With Thailand hogging the front page the whole week, this is probably the Best News on the Front Page of The Straits Times yet.

Tan Kin Lian stepping down as Income CEO

About time someone yonger and more dynamic take over the driver's seat. Like to see some changes in NTUC Income rather then being seen as simply "cheap" and nothing else.

This is INSANE

2 days back I posted the following on tankinlian's blog:

"Some companies pay TPD via installments. I bet you don't know about that...Do you know how much you loose if you are insured $500,000? Instead of getting $500k, you get $50k in the first 4 years and the remaning 60% in the 5th year.If you get $500k in year 1, just invest $300k and if the return is 9% pa, for 4 years, you'll be getting $423k. That's an additional $123k for you."

This is what the owner of the blog replied:
"Justin Lim's facts and calculations are not correct. I do not wish to engage in an argument with him. I am sure that he will recommend that you pay a higher premium to buy the product from his insurer."

Either his English is lousy or his company's website need updating. (see proof)
My facts are from reading his website Policy Terms and Conditions and he has the cheek to say that my facts are wrong.
Simple calculation like investing $300k for 4 years at 9%, he also say wrong. Alamak, don't think I need to be a CEO to do such simple calculation.

TRAVEL INSURANCE

I was in Bangkok from 31 August to 02 September 2006. On the 2nd night (a Friday), the laptop bag I was carrying was snatched from behind by 2 guys on a motorcycle. I was glad I had bought AIG Assist (Travel Insurance from AIG).

Amongst some electronic items, my passport was also inside the bag.
As the Singapore Embassy was closed, I had to extend my stay in Bangkok and reported to the Embassy only on Monday.

Luckily for me, AIG Assist covers my Travel Documents. It pays the Insured's (i.e. me) travel and hotel expenses including cost of obtaining replacement passports, travel tickets and other relevant travel documents. Loss of money (max $300) due to theft is also covered.

Additional 3 nights of hitel stay: $234 (approx)
Statutory Declaration at S'pore Embassy in Bangkok: $17 (approx)
Replacement of New Passport: $120
Extra Travelling Expenses: $50 (approx)
Total: $421
Plus Loss of money: $300

My claim from this section with AIG would total to about $731.00.

I made a check on NTUC Income website on their Travel Insurance (http://www.income.coop/insurance/travel/). Although NTUC Income covers loss of money up to $500 with an excess of $40, they do not cover the loss of travel documents. As such, a claim with NTUC Income would only be $460.00 in this case.

Although the premium for NTUC Income's Deluxe Plan is much cheaper at $21 for my 3 days' trip, the coverage is not as wide. If my passport was not inside the bag, then I would have been able to claim more if I had bought my travel policy from NTUC Income.

AIG's Superior Plan cost only $8 more at $29.
Thank God I did not choose my Travel Insurance based on cheaper premium.

Cheapest Term Insurance?
Save $10 a month & you may have just lost $123,474 or more

I read with disgust when a person claim "... (we) are educating consumers about making the right choice about their financial planning" when all they ever talk about is how cheap they are compared to their competitors, blah, blah, blah...

Is premium the most important thing when you are buying insurance?
You will be shocked only to find out that it's too late.
Shouldn't the coverage, terms and conditions (a.k.a. the fine prints) be more important?

2 Questions You NEED TO ASK!

1) What is the Definition of Total and Permanent Disability ("TPD")?
While there is no difference in the definition of Death and Critical Illnesses (since the standardization) from 1 company to another, the definition of TPD surely differs. Generally, to be considered for TPD claim, the insurance companies have a set of TPD definition. One occurance (to be considered for TPD) is that the insured suffered the lost of 2 limbs. Physically? Read on.

While some companies need the limbs to be physically severed, others only require that 2 limbs losses their effective use. Below are just some examples:

NTUC Income defines it as "...the loss by complete severance at of both limbs at or above the wrist or ankle" (Read Details)

AIA defines it as "... loss by severance of two limbs at or above wrist or ankle".

Great Eastern's definition is "...loss by complete severance of two limbs at or above the wrist or ankle". (Read Details)

Prudential: "... loss of the effective use of any two limbs at or above the wrist or ankle...".

I leave it to you to decide which definition would admit the claim more easily.

2) How am I PAID if I submit my claim for TPD?
Some companies would payout by instalment basis (eg 10% of the sum assured in the first 4 years and the remaning 60% in the 5th year) while some other companies pay the full amount (up to a certain limit like $650,000) on admission of the claim.

Do you know how much you stand to loose? If you take out a $500k policy, you claim only $50k for Company XYZ (which pays via instalment) in year 1, while $500k from the companies which pay a lump sum. Invest $300k (from the lump sum of $500k) which earns a 9% pa returns and at the end of the 4th year, you'll be getting $423,474. That's $123,474 more.

Now do you know why certain company can claim that they charge the lowest premium?
Well, it's my bet that they keep the payout and reinvest them.

The following companies, as far as I know, pays TPD claims via instalment basis:
NTUC (see details)

The following companies, as far as I know, pays TPD claims via lump sum (up to a certain limit like $650,000 and the remaining on the 2nd year):
Prudential

I will add on to the list when I know which company uses what payment method.