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Friday, 19 September 2014

Life Insurance with No Commissions (coming soon at a theatre near you!)

I'm not a bleeding heart.

I'm not a Bodhisattva.

I'm more of a man-whore who believes in self-cultivation and walking our own way.

But then, sometimes man-whore also got passion.

So here goes:

Life Insurance with No Commissions 

Old news leh!

Want to bet? 

Those of you studying business finance courses at tertiary institutions, do you know about it? 

Have fun taking a survey on how many of your classmates knew about it? Do exclude the lecturers. Wait you embarrass them and they black-mark you, don't come crying to me!

If this is the reality for business finance students, what more for the common person out there in the workforce? 


These insurance products are only available early 2015 next year....Cheh!

You mean you can make the choices all by yourself already?

For those of you who are still in school or National Service, and will be joining the workforce next year, the timing couldn't be better!

Now you have months to ask the questions you've always wanted to ask (not to me!), do all the research needed to discover what's the critical differences between Term and Whole-life policies. What actual illnesses do this Critical illness rider cover? What is a rider anyway? Etc, etc, etc.

"Free from commissions" means Do-It-Yourself. Which also means if you made the wrong choices, you have no one to blame but yourself!

Of course if you have no time, no interest, or you prefer to have someone tell you what's better for you (The man who wants to buy new shoes) it's perfectly alright to pay someone to make that decision for you, if you so  wished.

For eg, I prefer to buy breakfast from hawker centres in the morning than make one myself.

Now make a wild guess why did MAS only start with Term and Whole-life policies, and with only one Critical illness rider?

What about other insurance enhancements? Why they not included?

In the words of Pua Chu Kang: "Use your brain, use your brain!"

And while you are at it, do ponder on this point 7 from the MAS website (I added the bold fonts):

"7   The sub-limit of $200,000 for whole life products seeks to alleviate the risk of consumers buying whole life products beyond their means and protection needs.  This is because whole life products have higher premiums than term life products, and typically require a longer-term premium commitment.  Policyholders who surrender their whole life policies in the early years of the policy also stand to lose a significant portion of their premium outlay."

Is it because big daddy don't trust us (the consumers) to make our own decisions or they don't have much faith in paid agents to look after the interests of their clients?

Of course they are great professional agents out there; and in all industries, there will be black-sheep.

And there will be consumers who make bad decisions, no matter how much publicity out there :(


  1. Great move by MAS, I think this will rock the boats of insurance companies and agents in particular.

    Maybe when liberalised further, insurance companies can give banks' structured products a run of their money with better yield endowment plans.

    Maybe I think too much...

    The good ones will still survive. Everyone can buy and sell a property on their own, but many still engage a agent nonetheless ...

    1. Sillyinvestor,

      For the man on the SMRT bus, Term $400,000 and Whole-life $200,000 cap should met most of his basic needs.

      If someone wants more bells and whistles, and can well afford it, he has the freedom to top-up the difference with a paid agent of his discretion.

      Big daddy has nudged the insurance industry forward quite a bit in recent years:

      1) CPF Life - moving into annuities.

      One should compare private annuity plans with CPF Life before complaining about the "low" CPF Life payouts for a start ;)

      2) Medishield Life - friendly alternative to private integrated plans.

      It's sad that seven in 10 armed with integrated plans that target Class A wards in public hospitals chose to stay in lower ward classes when hospitalised. Only one in 10 from the same group chose private hospitals. (Source: Medishiield Life Review Commitee)

      Was it the result of snake-oil salespersons that sold these policy holders the idea that since you can't touch their Medisave money, might as well max out our Medisave account to buy the best money can buy?

      Or was it us the consumers to blame? We fall prey to our own ignorance, unfounded fears, and lack of financial literacy?

    2. Actually there are real difference in private and government hospital care.

      I wonder why those who bought private plan still go for lower wards at goverement hospitals. While it is subjective which care better quality care, one thing for sure is different.-- wait time

      If u think something is wrong with u, perhaps cancer? Do u want to wait 1-3 years for a appointment, or do u want to see a doctor on the next few days and get operated within the next ?

    3. sillyinvestor,

      1) For the past 2.5 years, I've been in and out of hospitals with mom. My experience with the waiting time is that it's based on severity of the medical condition - not the money we have in our pockets.

      When the specialist at Alexandra Hospital discovered my mom has acute glaucoma, she pulled out all the stops and referred us to her senior at NUH hospital so we can operate on her eye ASAP. The operating theaters at Alexandra Hospital were fully booked....

      I must speak up for our medical heroes (doctors and nurses) working at our public hospitals!

      2) I challenge you. Was it first hand experience with your love ones when you say we may have to wait for 1-3 years at public hospitals when we our medical condition requires an operation the next week?

      Or was it based on hearsay and/or unfounded fears?

      Sorry to be a bit harsh on you. What you say is exactly what I as snake-oil salesperson will say to convince my clients to sign up for integrated plans....

      3) Why those people who bought integrated plans did not opt to private hospitals or stay at Class A wards at public hospitals?

      Yah! Why after paying these extra premiums from Medisave all these years, when you can make a claim, these policy holders opt for the lower wards at public hospitals and the strangest of all...

      Why only 1 in 10 choose to stay at private hospitals!!!???

      Didn't they sign up for integrated plans so they can AFFORD to stay at private hospitals? (Premiums down the drains?)

      4) I wanted to bang your head and tell you the answer! But then it would be unfair to you...

      If you discover the answer yourself, your "paradigm shift" moment would be deeper.

      I like you too much to steal that from you.

      (But please don't stand too close)

    4. Aiyo 1-3 weeks la, I drama la...

      But seriously, first hand.

      My dad. Supposed to do a balloon operation. Ya, like what u say, it's not life threatening yet.

      He supposed to "check in" one day prior to the operation, to fast and do precheck.

      At NUH, the appointed time is 10 a.m. He waited until 7 p.m

      When the operation is done, he stayed in ICU for 1 day and on the second day HDU and the third, normal ward. He can sit up and chat with us on the third day but is still weak.

      The doctors came and say he can be discharged the evening. All of us got a shock. I know the hospital need the beds, but my father is not in conditions to go home, he can't even walk properly assisted. He ask for one more day and the doctors agree but were rude and say why wouldn't u want to go home.

      Let's go to A and E, my sis went to A and E twice, I spent the whole morning waiting for results of blood and only in late afternoon is she treated properly and later discharged in the late afternoon.

      I was still young then, when both incidents happen. Things might have improve.

      I then get first hand experience with private caregivers when I know my wife.

      First, the food served is way different in quality.

      The next important thing, when my sis is working and still vomit and cough and is weak, I send her to Aand E again. She ask me to send her to mount E, she has a private plan. She was attended to and warded in 1 hour.

      I ask my MIL to go for Government specialist clinic, the wait time for appointment are 2-3 weeks.

      My FIL had that experience too. During the wait, my MIL supposed to have high Timor blood count, again perhaps like I said it is not life threatening yet, but the appointment is again 2 weeks away. During the wait, all are just anxious and wondered if things have spread.

      Of course perhaps the doctors know better, because in the end, there is nothing wrong and my MIL was asked to come back for a check 6 months later.

      So the next time some thing grow on my MiL back and is start to Liu nong, and the GP suggested specialist care, my MIL just went private.

      Don't worry SMOL, I can take harsh... Slap me LOL.

      My experiences are shaped by my first hand experiences, but like what u say, my first hand experiences are years ago and might not be severe enough.

      Buy ask me again if wait time is different, and if it means enough for u to pay more for hospital plans, and u think yes. That u are paying for what u want. If waiting in the unknown does not bother, then maybe ....

      I used to think, money is really classifying everyone due to my hospital experiences... Especially with my dad.

      Last experience, my dad last operation. The doctor adviced him to fix a appointment for operation immediately. I remembered he said something like he is free that week itself or the next. My dad says he want to think about it.

      Fast forward 10 years, my wife grandma vomit, send to private, it is said the intenstines got mess up, ask family for agreement to operate on her since she is old. When they agreed, she is operated on the next day...

      Maybe still no paradigm shift ... Of course, dying person get immediate attention everywhere. Other than that, there is a difference in wait time.

    5. Sillyinvestor,

      1) This what I am after.

      1-3 weeks and non-life threatening condition is worlds apart from1-3 years and emergency case.

      Now go face the wall and reflect why instead of sharing first hand experiences, you "puffed up the truth"?

      Lucky you only posted here in comments. Imagine if you had written like that in your blog? I'll really shout "Emperor has no clothes" in your face!

      2) Of course the waiting time is longer at public hospitals.

      There's a difference when you schedule appointments to see 8 patients per day versus 16 patients per day.

      With the former, you'll get less chances of time overruns.

      A bit interesting after all the huffs and puffs, it falls down to "waiting time"....

      3) You're not a good listener.

      The "paradigm shift" is for when you find out WHY those policy holders who paid for integrated policies opted for lower class wards and public hospitals instead?

      I didn't ask the question. You did. Remember?

      You tell me the logic of paying the extra premiums and opting to go for longer waiting times at public hospitals?

      What they planned and what they do is completely different!?

      So much for "planning"...

    6. Hi SMOL,

      I red faced. I know what u are driving at.

      We are talking about different things. LOL

      U are talking about snake-sales they didn't even let their clients know what are their benefits.

      I am saying there is really a difference in private and government care, if u value time over money, and do not like the anxiety during wait time, it is perfectly ok to pay for it.

      If planners ask such questions forefront, and people pay for less wait time, then it's good and fair, everyone get what they want.

      If they sell saying medisave put in CPF also no use then of course it is wrong.

      But I still think, If I sell in the line of wait time and anxiety during wait time, I am doing a service of giving my cilent the whole picture. Fine if she / he still opt for government and save some money, but nothing unentical if u ask me.

      Yo chill la... U know i not in this line, I snake head for who, anyway, if I say I mean to write weeks but type wrongly, but leave it when I discovered it, as I thought everyone will just think it is drama mama, but will still get the point that about wait time. That's what happen, no real intention to puff, but no problem if dun believe me. I think I need to explain to get past myself only. Others can doubt. Which is really what I am saying

      Ok ok. I go reflect in front of a glass panel. My iPhone Liao ...

      Emperor no clothes !!

  2. How many people really know what they bought into? I believe most don't even know the difference btn whole life, endowment and term!
    As usual the most dangerous agents are the relatives...

    1. WolfT,

      In our corporate lives, we know the meaning and practice of treating related parties at arm's length.

      But when it comes to our private lives and kins...

  3. A good reminder post.

    From personal experience, when my mother needed a surgery, we went for a walk in.

    There are 2 (generally) ways: walkin or polyclinic referral. That results in unsubsidized and subsidized rates. Some hospital staff call this private and public.
    This is for public hospital.

    The unsubsidized rate takes longer, maybe 1 to 3 months to make an appointment from the polyclinic.

    Hospital beds at govt restructured hospitals are low in quantity. Some areas are underserved; hence new ng teng fong at jurong.

    Private hospitals are at a premium price. Plus you need to put a deposit of $20k generally. Take me for example, if I have a viral high fever, nothing that goes beyond $10k ( assume 1 to 3 days) I will go a private hospital. Chiak that comfort, no point takin an bed from others who need it at public hospital. My hospitalization insurance will waive that deposit and pay out the claim before I need to pay the hospital.

    If I have a longer term illness, brain tumour, I hope I have the clarity of mind to go public for longer stay, my own insurance pay me extra $ per day for choosing a lower ward. If I find the doctor a bit new, I hope I am not too stubborn in seeking 2nd opinion (just opinion first) at an acclaimed doctor who may have chosen to practice at a private hospital (you find these often do so out of a variety of reasons).

    But that is just me. Because of the terms and conditions I have on my insurance.

    Those who want to save a bit or decidedly on govt res hospitals for life, could just get a lower plan if they like. Or not.

    1. SMK,

      I find your comment fair, balanced, and well thought out.

      I think readers should read and re-read it again; it's not always private is better in all cases ;)

      When it comes to medical conditions/emergencies, I do share your hope that we have clarity of mind.

      Saying it is easy; the truth is when it hits close to home, we all want to be treated like the centre of the universe...

      You have a good day!

      I got to go for my weekend work now...

  4. KPKB can says he spent $8 (IIRC) for bypass-heart surgery, can you say the same thing. In fact how many can say that?
    Not only different strokes for different folks always apply but also "All animals are equal. Only some are always found to be more equal than others"
    And can you deny money can solve problems is not a problem (for moneyed people)?
    We all have our own illusions in the world we live in - only some of the illusions we think it is real. We can't blame anyone, can't we?
    May be we all need some illusions(aka dreams) to live from day to day. Maybe?

    1. temperament,

      I am not blind to the truths you are alluding to.

      It seems quite a lot of those policy holders who bought integrated policies were under the illusion that by depleting their Medisave account to buy something they can ill afford in the first place, this sort of "magically" elevates them to the ranks of those who are "more equal" than others.

      The prickling of this denial happens when they are hospitalised...

      If buying insurance can increase networth, everyone just have to buy a few policies and were are instantly financially free!?

      Little lies we tell ourselves....


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