Category Archives: Financial Planning

Breast and Prostate Cancers Rising Sharply in Singapore

 

Source: The Straits Times, 21 June 2017

There are more and more women and men getting cancer in Singapore, especially breast cancer for women rising more than double while prostate cancer for men rising more than five times.  However, with the advancement of medical technology, those cancer patients with early stage cancer have a higher chance of survival.

The top 5 cancers for men are prostate, lung, colo-rectum, liver and blood cancers, while the top 5 cancers for women are breast, colo-rectum, lung, uterus and ovarian cancers.

Therefore it is very important for us to go for regular medical checkup and ensure sufficient cancer coverage to give us a peace of mind should it happens. It is also important to ensure that our existing cancer coverage covers early stage cancer as well, so that we can use the claim to tide us over the difficulty period should we are not working for a period of time to go for various follow up treatments for the cancer.

How about you? Do you go for regular medical checkup with sufficient cancer coverage to have a peace of mind?

 

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Financial Planning Begins With Budget Analysis

Budgeting Analysis

Budgeting Analysis

Many of us may face this frustration where we do not have much money left before our next pay day. How come some of us are good in savings while the rest overspend? Do you want to avoid this frustration again in the future where money is always not enough?

Then it is time for you to look into budget analysis, otherwise commonly known as budgeting. It is advisable for you to take a note of your expenditure everyday, mainly in the five categories – family expenses, family overheads, personal expenses, taxes and luxury items / holidays.

Next step is to identify which expenses are the ones that is not necessary or which expenses you can reduce. For example, some loved to spend money on high end items. Instead of buying high end items, how about those which are of lower prices without compromise on the quality? Some of us love to go holidays frequently. Instead of going frequently, can you cut down on the frequency? Some of us love to buy the latest electronics gadget, Instead of keep buying the latest electronics gadget, can we continue to use our existing ones which are still functioning well?

There are many apps out there where you can keep track of our daily expenses. It is a good way to do budgeting but you must have the discipline to do it everyday. Else, after a while, it is back to the square one where you overspend again.

Another way to ensure that you have savings every month is to open a few savings account in the bank. One account is purely for savings for the future, one account for family expenses and overheads and one account for personal expenses. With different accounts, it will create a discipline in you so as not to overspend and ensure that you have savings every month.

Once you done your budgeting, then it is time to re-look into your existing insurance portfolio to see if you are sufficiently covered for your future. Should any unforeseen events happen such as critical illness, disability or even premature death, is your insurance payouts sufficient to pay for the expenses continuously for a period of time and how long can it last, given that inflation rate keeps rising over the years?

Is it time for you to review your existing policies now? It is better to make sure that you are sufficiently covered now than to regret when something happens.

 

 

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How to set up a fund for life’s emergencies

Source: Asiaone Business, 23 Jan 2016

Source: Asiaone Business, 23 Jan 2016

An emergency fund is a sum of money set aside to deal with emergencies. Some of the common circumstances when an emergency fund is needed are unemployment, vehicle accident and medical expenses.

An emergency fund can also act as a buffer against market risk so that stocks and property do not need to be sold at inappropriate times to meet emergency cash needs. This avoids situation when stocks are sold cheaply during a down market to meet emergency cash needs.

In order to know how to you need to set aside your emergency fund, first estimate your monthly expenses or your family expenses if you are contributing to your family as well.  Next, decide how many months’ worth of expenses the emergency fund should be able to cover. For singles, three to six months’ worth of expenditure should be sufficient. For married couples, the breadwinner should consider setting aside nine to twelve months’ worth of expenses in the emergency fund. Finally, decide on where to store the emergency fund. The emergency fund has to be liquid and accessible, and be exposed to as little risk as possible, such as a bank’s savings account.

Have you set up your emergency fund? If no, what is stopping you? Given current volatile market with more and more companies axing staff, what makes you so sure that your job is an iron rice bowl? How are you going to make ends meet should you lose your job? Please start budgeting now and force yourself to build your emergency fund.

“All cars have built in air bags in case of emergencies. We do not buy an air bag only when an accident is about to happen. This applies to your emergency fund too.”

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Hospitalization Coverage in Singapore

After retirement, how are you going to pay for your hospitalization premiums?

After retirement, how are you going to pay for your hospitalization premiums?

Most of us in Singapore have a comprehensive hospital coverage to protect ourselves against the rising medical costs so that should anything happens, we have a peace of mind as the insurance company is there to take care of our hospital bills.

However, have you thought of what happen after your retirement? Without an income coming in or lesser income coming in, how are you going to pay for your hospital premiums when it will increase as you aged older? Do you have an additional of $89,000 coming in after retirement?

If no, what are you going to do? How are you going to pay for it? Not forgetting that this is the time you need hospital coverage the most?

Do contact me if you want to know what are the various options that are available to you so that you have this sum of money coming in after your retirement.

 

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Do You Understand the Insurance Policies that You Bought?

Source: The Straits Times,  8 Nov 2015

Source: The Straits Times, 8 Nov 2015

There are many policyholders who find it difficult to understand their policies and they do not know how to read the figures in the benefit illustration document to make a decision. When you buy a policy, you get documents such as benefit illustration, life insurance guide and product summary. In the benefit illustration, it will indicate both guaranteed and non-guaranteed benefits and the costs and charges relating to the product you are buying. Besides guaranteed benefits, the non-guaranteed benefits are typically in the form of bonuses that are added to the sum assured. They cannot be later reduced or removed once declared.

Like most traditional whole-life and endowment plans, premiums are pooled in a designated “participating or life fund”. The insurer invests the fund in a range of assets such as equities, government and corporate bonds, property and cash to earn returns that are used to pay the policyholders as well as to finance expenses.

Every year, you will receive an annual bonus update that will show you the bonus that your policy has accrued. You will also receive a par fund update which gives a snapshot of the insurer’s life fund performance over the past three years.

Source: The Straits Times, 8 Nov 2015

Source: The Straits Times, 8 Nov 2015

It is also important to ensure that you can afford the premiums and are able to pay them throughout the plan tenure. Policyholders who surrender their plans early are likely to incur losses and in worst case scenario nothing back.

So do you understand what do your existing polices covered? Do you have sufficient coverage to protect yourself for the future? When is the last time you review your policies? Have you thought of getting a second opinion to what you have bought?

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The Importance of Retirement Planning. Have You Plan Yours?

The Future of Retirement 2015 Report by HSBC

The Future of Retirement 2015 Report by HSBC

In the recent report “The Future of Retirement 2015” by HSBC, it was found that many people in Singapore did not plan for their retirement. 61% of the retirees are concerned about running out of money in retirement. About 41% regretted not savings more, 35% wished they had started earlier to improve their standard of living and 19% said that their living standards are worse than before they retired.

The facts and figures speak for themselves. Do you want to be like them ended up regretting not planning for retirement earlier? Do it now and don’t delay anymore. Let the old aged you thank you for the decision you make today. 

It is Your Life, If You Don’t Plan for Yourself, Who Will Do the Planning for You?

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Should I change my insurance portfolio?

Source: The Straits Times, 5 July 2015

Source: The Straits Times, 5 July 2015

“Insurance protection is important as it gives me peace of mind,” said Mr Yeo. “If something happens to me, I know that my family will be well covered.”

As Mr Yeo has a family history of certain medical conditions, he was concerned about covering himself against critical illness as he grew older. His father, a diabetic, died from a heart attack at 71.

Mr Yeo started out with four policies – a whole life plan, two endowment plans and a regular premium, investment-linked insurance policy (ILP) – which amount to a total sum assured of $210,000 and a critical illness cover of $50,000. His total annual premiums were about $6,000.

REVIEW IN 2008

In 2008, his financial adviser recommended that he boost his critical illness cover to $330,000 by adding two plans – a regular premium ILP and a whole life limited-pay 20-year plan – both of which offer critical illness protection. Mr Yeo also bought private integrated Shield plans for him and his family, which will help cover hospitalisation bills.

Back then, Mr Yeo was aware that he did not need to hold the ILP policy for his lifetime. With an annual premium of $2,400, the plan’s sum assured was $180,000 and it came with a critical illness cover of an equivalent value.

The whole life limited-pay plan, which has a sum assured of $100,000 and a critical illness cover of the same value, has an annual premium of $2,458.

At this point, his total sum assured and critical illness cover was $490,000 and $330,000, and the total annual premiums for his plans were about $11,000.

REVIEW LAST YEAR

Mr Yeo wanted to ensure that his critical illness insurance covers him for life without increasing his premiums significantly.

He decided to restructure his insurance portfolio by surrendering his two ILPs and buying another whole life limited-pay policy. The latter requires premiums payments for 25 years and he enjoys a lifetime protection cover as long as he does not surrender the plan. The whole life plan has a sum assured of $230,000 and a critical illness cover of the same value, coupled with an early care cover which covers critical illnesses at different stages of severity.

After these changes, Mr Yeo’s total death benefit was reduced marginally to $440,000 while his critical illness cover was maintained at $330,000 with an enhanced early care component of $100,000. His premiums amounted to $11,444.

How about yourself? When is the last time do you review your existing policies with your financial planner? Do a comprehensive financial review annually that includes your financial objectives, time horizon, budget and your risk appetite. Do not have the wrong impression that buying just one plan is enough to last you for your lifetime.

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It All Begins With Wealth Protection

wealth protection

The importance of Financial Planning. Always review your existing insurance policies as you move to different stages in your life. Please do not be mistaken that by just buying one plan is good enough to last you for the rest of your life.

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How much is your net worth?

Source: The Star / Asia News Network 7 Dec 2014

Source: The Star / Asia News Network 7 Dec 2014

Knowing your net worth will give you an accurate picture of your financial status which allows you to access your financial advancement or regression.

Your net worth is calculated by adding up the value of everything you own (assets) and deducting the sum of all your debts and liabilities. Having more liabilities than assets, will create a negative net worth. Over-borrowing or poor financial management could also snowball to a large amount of liabilities.

The truth is that increasing your net worth only comes from decreasing your debt and increasing your assets. Professionals recommend reviewing your net worth every six months to a year. Be reminded that your net worth is not constant and could be irregular throughout your adult life, varying on your income level and spending habits.

Successful growth in your wealth does not happen at an instant and requires cautious and continuously planning. This first step will give you an insight of your progress and foresight to improve your financial outlook to provide yourself with a financially sound future.

Have you calculated your net worth? Do you have positive or negative net worth? Which area of your expenses can you cut down to increase your savings? With the increased in savings, what are the financial instruments can you invest in to grow your funds for your future?

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