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The two types of Insurance Nominations you can make and their differences

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If you own a life insurance policy with death benefit, you may choose your nominees (or beneficiaries) to inherit the insurance proceeds using one of the two types of nominations. ✏️ π‘π„π•πŽπ‚π€ππ‹π„ ππŽπŒπˆππ€π“πˆπŽπ (𝐒𝐄𝐂. πŸ’πŸ—πŒ) A revocable nomination informs the insurer who to pay the insurance proceeds to, and in what proportion. You may appoint anyone as a nominee, including foreigners or legal entities such as charities, or religious organisations. As the name suggests, it can be "revoked" or terminated anytime that you wish, without permission from nominees. Nominees will only receive the death benefit , while the living benefits belong to the policyowner. Take note that if you make a Will after doing a revocable nomination, it will supersede the instructions in the nomination. ✒️ 𝐓𝐑𝐔𝐒𝐓 ππŽπŒπˆππ€π“πˆπŽπ (𝐒𝐄𝐂. πŸ’πŸ—π‹) A trust nomination serves the same purposes in informing the insurer who to pay to. However, you can only nominate your spouse and/

Levelling Up Your Critical Illness Coverage to Multi-Pay

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Did you know that Critical Illness (CI) insurance was invented by a cardiologist?  Dr. Marius Barnard saw his patients fall into financial hardship after the expensive treatments. After years of garnering support from insurers, the first CI policy was launched in 1983, covering 4 illnesses: heart attack, cancer, stroke, and coronary artery surgery. Today, the number has expanded to 37, including conditions such as coma, brain tumour, kidney failure, and others.  In 2008, the first early-stage CI policy was launched and is now a common feature in all CI policies today. Based on our latest claim statistics, about 50% of CI  claims are for clients aged between 46 to 55 , and about 30% for those between 36 to 45 . As you can see, these claimants are relatively young.  The incidence rate of diseases such as heart attack and cancer among the young is on the rise. Even a super fit 29-year old professional footballer can collapse suddenly from cardiac arrest (get well soon Christian Eriksen

Inflation, Is It Good or Bad?

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  We are seeing rises in inflation across many major economies. Inflation in the United States hit 5.4% in May, the highest in 13 years. (Source: WSJ) Back home in Singapore, CPI inflation rose 2.1% in April, higher than expected. (Source: ING) Inflation has usually been seen as a bad thing; something that steals money from under our noses, like an invisible thief. However, do you know that inflation can be a good thing too? Just like a gun; inherently, it is neither good nor bad. It all depends on the intention of the user. Law enforcement officers use guns to maintain order. On the other hand, criminals use guns for undesirable activities. Inflation is defined as a general increase in prices. This affects the goods and services that we buy and use on a day-to-day basis. The Consumer Price Index (or 'CPI') tracks a basket of goods and services and compares the changes in price with the previous month/year. If you keep money in the bank, you're probably getting about 0.05%

The Power of Delayed Gratification

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  The Marshmallow Experiment In 1972, Stanford University conducted an experiment on children aged 3-4. Each kid was brought to an empty room with a marshmallow on the table in front of them. They were told that they can either have a marshmallow now or if they waited 15 minutes without giving in to the temptation, they can have 2 marshmallows. Some kids were unable to resist their temptation and ate the marshmallow in front of them. A small handful of the kids were able to stay disciplined and managed to wait out the entire 15 minutes. The Stanford researchers continued to track these kids as they grow up (they would be in their 50s today). What is astounding is the kids who practised delayed gratification are more successful in life. They had higher SAT scores, able to cope better with frustration and stress, more academically and socially competent, and generally better in a variety of life measures. A 2011 brain imaging study on the original Standford participants also showed a mor

Inflation is an invisible thief

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Inflation is an invisible thief. You may not see it or hear it, but slowly and surely, it is stealing your future from you. Rising prices in everything around us, from a simple plate of chicken rice to your million-dollar condominium, reduces the purchasing power of our money over time. Do you know that at an inflation rate of 2.5%, $100k saved in the bank over 20 years would only be worth about $60k! That is a 40% loss in purchasing power!  On the other hand, $100k invested in the S&P 500 (comprising the top 500 companies in the US) would have grown to $318k during the same period. There's no guarantee that you will make money from investing, but you are guaranteed to lose money by doing nothing! Long gone are the days where our grandparents stashed their hard-earned savings into biscuit tins. Banks came along, and it became commonplace to open a savings deposit account instead as they used to pay a decent interest rate.  Today, whereby interest rates are close to zero, keepin

What Singapore’s COVID-19 Response Taught Us About Savings and Reserves

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  "It never rains but it pours" This idiom perfectly describes the COVID-19 situation which hit the world badly at the beginning of the year. Fast forward the months, and we are now in December, a year from the initial outbreak of the novel coronavirus. In March 2020, the World Health Organisation announced COVID-19 as a pandemic, leading to many countries locking down their economies, barring their citizens from leaving their homes other than for essential services, and grinding international travel to a halt. Singapore, the tiny city-state, was not spared. With a tiny domestic market and an economy that is highly dependent on import and export, Singapore’s Ministry of Trade and Industry (MTI) projects that the economy will be shrinking between 6% to 6.5% this year. Drawing from Past Reserves It is reasonable to say that the economic impact would probably have been much worse, if not for the 4 sets of stimulus packages (“Budgets”) to help businesses and individuals w

Don't Spend Money On Things You Don't Need This Black Friday

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Today is Black Friday and there’s many irresistible discounts everywhere. It is probably the best time of the year to buy something you have been eyeing for a while or stock up on necessities and consumables (skincare anyone?). However, unbeknownst to many, this one-day frenzy also creates a psychological effect known as the scarcity mentality . We are afraid to lose out on the  too-good-to-miss deals and make purchase decisions much more loosely than normal. This can influence us to buy unnecessary stuff that we might not even give a second look on any other day. Buying a $100 on a 20% discount is not saving you $20; it’s spending you $80! In the end, we spend more than we save.  So don’t be unconsciously led to waste your hard-earned money on things you don’t need, or already own too much of. Practise responsible consumerism; buy only what you need. Consider giving away or donating your stuff before buying new ones. That way, you prevent the clutter from piling up, freeing yourself f

8 Tips To Help You Be On F.I.R.E

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In case you haven't heard of the F.I.R.E movement πŸ”₯ πŸ”₯ πŸ”₯ , it is spreading like wildfire worldwide right now. For the uninitiated, F.I.R.E stands for Financial Independence, Retire Early . Many have dreamt of retiring early and enjoying the rest of their lives sipping a cocktail on the Bahamas. But dreaming alone isn't going to make it happen - you need to TAKE ACTION! It's hard, but life will be so sweet once you get there. Here are 8 tips to help you get fired up (pun intended πŸ˜† ). #1 - Start saving aggressively I have seen F.I.R.E. advocates saving between 30% to 60% of their income. The more you save, the more you can invest and grow your wealth! #2 - Cut unnecessary spending Live like a minimalist (check out The Minimalists ). Practise delayed gratification - do you really need that Apple Watch now? A dollar that you don't spend is an extra dollar that can be invested to make more money. #3 - Have multiple sources of income Don't depend solely on your salar

Credit Ratings of Life Insurers in Singapore 2020

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This is a follow-up from a post 3 years ago , where I compiled the credit ratings of the life insurers in Singapore, to have an idea of the differences in terms of their credit worthiness. Flawed Assumption People often think that life insurers and the policies they issue are homogeneous (the same), and often compare benefit illustrations as if two companies are going to make the exact same amount of profits, exact same amount of investment returns, have the exact same amount of business operating costs, and et cetera. How far away from the truth that flawed assumption can be.  Every life insurer holds a different asset mix in their insurance funds, and have different profits/returns/costs. Even their shareholders may demand a different dividend rate on their shares. Therefore it is not surprising that life insurers with larger assets and bigger operations in Singapore tend to be the ones rated higher by Standard and Poors (S&P), one of the foremost rating agency in the wo

Is Your Critical Illness Insurance Enough? Here's 4 Steps to Find Out.

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Critical Illness (CI) insurance - most of us have it. And many think that they have sufficient coverage. Besides, who in the right mind would want to sit down with a financial planner and talk about diseases such as cancer, heart attack, stroke, or kidney failure befalling upon us and our family?  Why people don’t buy enough CI insurance  When I meet clients in their twenties, a common response is that they are fit and healthy and nothing will happen to them.  When it comes to clients in their thirties, they would justify that they have housing and family commitments and they would prefer to focus on those at the moment. And since they are still relatively young, CI insurance is not an important priority yet.  When clients in their forties come and see me, they come with sincerity and recognise that illness is fast becoming more of a possibility — they see their friends getting this-and-that. That worries them. However their age is higher now, and so are their insuranc