said...

MR Tan,

On election matters, ST 14/3/09 mentioned a bit about you.

It also reported that you declined to comment when asked on whether you will be a candidate for the next election.

A good and strategic response!
March 14, 2009 12:06 PM
Civic Advocator said...

We defined it as "Politicians' Rating".
Read here
Good move not to say about yours.
March 15, 2009 4:33 AM
Anonymous said...

I find it strange. How come these internet survey results are so different from actual past election voting results? I mean at every election PAP has the majority.

Maybe someone can do a thesis on this anomaly.
March 15, 2009 2:56 PM
Anonymous said...

You should have included the other ministers such as Mah Bow Tan, Raymond Lim, etc.
March 15, 2009 3:47 PM
Anonymous said...

It is not strange at all. The reason is that internet savvy people are more widely read, more knowledgeable and worldly. They are often people who travel frequently and widely. Hence they have seen more and their views are more intelligent. Whereas the general population often stick to one source for news, the paper newspapers who are the mouthpieces of the incumbent party. So it is not surprising nor strange that they are voting for what they read, a caring and good government as the newspapers would want them to believe.
March 15, 2009 3:50 PM
Anonymous said...

For the sake of the people who read your blog,what is Mr.TKL scores??
Can let us know where you stand?

a retiree
March 15, 2009 4:22 PM
Tan Kin Lian said...

Reply to 2:56 PM

The explanation is given in the disclaimer. The people who participate in this survey does not reflect the proportion in the population. It tends to have a larger number of people who are unhappy with the Government.

It is more important to look at the relative ranking of the politicians in the PAP and the alternative parties.
March 15, 2009 4:58 PM
Anonymous said...

David, what strategic response are you talking about?

It is plain to see that Mr Tan is interested in taking part in election as either MP or President..

Mr Tan, why is your rating indicated as ??. What is your ratings?
March 15, 2009 5:04 PM
Anonymous said...

To Anonymous (15 March 3.50pm)

Don't flatter yourself and generalise that internet savvy people have "views that are more intelligent".
March 16, 2009 10:48 AM

 

[Ah Hai]

Motor Insurance premiums set to rise

Monday, March 16, 2009
Motor Insurance premiums set to rise

Last week, it was reported that the motor insurers lost more than $200 million in 2008 and that the insurance premiums are set to rise significantly in 2009.

Last May, the General Insurance Association of Singapore announced bold measures to tackle this matter. They involved measures that could cause much inconvenience to motorists, but the Association promised that these measures would arrest the problem.

Today Paper asked me to write an article on this matter last May. It is published in the paper. I was sceptical about the masures. Perhaps, someone can asked the Assocation to comment on the failure of their measures?

Tan Kin Lian



Posted by Tan Kin Lian at 7:17 AM

 

[Ah Hai]

Motor insurance - regulator can play a part

Monday, March 16, 2009
Motor insurance - regulator can play a part
14 March 2009

Editor
Forum Page
Straits Times

I refer to the letters by Raganathan Vivek “Why should we pay for insurer’s laxity” and Sia Chong Yew “It’s high time motor insurers put their house in order”.

I agree with the views of these writers. Motor insurers should be more active in combating inflated claims instead of passing the higher cost to consumers through premium increases.

During the 30 years that I headed NTUC Income, my colleagues paid special attention to deal with the inflated claims. We were able to keep the premiums at a more affordable level. We considered it to be our duty to the consumers and be profitable at the same time.

I wish to point out that, apart from the motor insurers, the regulatory authority can play a part as well. Most inflated claims are made by third parties claiming for the repair cost, injury and medical expenses. These claims are lodged with the insurance company a long time after the accident, making it difficult for the claim adjustor to assess the actual and fair amounts of compensation.

To make matters worse, the claims are lodged through lawyers, which increased the total claim payments by an estimated 30%.

This matter can be resolved by a simpler regulatory change. Make it compulsory for a third party to lodge the third party claim with the insurance company within 24 hours of the accident. The insurance company should be given the opportunity to inspect the vehicle and settle the claim directly and promptly. The third party should engage a lawyer only in the event of a dispute on liability.

This practice is adopted in many countries, either as a regulator requirement or as a market practice. It is surprising that Singapore continues to have many third party claims settled in an inefficient and expensive manner through the legal system.

I hope that the relevant authority, i.e. the Monetary Authority of Singapore or the Land Transport Authority, will make the necessary change to the regulation to address this problem. This will reduce the inflated claims by several hundred millions of dollars and lower the cost of motor insurance to consumers.

Tan Kin Lian
Posted by Tan Kin Lian at 8:00 AM

 

[Ah Hai]

Survey: Rating of Government ministries (Singapore)

Monday, March 16, 2009
Survey: Rating of Government ministries (Singapore)

How do you rate the work of the various ministries in Singapore?
Survey.
http://www.surveymonkey.com/s.aspx?sm=ZR_2fOTaCO5_2fQ716EULdhh0w_3d_3d

Here are the survey results.

Posted by Tan Kin Lian at 11:10 AM
Labels: Governance, Survey
3 comments:

Loh Hon Chun said...

I would say, many do not even know how most of the ministries work. Without that knowledge, the survey may not reflect truly.

hongjun
January 17, 2009 11:04 PM
C H Yak said...

The second question should read how do you rate the "Minister" in charge of the Ministries ...?

Not "Ministries" in charge of the Ministries ...
January 17, 2009 11:14 PM
Anonymous said...

Good. Looks like we will soon have a former Malaysian as our PM.
January 19, 2009 2:30 A

 

[Ah Hai]

Shin Min Interview - General Election

Monday, March 16, 2009
Shin Min Interview - General Election

Here are my replies in an interview with Jo Sum of Shin Min News.
http://docs.google.com/Doc?id=dcqjz7c8_127c8mz33fg

Posted by Tan Kin Lian at 9:32 PM
2 comments:

The said...

You can do a Lee Kuan Yew.

Quote:
“Let us get down to fundamentals. Is this an open, or is this a closed society? Is it a society where men can preach ideas - novel, unorthodox, heresies, to established churches and established governments - where there is a constant contest for men’s hearts and minds on the basis of what is right, of what is just, of what is in the national interests, or is it a closed society where the mass media - the newspapers, the journals, publications, TV, radio - either bound by sound or by sight, or both sound and sight, men’s minds are fed with a constant drone of sycophantic support for a particular orthodox political philosophy? I am talking of the principle of the open society, the open debate, ideas, not intimidation, persuasion not coercion…”
- by Lee Kuan Yew, Malaysian Parliamentary Debates, Dec 18, 1964.
March 16, 2009 10:04 PM
David said...

To "The",

Do you dare to take medicine with expiry date long ago?

If not, please don't tell others to do it even in jest.
March 17, 2009 12:00 AM

 

[Ah Hai]

Thought for the day: challenge and controversy

Tuesday, March 17, 2009
Thought for the day: challenge and controversy

"The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy.":

Rev. Dr. Martin Luther King, Jr. (1929-1968), US civil rights leader
Posted by Tan Kin Lian at 11:52 AM

 

[Ah Hai]

Business Week: Innovation - Singapore is No. 1, well ahead of USA

Wednesday, March 18, 2009
Business Week: Innovation - Singapore is No. 1, well ahead of USA

Read this article.
http://www.businessweek.com/globalbiz/content/mar2009/gb20090316_004837_page_2.htm
Posted by Tan Kin Lian at 7:57 AM
1 comments:

Parka said...

So can we start to expect more Fortune 500 companies in the future?
March 18, 2009 11:01 PM

 

[Ah Hai]

Re: Business Week: Innovation - Singapore is No. 1, well ahead of USA

Wednesday, March 18, 2009
Creating service jobs in Singapore
Global demand has dropped significantly. Singapore will have to suffer a drop in production and exports for many months while global demand remains weak. Many more jobs will be lost. The Government's strategy of helping businesses to reduce cost may not help to save jobs in this environment.

I hope that the Government will look into other ways to create jobs and keep people occupied at a modest wage level. They only need to keep people usefully engaged until the recovery of the global economy.

In France, the Government pays a large part of the cost of nannies to look after babies. The parent pays only a small portion. The nannies will look after the babies in the nannies' homes. The parents can afford to send the baby to the nanny, as their share of the cost is low. This helps to keep many nannies to be usefully employed.

I suggest the following ways to create temporary jobs in Singapore:

1) The Government can pay a large part of the cost of engaging nannies to look after babies. The parents can pay only a small part (say 20%) of the cost. The nannies can be asked to meet certain standards of care.

2) There is a need for tuition to help the students from poor families. The tuitors can be trained quickly to meet the educational standards. A large part of the cost of these tutors can be paid by the Government, so that the cost to the students is kept low.

These two ideas can keep many people to be usefully employed until the recovery of the global economy. The wages can be kept low. When the economy recovers, they can find higher paying jobs in the private sector.

Tan Kin Lian

 

[Ah Hai]

Buddhist monks say Twitter can lead to happiness

Wednesday, March 18, 2009
Buddhist monks say Twitter can lead to happiness

Read this article.
http://newsblaze.com/story/20090312104623leon.nb/topstory.html
Posted by Tan Kin Lian at 6:37 PM

 

[Ah Hai]

The best places to be laid off

Wednesday, March 18, 2009
The best places to be laid off

Read this article about countries with generous unemployment benefits and its impact (if any) on the work ethic.
http://economix.blogs.nytimes.com/2009/03/17/the-best-places-to-be-laid-off/?emc=eta1

Posted by Tan Kin Lian at 6:41 PM

 

[Ah Hai]

Motor insurance premiums

Thursday, March 19, 2009
Motor insurance premiums
Many motorists will have to pay higher insurance premiums this year. What can be done about it?

Read my articles:
http://www.tankinlian.com/articles/puncturing.html
http://www.tankinlian.com/articles/motor.html
Puncturing motor insurance claims.
New Motor Insurance measures - will it work?

If you are not happy with the increase in premiums, you should lodge a protest with your member of parliament or with the consumer association of Singapore.
Posted by Tan Kin Lian at 6:18 AM
1 comments:

CCW said...

Mr Tan, actually I had been following up this motor insurance premium increase for the past week, and after reading some articles (including your inputs), I discovered some unusual stuff which I hope you can clarify.

Firstly, motor insurance is not monopolized or dominated by 1 or 2 companies, but rather by many companies. So pricing power by each company is weak, once you increase the price, the customers will go. So is there a tacit understanding among these insurance companies to increase their prices altogether? Since the drivers must purchase the insurance, they have no choice.

Second, companies that intend to be sustainable must keep a lid on costs. For these companies, the biggest costs is claims expenses. Is it true that they need not be as vigilant in cost control as other type of companies because they can pass on these costs increases by jacking up their prices (as long as they do it all together -- see earlier pt)?

Insurance companies used the premiums collected to invest and we all know how bad the investment returns were in 2008. Could the fall in investment returns (or even losses) be the key reason for these companies losing money on this insurance portfolio and claiming it from drivers?
March 19, 2009 11:25 PM

 

[Ah Hai]

Meet the man whose big idea felled Wall Street

Friday, March 20, 2009
Meet the man whose big idea felled Wall Street
Read this article.
http://www.thestar.com/article/604033

Posted by Tan Kin Lian at 8:14 AM
1 comments:

[cz] said...

the title is just so misleading.
March 20, 2009 5:48 PM

 

[Ah Hai]

Pinnacle Action Group: Class Action in U.S. Courts being considered

Friday, March 20, 2009
Pinnacle Action Group: Class Action in U.S. Courts being considered
Dear all

A top US law firm is interested to actively pursue on behalf of all Pinnacle investors a class action in US courts. It will be on a contingency fee basis - "no win, no pay" and all investors will be automatically included, unless they opt-out, after the class action is filed with US Courts. It will be an action similar to the one being done for Hong Kong Minibonds investors.

However, under US law such a class-action can only be initiated if there are at least one or more lead plaintiffs who fit the following criteria:
(a) US citizens who bought one or more of series of the Pinnacle Notes;
(b) Spore citizens with bank accounts kept in a US Bank who bought one or more series of the Pinnacle Notes;
(c) Spore citizens who own homes in the US who bought one or more of the Notes.

If you fit into any of the 3 criteria mentioned in the above paragraph, please contact us with your name; tel. no.; email and other details such as Pinnacle series no . that you bought, etc. We will forward the information to the US law firm, which for confidentiality reasons cannot be revealed at this early stage. When the US law firm in turn contacts you in the matter of the proposed class action to be pursued in US courts, you will know who they are.

This 'US style' class action, by the way, is separate from the proposed class action we are planning for all Pinnacle investors under Spore law and pursued in Spore courts. In the Spore case, we will be making an official announcement when we have finalized the details. It could take another 2-3 months more to do that since there are many details to iron out. But don't be discouraged, we are not going to allow this matter to simply evaporate and will work vigorously to pursue justice and compensation.

Best regards
Pinnacle Action Group
Email:- [email protected]
Posted by Tan Kin Lian at 8:24 AM

 

[Ah Hai]

Surrender a Living policy

Friday, March 20, 2009
Surrender a Living policy
I have decided to surrender my Living policy which was taken 17 years ago. I paid an annual premium of $2,102. The cash value after 17 years is $44,893 giving a yield of about 2.5%.

If I keep the policy for another five years, the estimated cash value increases to $62,417, giving a yield of 3.9% for the next 5 years, based on the projected bonus for the next 5 years. I have decided not to take the risk of a further reduction in bonus, which will reduce the yield below 3.9%.

By surrendering the policy, I can invest the money in other investments. As the share prices are quite low, there is a good chance of earning a better high rate of return from other investments.

The calculation is based on this FAQ.

Posted by Tan Kin Lian at 10:55 PM
4 comments:

zhummmeng said...

You are lucky to get 2.5% yield after 17 years. The vivolife doesn't give 2.5% until 30 years later..
The old living is better anytime and it is simple a product unlike vivolife which has a lot of rubbish frills to hoodwink consumers or to cover up the shy return.
Wonder why consumers so easily bluffed.
March 20, 2009 11:45 PM
zhummmeng said...

You are smart and wise to cash out before they lose them for you in the specail bonus. I also don't think you will ever get as projected. Anyway, the AGM is around the corner I wonder MR. Tan will be raising the bonus issue again.This time they must be made to bare the investment result
March 21, 2009 12:49 AM
The said...

In the recent years the risk of whole life and endowment products has gone up enormously . First noticeable phenomenon is return is low and the breakeven is longer.
Of course for those limited pay term WL products because of more unused premium paid in the early years the breakeven point is shorter. But the trade off is these products take slower time to accumulate and by the 30th year the return is no better than those with longer paying period.
In a nut shell, WL , endowment, regular of single, and anticipated endowment are riskier, low return and expensive.
There are companies which TRY to maintain to look good or to show higher projection they are taking more risk. Example like NTUC , last year the restructuring of the bonus is actually asking the policyholders to take more risk if they want higher return or the return as projected. The problem is, NTUC didn't tell the truth to the policyholders that it was increasing risk instead they hid under the words "restructuring or reshaping" The agents are no better. Some told their policyholder there was no difference in return which is not true. The uncertainty is there.
For this , it is unfair to the old policies which were of lower risk. The old policyholders should be given the right of choice to stay in the old bonus structure and which the contract was based.The insurer has no right to force the existing policyholders to accept higher risk.
Of course again, even in uncertain time like the melt down when all investment of insurance companies suffered big losses there are companies who want to look good will not cut bonuses. But this is dangerous. The money must come from somewhere to pay the bonuses.
For companies doing this they take risk by borrowing from the life fund and hope to cover up or make good by making more sales of wholelife or endowment to make good. This is resorting to PONZI strategy.
The collapse of British Equitable Life was due to this Ponzi strategy.
WL and endowment and worse the anticipated products are looking like scam products . The insurers wrapped up the rotten return and expensiveness with so called extra features which are useless and cheap 'riders' and unlikely to happen or low probability . All these thrown in to decieve the consumers. Some insurance agents are in fact using these features to promote their WL living product. This is miss-selling and misrepresentation.
In today's situation it is better to separate protection from saving.
If you take the same risk as the insurance companies, you get higher return and protection.
You are better off.
Remember to engage a qualified adviser and not salesman to help you.
March 21, 2009 1:01 PM
siewkhim said...

We can raise the investment issue during the forthcoming AGM. But I am very sure those clever boys in NTUC Income will blame it on the global economic blah blah blah.

We can never win these buggers since that is how they got to keep their jobs.

If we are still not convinced that par and investment-linked policies are big con-job, then we will continue to be taken for a ride down the bonus declaration years during the policy lifetime.

PLEASE AVOID PAR AND INVEST-LINKED POLICIES!!!!!
March 21, 2009 1:45 PM

 

[Ah Hai]

Creating jobs in a global crisis

Sunday, March 22, 2009
Creating jobs in a global crisis
I heard on CNBC TV that the banks are still not lending money. They take a lot of money from the Fed at low interest rate and invest the money in US Treasuries and other safe assets to make the spread. Meanwhile, businesses cannot survive due to lack of credit. More people will lose their jobs.

There is no point in giving money to the banks or to businesses. They cannot survive, if there is no demand for their products. People are scared to spend, so they have to save their money to prepare for the bad times. The global economy will collapse, if things continue to spiral downwards. Fear will fear on itself.

The same condition will apply in Singapore. It is important for the Government to recognise the failure of the current system, and to implement a new approach. The Government can create many new social services jobs to keep people occupied and do some useful work in the following areas:

a) Take care of the elderly people
b) Take care of babies
c) Provide local transport
d) Provide tuition

These jobs can be at $6 per hour or at an specified rate (sufficient to balance supply and demand). 70% of the cost can be paid by the Government (subject to a maximum of $600 per month for each worker) and 30% can be paid by the user.

For example, an eldercarer can make a house visit at $30 per visit. Each nurse can make 3 visits a day to earn $90. The government pays $21 per visit (subject to a cap of $600 a month for each carer). The user pays $9 a visit. The carer can visit clients near their home, to reduce the travelling cost.

A person can provide local transport for $1.00. The user pays $0.30 with $0,70 paid by the Government. If the operator takes 100 passengers a day to earn $100 a day and incurs expenses of $60, there is a net income of $40.

The Government expenditure will keep people employed at a modest income level, and offer a service to improve the lives of people. As the income is quite low, there will be a temporary measure. When the economy recovers, these people will find other higher paying jobs and the supply for this service will dininish. If there is still a demand for this service, the Government subsidy can be reduced to achieve a better balance of supply and demand.

I hope that this type of innnovative approach will be adopted in some countries or in Singapore.

Posted by Tan Kin Lian at 8:46 AM

 

[Ah Hai]

US Treasuries - the next bubble?

Sunday, March 22, 2009
US Treasuries - the next bubble?

It is not safe to invest in US Treasuries. When inflation returns, this investment will also drop in value. It may be safer to invest in stocks now. Read this article.
http://www.nytimes.com/2009/03/22/magazine/22wwln-lede-t.html?_r=2&emc=eta1

Posted by Tan Kin Lian at 9:25 AM
2 comments:

David said...

Read this link:

http://futurefastforward.com/feature-articles/1201
March 22, 2009 12:08 PM
ym said...

Hi Mr Tan,..
yes, its better odds to go into stocks now than say 6mths ago... however, equities can easily tank another 30%...

about US treasuries, i am not sure if there is a bubble.. yeilds are low... but real yields is high because of falling prices..

also, do you think ben bernanke will let interest-rates go up in say next 2 years?..

central bankers worldwide is pulling every trick to keep interest-rates low.. and the reason for them to do so is to bailout banks, pump money-out-of-thin-air into the economic system...

all i can emphasize is that all this money printing (ie exchanging something for nothing) is damaging to the real economy,..

risk is still very high...


ym
mises.org
March 22, 2009 2:38 PM