6 Areas That Could Cost You More Than You Think

Most people only discover a gap in their insurance coverage at the worst possible moment — when they’re filing a claim. By then, it’s too late to do anything about it. Let’s walk through several areas that are often overlooked, why they matter, and what could go wrong if they’re left unaddressed.
1. Maid Insurance
If you employ a domestic helper, maid insurance isn’t optional — it’s a legal requirement in many jurisdictions, including mandatory medical coverage and personal accident protection.

What could go wrong: Your helper suffers a workplace injury — say, a fall while cleaning windows — and requires hospitalisation and ongoing medical treatment. Without adequate coverage, you as the employer could be personally liable for tens of thousands of dollars in medical bills, on top of potential repatriation costs if she’s unable to continue working.

A well-structured maid insurance plan covers medical expenses, personal accident, third-party liability, and even costs related to your helper running away or becoming unemployed. The premiums are small relative to the protection — but the cheapest plan on the market may have exclusions or coverage caps that leave you exposed exactly when you need it most.

It’s noteworthy that an employer’s liability on their FDWs is UNLIMITED.
https://www.mom.gov.sg/newsroom/press-replies/2024/0203-employers-responsible-upkeep-mdws
2. Personal Accident Insurance
Many assume their employer’s group insurance or basic health coverage is “enough.” Personal accident insurance fills a critical gap: it pays out for injuries from accidents, regardless of fault, often with lump-sum payouts for permanent disability or death. It can also cover medical, TCM expenses and infectious diseases.

What could go wrong: A self-employed business owner falls off a ladder while doing minor home repairs, fractures their spine, and is unable to work for eight months. There’s no employer to provide income protection. Without personal accident cover, the loss of income — combined with medical bills and rehabilitation costs — can quickly drain savings or force the sale of assets.
For working professionals, especially those who are self-employed, freelance, or the primary breadwinner, personal accident insurance acts as a financial buffer that keeps the household running while you recover.
3. Motor Insurance
Third-party insurance is the legal minimum — but is it enough? Many drivers underestimate how exposed they are with a basic plan, especially when it comes to their own vehicle’s repair costs or medical expenses for themselves and their passengers.

What could go wrong: You’re involved in an accident that’s ruled to be your fault. Third-party-only coverage means the other party’s vehicle and medical costs are covered — but your own car, which may be worth $200,000 or more, is written off with zero compensation. Add to that any medical costs for yourself or your passengers, and you’re looking at a minimum five-figure loss from a single incident. Comprehensive motor insurance, with the right add-ons (such as windscreen cover, personal accident benefits for occupants, and roadside assistance), ensures you’re not left footing the bill for someone else’s mistake — or your own.
4. Travel Insurance
It’s tempting to skip travel insurance for a “quick trip,” but medical emergencies overseas, trip cancellations, and lost luggage don’t check your itinerary first.

What could go wrong: While on holiday, you suffer a medical emergency requiring hospitalisation and an emergency flight home. Overseas medical costs — particularly in countries like the US — can run into hundreds of thousands of dollars. Without travel insurance, that bill is entirely yours, and an emergency medical evacuation alone can cost upwards of $50,000.Even for shorter trips, a comprehensive travel insurance plan covering medical emergencies, trip cancellations, baggage loss, and travel delays is a small price for significant peace of mind — and the right plan should match your destination, trip duration, and activities (e.g., adventure sports coverage if you’re planning to ski or dive).
5. Fire and Contents Insurance
Why the Bank’s Policy Isn’t Enough. This is one of the most misunderstood areas of home protection. If you have a mortgage, your bank requires you to take up a fire insurance policy as a condition of the loan — and many homeowners assume this means their home is “covered.” It isn’t, at least not fully.

The problem with relying on the mortgage fire policy.
The fire insurance policy attached to your home loan is designed to protect the bank’s interest in the property — not yours. It typically covers only the structure of the building (walls, flooring, fixed fittings) up to the outstanding loan amount or the rebuilding cost of the structure, whichever the bank deems sufficient to protect its collateral.

What it may not cover:
Renovations and improvements you’ve made — that new kitchen, built-in wardrobes, or bathroom upgrade are not part of the bank’s basic structure valuationContents — furniture, electronics, appliances, clothing, jewellery, and personal belongings are entirely excluded. Alternative accommodation costs if your home becomes uninhabitable after a fire. Liability if a fire originating from your unit damages a neighbouring property

What could go wrong: A kitchen fire breaks out due to a faulty appliance, causing significant damage to your renovated interior and destroying most of your furniture and electronics. The mortgage fire policy pays out based on the original structure’s insured value — which may not even fully cover the cost of restoring the renovations, let alone replace your contents. You’re left paying out of pocket for tens of thousands of dollars in renovation costs and personal belongings, on top of possibly needing to rent alternative housing while repairs are underway.

In a worse scenario, if the fire spreads and damages a neighbour’s unit, you could face a liability claim with no coverage to fall back on.

The solution is a standalone home contents and fire insurance policy — separate from the bank’s mandatory policy — that covers your renovations, contents, personal liability, and temporary accommodation. For most homeowners, this is a relatively low-cost addition that closes a significant gap most people don’t realise exists until disaster strikes.
6. Refinancing or Securing a New Home Loan

Your home loan is likely your largest financial commitment — yet many homeowners simply let their loan run on the same terms for years without reviewing whether it’s still the best fit.

What could go wrong: A homeowner locks into a loan years ago and never revisits it. Interest rates shift, but they remain on a package that’s no longer competitive — quietly paying thousands of dollars more in interest annually than necessary.
Over the life of a loan, this can add up to tens of thousands of dollars in avoidable interest. Alternatively, someone facing a cash flow crunch may not realise refinancing options exist that could free up monthly cash flow or unlock equity for other financial goals.
Reviewing your home loan periodically — and understanding when refinancing makes sense versus when penalties or lock-in periods make it costly — can have a material impact on your long-term financial position.
Why Work With an Independent Financial Adviser

Here’s the challenge: each of these areas involves dozens of providers, varying terms, exclusions, and fine print that can make all the difference between a claim being paid smoothly and a claim being rejected.

An independent financial adviser isn’t tied to a single insurer or bank. That means:

Unbiased comparisons across multiple providers, so you’re not limited to one company’s product suite
Tailored recommendations based on your actual circumstances — your assets, dependents, risk profile, and financial goals — rather than a one-size-fits-all package
Identifying hidden gaps, like the difference between your bank’s fire policy and what you actually need to protect your home and belongings
Ongoing reviews, so as your life changes (new home, new car, growing family, career changes, renovations), your coverage evolves with you
Claims support, helping you navigate the process when it matters most, rather than leaving you to deal with insurers alone

The cost of getting it wrong — an underinsured asset, a gap in coverage, or an outdated loan structure — is almost always greater than the cost of a proper review.

If it’s been a while since you’ve had your insurance portfolio and home loan reviewed, now is a good time to have that conversation. A short consultation could reveal gaps you didn’t know existed — or savings you didn’t know were possible.

Do you have TIME?

The one asset you can never buy back

Why time is your most powerful financial tool — and what procrastination truly costs you

You can earn more money. You can find a better job, cut spending, and rebuild savings after a setback. But there is one resource that, once spent, cannot be recovered: time. In financial planning, time is not merely a backdrop — it is the engine. And those who start early pay far less for far more.

This article explores two areas where time works either powerfully for you, or silently against you — insurance planning and wealth accumulation. In both, the cost of waiting is not abstract. It is measured in dollars, doors closed, and dreams deferred.

Part 1 — Insurance: the price of good health

Most people think about insurance when something goes wrong. A diagnosis. An accident. A friend who was suddenly uninsurable. By then, the window has often closed.

Insurance is unique among financial products: it prices not what you have, but what you are. Right now, if you are healthy, you are holding something immensely valuable — the ability to qualify for coverage at the most favourable rates, with no exclusions, no clauses, no asterisks in the fine print. That value depreciates every year, and it can disappear overnight.

“The best time to buy insurance is when you don’t need it. By the time you do, you may not qualify.”

What age does to premiums

Insurers price risk. As you age, your statistical likelihood of making a claim rises — and your premiums reflect this precisely. Consider a 30-year-old purchasing a whole life policy versus waiting until 40 or 45:

Age at applicationIllustrative monthly premiumvs Age 30
Age 30$180 / month—
Age 35$270 / month+50%
Age 40$365 / month+103%
Age 45$495 / month+175%

Figures are illustrative only. Actual premiums vary by insurer, product type, sum assured, and individual health status.

Waiting just 15 years — from age 30 to 45 — can more than double, sometimes nearly triple, your monthly premium for the same coverage. Over a 20-year policy, that difference compounds to tens of thousands of dollars paid extra, simply for having delayed.

The risk beyond premiums: exclusions and declined applications

Higher premiums are uncomfortable. But they are not the worst outcome. The more serious consequence of delay is what happens to your eligibility as your health changes.

A common health event — high blood pressure, elevated cholesterol, a minor cardiac episode, diabetes, a mental health diagnosis — can result in:

  • Exclusion clauses — coverage is issued, but the insurer excludes the affected condition entirely. You may be insured against everything except the thing most likely to affect you.
  • Premium loading — your rate is significantly increased above the standard rate due to elevated risk, and may remain so permanently.
  • Application declined — for serious pre-existing conditions, cover may simply be refused, leaving you with no protection at all.

None of these outcomes are hypothetical. They happen every day to people who assumed they would “get around to it.” The tragedy is that in most cases, they were perfectly insurable just a year or two before — they simply did not act.

“A pre-existing condition is not just a health problem. It is a financial problem that can follow you for the rest of your life.”

The message is not to create fear — it is to create urgency. If you are healthy today, today is the cheapest and most open door you will ever have. Act while it is still wide open.

Part 2 — Wealth accumulation: the compounding clock

Compound interest has been called the eighth wonder of the world — and the mathematics truly is remarkable. But the engine that drives it is not the interest rate. It is time. Specifically, the length of the compounding period. Cut that period short, and you do not just earn less — you must work dramatically harder to compensate.

Illustration: saving for a child’s university education

Imagine the day your child walks across that graduation stage, diploma in hand, surrounded by proud family — that moment 18 years in the making, made possible by a plan you started at birth.

Suppose your goal is $200,000 for your child’s tertiary education by the time they turn 18. Assuming a 6% annual return, compounded monthly:

Start at birth (18 years)Start at age 6 (12 years)
Monthly contribution needed$516$952
Total amount invested$111,526$137,045
Growth from investment returns$88,474$62,955
Goal achieved?Yes ✓Significantly harder

Assumes $200,000 target, 6% p.a. compounded monthly, contributions made at end of each month.

Waiting just six years means you need to save 84% more per month — and invest $25,000 more in total — for the exact same outcome. The returns work less hard because time robbed them of their runway. Many families find that level of monthly commitment unworkable, and the goal becomes compromised or abandoned entirely.evel of monthly commitment unworkable, and the goal becomes compromised or abandoned entirely.

Illustration: Retirement planning at 6% IRR

Picture a couple sitting by the sea, unhurried, watching the horizon together — the retirement they planned for, decade by decade, one consistent decision at a time. That vision is within reach. But the path to it narrows quickly with every year of delay.

Consider individuals all targeting $1,000,000 at age 65, investing at 6% per annum, compounded monthly:

Age you startYears to investMonthly savings neededTotal investedGrowth from returns
Age 2540 years$502$241,025$758,975
Age 3035 years$702$294,797$705,203
Age 3530 years$996$358,382$641,618
Age 4025 years$1,443$432,904$567,096
Age 4520 years$2,164$519,435$480,565

Assumes $1,000,000 target at age 65, 6% p.a. compounded monthly, contributions made at end of each month.

The person who starts at 25 needs $502 a month. The person who waits until 45 needs $2,164 — more than 4 times as much — for the exact same result. Notice also what happens to the “Growth from returns” column: the early starter lets compounding do most of the heavy lifting ($759K of growth on just $241K invested), while the late starter must personally fund over half the target through their own contributions. And critically, those starting at 45 must find that money during life’s most financially demanding years: mortgages, children’s school fees, ageing parents, career transitions. as much — for the exact same result. And critically, those starting at 45 must find that money during life’s most financially demanding years: mortgages, children’s school fees, ageing parents, career transitions.

“Starting early doesn’t just build wealth. It removes financial stress from the years you can least afford it.”

The compounding timeline — where you stand today

AgeCompounding windowStatus
2540 yearsPrime window — act now
3035 yearsStill strong — don’t delay further
3530 yearsCost rising — every month matters
4025 yearsSignificant gap — needs higher commitment
4520 yearsSteep climb — still possible, but demanding
50+<15 yearsVery difficult — urgent action required

Wherever you are on this timeline — the right answer is identical: start now. Not tomorrow. Not after the next pay rise. The second-best time to plant a tree was yesterday. The best time is today.

The cost of “I’ll do it later”

Procrastination is the single most expensive financial decision most people make. It is invisible, painless in the moment, and its consequences reveal themselves slowly — until they arrive all at once.

Consider the full picture of what delay costs across both areas:

  • In insurance — waiting means higher premiums, possible exclusions of the very conditions that matter most, or being declined entirely. The healthy self you have today is an asset with a ticking expiry.
  • In wealth accumulation — waiting means needing to save far more each month for the same outcome, putting enormous pressure on your future income and lifestyle. Your money has less time to work, so you must work harder instead.

Both problems compound. And both are entirely preventable — simply by deciding to act today.

Where to begin

You do not need to solve everything at once. You need to start. Here is a simple four-step framework:

Step 1 — Protect what you have, while you still can

Review your insurance needs while your health is on your side. If you do not have life, critical illness, or disability coverage — or if you have not reviewed existing policies in years — make that your first call this week. Tomorrow is not guaranteed; your eligibility today is.

Step 2 — Set a compounding goal and work backwards

Identify one wealth goal — your child’s education, your own retirement, financial independence — and calculate what a monthly commitment looks like if you start today. The number is always more manageable now than it will be in five years. Start, even imperfectly.

Step 3 — Automate contributions and let time do the work

The people who build wealth reliably are not the cleverest investors — they are the most consistent ones. Set up automatic monthly contributions so saving happens before spending. Discipline becomes effortless when it is built into the system.

Step 4 — Review annually and adjust as life evolves

Life changes — income grows, families expand, goals shift. Your coverage and contributions should change with it. A yearly review with a trusted adviser keeps your plan current and ensures you are never under-protected or under-invested. Small adjustments early prevent large shortfalls later.

Your future self is counting on you. Every day you wait, the cost rises. Every day you act, time works harder for you. The gap between the two is compounding right now — in one direction or the other.

Disclaimer: Figures used in this article are illustrative only and do not constitute financial advice. Actual premiums and investment returns will vary based on individual circumstances, health status, product type, and market conditions. Please consult a licensed financial adviser for personalised recommendations.

What’s happening to my IP Hospital shield plan, again?!

As you may be aware, the Ministry of Health (MOH) recently released a list of cancer drugs that will be covered by MediShield Life and other integrated shield plans. The list includes both generic and branded drugs, and covers a range of cancer types, from breast cancer to lung cancer.

The inclusion of these drugs on the list is a significant step towards ensuring that cancer patients receive the treatment they need without facing undue financial burden. However, it is important to note that not all cancer drugs will be covered by your integrated shield plan. If you are currently undergoing cancer treatment or are simply concern with adequate coverage for cancer treatment, it is important to review your plan and understand the coverage available to you.

We understand that cancer can be a challenging and difficult disease to navigate, and we want to ensure that you have the information and resources you need to make informed decisions about your healthcare.

How am I affected by this?

From 1 April 2023, upon renewal of your Policy, your Policy’s (As Charged) outpatient Chemotherapy benefit and Immunotherapy benefit (if applicable) will be replaced with

– a new outpatient Cancer Drug Treatment benefit and

– Cancer Drug Services benefit.


• Cancer Drug Treatment benefit (CDT) – Only outpatient cancer drug treatments on the CDL will be claimable under your Policy, up to the treatment-specific benefit limits. Selected outpatient cancer drug treatments beyond the CDL will be claimable under riders. If you require cancer treatment following the changes, please consult your doctor early on whether your treatment is on the CDL.


• Cancer Drug Services benefit (CDS) – Services that are part of any outpatient cancer drug treatment (including treatments not on the CDL), such as consultations, scans, lab
investigations, treatment preparation and administration, supportive care drugs and
blood transfusions, will be claimable under the Cancer Drug Services benefit, up to
specified benefit limits.

Changes to the IP plan by the various insurers are as follows

Main plan

Singlife ( known as Aviva previously)

  • up to 5x Medishield Life claim limits for CDT (CDL) and CDS

AIA

– up to 5x Medishield Life claim limits for CDT (CDL) and CDS

Income

– ranges from 3 to 5x Medishield Life claim limits for CDT (CDL) and CDS depending on the plan

HSBC (known as AXA previously)

– ranges from 2 to 5x Medishield Life claim limits for CDT (CDL) and CDS depending on the plan

Next, IP riders

Singlife

  • Existing rider does not boost limits for CDT (CDL) nor CDS. However, it includes a benefit for CDT (Non-CDL)
  • Introduced a New Cancer Cover Plus rider
  • boost the limits for CDT (CDL) and CDS and includes a benefit for CDT (non-CDL)
  • benefit limits are on As Charged basis up to S$1.5mil/yr, subject to plan deductibles and co-insurance
  • you can apply for the rider, subject to health underwriting and additional premium
  • Note : this rider can be purchased to complement IP policies issued by third party insurers

Brochure

AIA

  • Existing rider seeks to cover part of the deductible and co-insurance for CDT (CDL) and CDS

New Cancer Care Booster rider

  • Boosts the limits for CDT (CDL) and CDS and includes a benefit for CDT (non-CDL)
  • this rider will be automatically added to your policy upon renewal without need for health underwriting but will be subject to additional premium. You can choose to opt out.

Income

– Existing rider boosts the limits for CDT (CDL and Non-CDL). Nothing for CDS

– No new rider

HSBC

  • Existing rider boost the limits for CDT (CDL) and includes a benefit for CDT (non-CDL)
  • No new rider

In summary

  1. IP main plan does not cover CDT (non CDL)
  2. Cancer treatment is no longer on As charged basis and shall be catagorised into CDT (CDL) and CDS and shall be subjected to certain benefit limits.
  3. Main concern for policyholders will be the uncertainty on whether the CDT and CDS limits are adequate and whether it’ll be adjusted for inflation down the road.
  4. To address these concerns, Insurers have either enhanced existing riders or introduced new riders. Personally, I’ll encourage to apply for the rider especially if you’re on a private hospitalisation plan. However, new riders may be subject to health underwriting and additional premiums
  5. Perhaps an additional solution may be through a life plan with critical illness cover
  6. Switching of IP insurer is highly discouraged especially if you have any pre-existing medical conditions
  7. IP plans have gone through significant changes over the years (e.g removal of full cover riders and introduction of panel specialists and pre-authorisation) and I foresee that it will get increasingly more complex

If you have any questions about your coverage or would like to discuss your options, please get in touch with your trusted adviser.

Winds of change beckons

In the course of the past few weeks, I have received inquiries on new and pending changes to the insurance industry and so I would like to share this news and how it’ll affect you as a policyholder.

1. Updated Critical Illness (CI) definitions come Aug 2020

Life insurers to change definitions of critical illnesses

CI definitions_new Vs old

This is done to “address ambiguities that have arisen due to medical advancements and health trends in the past five years,” said Mr. Khor Hock Seng, president of LIA Singapore and allow standardization of CI definitions across all insurers.

Existing individual life policies are unaffected but group insurances are expected to be I believe.

If you wish to benefit under the current set of definitions, do get in touch with me asap.

Singaporeans lack critical illness insurance cover: Study

2. Expanded list of CI

If you are holding on to a policy purchased at least 2-3yrs ago, it’ll probably cover just 30 CI. Now, it’s pretty common for insurers to provide 35 CI and there are a few offering up to 55 CI.

More comprehensive coverage is of course better for you.

3. Early and Intermediate stage CI

3 stage CI definitions

This was introduced sometime back in 2015 and the product terms and premium have now reached a certain level of stability and maturity.

Given that people are now more concerned over their state of health and will attend more regular health screenings, it, therefore, allows early detection of health issues and necessary treatment.

Allowing an early claim on health conditions will provide you greater peace of mind over healthcare bills and the option to say, take sabbaticals or take a step down from work to focus on the recovery of your health or spend more time with your loved ones.

Using Cancer as an example, you will note that Carsinoma-in-situ is excluded under the Advanced stage cancer definition whereas you will note that it is a covered or claimable event under Early stage cancer.

This then leads to the question on whether you prefer an early claim or when the illness has deteriorated till a possibly irreversible point? I believe the answer is obvious.

As Early CI coverage significantly increases the probability of a claim, the premium will be higher compare to an Advanced stage only CI cover, but well worth it’s value if you can budget for it.

4. RBC2 (Risk Based Capital 2)

Par policies could yield lower bonuses with new risk-based capital framework

In a nutshell, this will be a new capital framework by MAS for insurers to enhance risk assessment so that capital requirements are more aligned to it’s business and risk profiles.

While the new regulatory requirements will serve to improve the solvency of the insurer and ensure that the guarantees in their policy contracts will be better backed by appropriate assets e.g long term government bonds, the prevailing low bonds yields will mean a higher than desired proportion of the par fund will have to be allocated to bonds.

Resulting from above, a lower allocation to equities in the par fund may impact the insurer’s ability to meet investment returns originally projected. Worst case, you can expect to experience cuts in reversionary bonus and/or terminal bonuses on existing issued policies.

For upcoming policies, you can expect a lowering of the investment projection to max 4.5%p.a (was at 5.25%p.a when I first joined the career back in 2003), lower guarantees and restructuring of bonuses away from reversionary bonus towards terminal bonus. This, in turn, creates greater uncertainty for the policyholder to evaluate the non-guaranteed projections by the insurer.

Will this mean that endowments will no longer be attractive?

– This is a new normal and your bank deposits are not immune.

Banks here cut deposit rates in line with global markets

Local banks cut interest rates on savings accounts amid Covid-19 outbreak

UOB further cuts interest rates of flagship account

– In my opinion, it will still remain a relatively attractive form of long term accumulation for your children’s education funds and retirement.

– However, lower yields will mean that we need to

If you wish to secure the accumulation savings plans under the current guarantees and bonus structure, do get in touch with me asap.

Lastly, don’t let short term disruptions like Covid-19 put a pause on achieving your long term financial goals. With courage and determination, your continued action today will serve you well in future.

Singapore life insurance sales rise 10% in Q1; may take Covid-19 hit rest of year

Covid-19 and your Finances

The PM speech yesterday is a sobering reminder that the Covid-19 threat, now being a global pandemic, is far from over and we can expect to see a spike in infections and perhaps deaths. While our government can put in all the necessary measures to contain and eradicate the virus, it also boils down to the social responsibility of the individual to exercise personal hygiene and self-isolation if feeling unwell. 

But having said that, life goes on, just with some added precautions.

On the Financial front, what actions should you take in light of the prevailing situation? Well, here are my suggestions:-

1. REFINANCE YOUR HOUSING LOAN
– to address a global slowdown, countries will probably inject liquidity into the system and that’ll drive interest rates lower
– Hence, there’s no better time to seek lower housing loan rates
– we deal with mortgage brokers in this area and they’ll help you secure the most appropriate loan packages for you, hassle-free 

– Do get in touch if you’re keen to explore 


2. INSURANCE PROTECTION
– this is pretty obvious. If you have been procrastinating to insure you and your family, there’s no better time than now to take action. If a pandemic happens in S’pore, insurers may hike premiums and/or tighten their underwriting, so lock-in your relatively low premiums now and secure your coverage in the interest of your family

 – Do get in touch if you’re keen to explore 

3. REDUCE DISCRETIONARY EXPENSES AND BUILD CASH RESERVES
– this is especially true for self-employed or entrepreneurs whose earnings can be affected by the economic slowdown 

4. CONTINUE TO SAVE & INVEST FOR RETIREMENT

– Deploy surplus cash reserves and monthly surplus cashflow to generate higher yield in order to achieve your accumulation goals, whether it’s for wedding, child’s tertiary education or retirement. 

– I’ve been a strong advocate for endowment savings type plans as most clients will benefit better with a hassle-free approach to generate a respectable return of about 4%p.a with capital guaranteed, for their wealth accumulation.

– On investments, you can benefit from our company structured portfolios with regular review and rebalancing provided. To better ride through market volatility, it takes a long term horizon, nerves of steel and a dollar-cost averaging strategy to achieve your accumulation goals.  

– Do get in touch to find out more and to review your investment portfolio  

5. BOTTOM FISH THE MARKET

In the above screenshot, you will observe that major markets have dropped 25-35% within just 1 month. Taking reference from the U.S market, it has wiped out the entire 2019 gain in just 1 month!

 So are there still opportunities to buy? Certainly!

Invest now? To be advised…

Do email me to register your interest so that when the opportunity presents itself, you’ll be among the first to get notified

A. Company managed portfolios 

Minimum investment – S$10k (recommend at least $50k)

Recommended monthly investment – at least S$1k/mth 

B. Tactical Portfolio strategy (only for experienced and responsive investors)
Minimum investment – S$200k Cash only

This is not a time to be passive but rather to take proactive action to secure your long term interest. Look forward to hear from you. 

Meantime stay safe and positive always….

If you know any colleagues, friends, parents or relatives who would like to benefit from the above, your kind introduction will be appreciated and feel free to forward this article.

Get in touch at gilbert@avallis.com

Start off the new year with up to 9 months FREE Disability Support Programme*

Disability and YOU

You qualify to receive the disability benefit in the event you are unable to perform at least 3 Activities of Daily Living (ADL).

Why Sign up?

It provides interim financial assistance should you be severely disabled before you enter the national CareShield Life scheme in mid-2020.

TO QUALIFY

* Singaporeans and PRs aged 30 to 40 between 1 January 2020 to 30 June 2020
* BMI between 19-30
* Never claimed from Aviva (for any Life & Health product) 

Input agent code : 60003220 

*Terms and conditions apply.

If you know any colleagues, friends or relatives who qualify, do forward this to them to share the good news!

Are you ready for take off to Retirement Bliss?

What comes to your mind when you think about your retirement?  

Option A
Staying at home looking after your grandchildren, taking public transport to meet friends over coffee or majong. Taking an occasional vacation to a nearby destination in Asia. Healthcare options are limited to government restructured hospitals. Financially independent. 

Option B
Zipping around town in your car meeting friends for a round of golf followed with a high tea buffet in a hotel and some shopping in town. Have the option to change your car every 5-7yrs.  Ability to afford at least 2 vacations globally a year with your grandchildren. Healthcare options are available up to private specialists and hospitals. Financially independent with a decent-sized estate that can be passed down to your children and grandchildren. 

Whether it’s option A or B will depend very much on your desired retirement lifestyle and the size of your retirement nest egg prevailing at that point. The more funds you have, the more retirement options will be available to you.  

For most working professionals, I believe they will desire a lifestyle similar to option B but interestingly, their retirement plans may not match that objective. Why?

Some of the possible reasons are as follows:- 

  1. Prioritizes immediate gratification over deferred enjoyment
  2. Low savings ability due to inability to curb lifestyle spending &/or over-commitment to car and housing. With our high property prices, it is not uncommon to see couples saddled with at least S$1mil in housing loan nowadays
  3. Having a single income to support the family after a spouse leaves employment to look after the children
  4. Being overweight in investments with a performance that did not pan out as expected. Wost still, ended with a capital loss.
  5. Procrastination leading to delay and underfunding in the accumulation plan
  6. Overestimated that CPF alone will be sufficient for retirement
  7. Underestimation of how much is required at retirement age to live that desired retirement lifestyle

In this article, I’d like to discuss point #7. 

To facilitate the discussion, let’s think of retirement to like taking a long term overseas vacation…something that most of you will be able to identify with. After all, taking overseas vacations is one of the most favorite pastimes for overworked Singaporeans, wouldn’t you agree?  

A. The Destination

With every vacation, it starts with the destination.

Given our longevity, retirement may span at least 25yrs. Hence, for discussion purpose, let’s assume that we’re taking a Flight to Brazil which is a 30 hour flight time 

Perception pitfall: one may think that the retirement period is far shorter 
ST article

B. Plane type, Engine, and thrust, fuel capacity

Given the destination, which plane do you think can best bring you there most effectively in one piece with minimal refueling stops? A turboprop, piston, midsize jet or a wide-body airliner?
– A wide-body airliner of course!

In financial planning terms, the size of the plane is akin to the size of the retirement nest egg required to provide you with the desired retirement lifestyle. If your financial adviser has done a calculation for you, you will realize that it’s no small change. After all, Singapore is reputed to be one of the most expensive cities to live in. 

With a large airplane, it needs to be equipped with large engines and fuselage to power the aircraft. Moreover, the cost of the plane is not constant. Instead, it goes up over time due to inflation.

Hence in financial terms, the earlier we start accumulating and the higher the regular contribution, the more power you will inject into the accumulation process…and the more likely we can achieve our retirement goal.

Moreover
Perception pitfall: one may think that they can rely on CPF alone or that retirement doesn’t require too much money.
 ST article

C. The Runway 

Every plane needs a runway to allow it to pick up speed for take-off. Similarly for retirement, the runway is the time period from now till our expected retirement age. This is the critical period for us to contribute towards our retirement nest egg, and take advantage of the compounding effect of money.

Typically the larger the plane, the longer the runway needed. Since we have deduced from above that we’ll require a Airbus A380 equivalent, we do need a long runway for it to do a proper take-off, agree? That means that we really need to start early – as soon as we’re in our age 30s, to start the accumulation process. Appreciating this point is the most important part of the accumulation process.

If we take advantage of the long runway by starting early, small regular contributions can allow us to achieve our retirement goal with little financial stress. We can see that through the effect of compound interest in the picture below. It certainly looks like a plane take off trajectory, isn’t it?

However, if we procrastinate and start later in life e.g age 45, the runway will be shorter and we will be required to contribute significantly more on a monthly basis to reach the same end goal. That would be pretty stressful, wouldn’t it? Another example can be seen in the following 

If you’re only starting to accumulate in your 50s, your runway will be rather short and you will need all the financial firepower you can give to your accumulation plan. If you fail to do that, I’m afraid you may have to consider deferring your retirement age and/or downgrade your retirement expectation.

In summary, our ability to achieve our retirement goals are dependant on how well we manage the following 4 parameters:-

1. desired Retirement Lifestyle, expected Longevity and Inflation
– which will determine how much is needed at retirement age
2. Accumulation Period
3. Size of the Regular Contribution to the plan
4. Rate of Return on the plan (which I’ll address in a later article)

Ready to take off to retirement bliss? Get in touch with me at gilbert@avallis.com

IP riders – Navigating through the maze

IMPORTANT : This is particularly relevant to those who have a private hospitalisation plan AND 

– have an option C rider under Aviva Myshield (regardless of when it was purchased) OR
– purchased full cover IP (Integrated Shield Plan) riders with any insurer on or after 8 Mar’18.

As you are probably aware, all the IP insurers have made changes to their plans in line with the MOH announcement back in Mar’18, requiring co-payment features for IP riders by 1 April 2019. 

With the exception of Aviva, for those who bought IP riders before 8 Mar’18, you will continue to enjoy your rider with benefits unchanged. For Aviva policyholders, pls see “New Aviva Option C rider” below.

For those who bought full cover IP riders between March 8 last year to March 31 this year, your plan will transition to the new co-pay riders upon the renewal of your policies from April 1, 2021.

NEW Co-pay riders (how it works in general)

So how does the new co-pay riders look? Depending on which insurer and plan (we will assume private hospitalisation for discussion purpose) you are with, it may have the following features :-

1. 5% co-payment by you subject to a cap of S$3k/yr if you are using the insurer’s panel of specialists. No cap if using non-panel

2. AXA, Aviva and NTUC require an additional rider deductible to be payable by you if using non-panel specialist

3. AIA rider will not cover main plan deductible and co-insurance at all if using non-panel specialist

This is applicable if you bought the option C (combination of option A + option B) rider before 8 Mar’18. This rider will be effective upon your policy renewal in 2019.
– there is now a rider deductible payable by you as highlighted in the table below (Existing MyHealthPlus column)
– amount of rider deductible is dependent on whether panel specialist is used &/or pre-authorisation is given. Please refer to the table below- “Existing Myhealthplus” column.

New Aviva Option C rider (pls refer to Existing MyHealthPlus column in the table below)

New Aviva Option C II rider
This is applicable if you bought the option C (combination of option A + option B) rider on or after 8 Mar’18

Essentially, the Option C II rider covers 
– the main plan deductible after you pay a rider deductible (pls refer to above table, “New MyHealthPlus” column)
– 50% of the main plan co-insurance (your exposure is cap at S$3k if using panel specialist with pre-authorisation, otherwise no cap)

Insurer panel of specialists and pre-authorisation

In practice, on the issue of using the insurer’s panel of specialists and pre-authorisation, there may be a tendency for policyholders to overlook this as the specialist they see will often be referred by their GP or referred by their friends. Hence, there’s a possibility that your preferred specialist may not fall under the insurer’s panel.

This concern is real as I’m usually informed by my clients on their impending hospitalisation or surgery just days before the surgery or hospitalisation.

Moving forward, pls use the insurer’s panel of specialist (click on the link)

Aviva’s panel of specialists
Telephone number for pre-authorisation – 66640246
Aviva_MyHealthPlus_MyShield_BrochureDownload

AXA panel of specialists
AXA shield

AIA panel of specialists
AIA Healthshield Gold Max

NTUC panel of specialists
NTUC Enhanced IncomeshieldDownload

To meet up for a discussion, just hit reply and we’ll get in touch soon.

Can your financial plan stand up to the Big Bad Wolf?

If you belong to my vintage, you might remember this cartoon fondly.
Besides being merely entertaining, we can perhaps draw some important lessons from it.
On reflection, we can note several parallels with financial planning.
Well you see, a financial plan is very much like building your home, to shelter you from the elements and to provide creature comforts to you and your loved ones.
However, there are 3 major differences between a financial plan and a home:-
  1. A house is a physical tangible item whereas a financial plan is intangible
  2. A house serves an immediate need whereas a financial plan serves a future need
  3. Unknowingly to most, the financial plan might be the only thing that can salvage your home
The 3 little pigs represent 3 types of attitudes towards financial planning:-

The pig that built a house of straw

This could represent an individual who

  • may lack awareness and knowledge on the need to plan financially or one who prioritizes resources for immediate gratification
  • prefers to DIY instead of seeking professional advise

The pig that built a house out of sticks

This could represent an individual who

  • has done some financial planning based on limited knowledge with the false comfort thinking it’s already adequate and has therefore underfunded the plan.
  • prefer immediate gratification over planning for the future
  • does financial planning on a sporadic rather than a systematic and holistic basis.
  • may have prioritized wants over needs e.g preference for wealth accumulation over family protection, thereby ending up with inadequate insurance protection.
  • has neglected to upgrade/upsize his financial plans to meeting his growing financial needs as he progresses through life (e.g getting married, starting a family and growing lifestyle needs)

The pig that built a house out of brick

This could represent an individual who

  • thinks long term and seeks the help of a trusted financial architect to design a sturdy financial plan that can withstand whatever life throws at it
  • has foresight and conviction to plan for the betterment of his family, he is willing to commit more time and resources towards meeting this goal
  • understands that a financial plan needs to be updated in accordance with his growing family structure and changing lifestyle needs so that the financial plan will always stay relevant in meeting his financial goals

  • In scene 1:58, he was being teased by the first 2 pigs on why he’s taking so much time and resources to build his house of brick when he could be playing. In life, it’s like when one is frugal/prudent with his money, choosing to defer immediate gratification so that he can channel resources towards meeting his future needs, while his friends indulge in parties and lavish/lifestyle goods? But he is not deterred and remains single focused, as he knows one day that the big bad wolf will be paying a visit and it’s best to be prepared in advance.
Ensure that everyone in your immediate family and elderly parents has an adequate financial plan 
In the story, when the house of straw got demolished, the first pig went to the house of sticks to seek protection, and when the house of sticks got similarly trashed, the first 2 pigs ran to the house of bricks to seek protection.
In life, this is like having a loved one who was uninsured, inadequately insured or not accumulated sufficient funds for children’s tertiary education or not having sufficient funds for retirement. Who do you think they will turn to for funds?
The Big Bad Wolf

The last character is none other than the big bad wolf but you know, so long as you’re financially prepared, there’s actually little need to worry and yes, that wolf can be tamed to become like a kitty cat.

The wolf can represent the following:-
  • Untimely death, disability, critical illness, a serious accident in the family
  • Funds needed for your children’s tertiary education
  • Funds needed to fund provide the desired lifestyle for your retirement years
If the above concerns are important for you to address, then it’ll be to your advantage to have the right attitude towards financial planning – plan early and commit the required resources to fund such future needs. Your family’s long term financial future depends on it.

Raffles Shield – New kid on the block

RafflesHealthinsurance(RHI) , a fully owned subsidiary of Raffles MedicalGroup, announced the launch of Raffles Shield, making it the seventh player to enter the industry. Raffles Shield is the first Integrated Shield Plan (IP) developed in collaboration with Raffles MedicalGroup and is a Medisave- approved IP providing coverage for hospital and surgical expenses.

Raffles Health insurance has observed that many who purchase IPs are keen to have private hospital coverage without overly expensive premiums, and would like to have more flexibility to manage their premiums. In response to this, Raffles Shield offers two attractive options

1. the Raffles Hospital Option
– typically, one has to decide between choosing a private hospital plan vs a government restuructered hospital plan and the decision basically comes down to affordability of premium.

With Raffles Shield howver, it offers an hybrid option where a government restructured hospital plan is combined with a Raffles Hospital option at an afforable premium without any pro-ration being applied.

2. the High Deductible Option (HDO)
– whereby instead of the usual S$1.5k-3.5k annual deductible, one can opt for a S$10k annual deductible in exchange for a lower premium.

This works especially well in situations where the insured is aleady covered by existing employee benefits and thereby avoids duplication of cover and paying excessive premium at the same time. When you feel the need to have a smaller deductible, just remove the HDO anytime during policy renewal without any medical underwriting!

Pre-existing medical conditions

Typically, hospital type insurance plans have the strictest level of underwriting whereby if one has a pre-existing medical condition, a health exclusion can be commonly expected.

Hence, another unique feature of the plan is that it might be able to offer coverage to individuals with certain pre-existing conditions and work with them through the Raffles Care Management Program to improve their overall well being.

To find out more about the plan and seek independant advise on which plan option suits your needs best, just get in touch wth me at gilbert@avallis.com