Careshield Life New Updates

Why you shouldn’t pay $200 for your Careshield Life

In 02 Sept 2019, The Singapore Parliament approved Careshield Life. This is the 3rd Shield that Singapore has to prepare our population in this aging economy. We will be covering how will Careshield Life be part of our Wealth Management journey and whether it will be enough.

Careshield Life New Updates

Careshield Life New Updates: My Letter

 

What is Careshield Life?

CareShield Life provides Singapore a Lifetime* payout of $600/month up to $1200/month** in the event of severe disability. The premiums can be fully paid by Medisave. The government ensures that no one will lose their coverage due to financial difficulties. The claim will be eligible if a person is unable to perform at least 3 out of 6 activities of daily living.

Careshield Life New Updates Activities of Daily Living

Careshield Life New Updates Activities of Daily Living

*As long as the insured remain severely disabled
**Estimated payout if increase at 2% a year

 

Why will you need it?

I hope you can agree with me that once a person is unable to perform 3 out of 6 activities of daily living, he/she probably will need help to maintain and sustain his/her life. In the 3 Lessons I Learnt From Critical Illness Survivors and Family Members, I learnt that a family member typically have to help the survivor for at least 6 months or until the treatment is over. If the disability is prolonged, most of them will choose to employ a maid to take care of them.

In recent years, the monthly recurring cost of hiring a maid (excluding the one time cost such as plane tickets, etc) is easily more than $800. This does not include other options like nursing homes, home and community care, transport, consumables and so on.

Based on AVIVA’s Long Term Care Study 2011 showed that claimants on average required about $2,150 per month to pay for a domestic helper or nursing home, transportation to and from the hospital for treatments or physiotherapy, mobility aids, as well as daily expenses and bills.

A Department of Statistics Singapore paper published in 2011 showed that, in Singapore, more than a third of caregivers had been providing care to their recipients for over a decade.

In the Eldershield Review Committee Report in 2018, 1 in 2 healthy Singaporeans aged 65 could become severely disabled in their lifetime.

With the statistics stacked against you, I personally think that the $600/month from Careshield life will not be enough.

 

Careshield Life New Updates Cost

Careshield Life New Updates Cost: Photo Source

 

I already have insurance that covers for TPD. Why make me buy this?

TPD or total permanent disability will only have a payout when it is permanent (As the name suggest. For the avoidance of doubt, please check your individual policies for the definition). If the condition is not serious enough, there may not be a claim from TPD. Careshield Life provides monthly pay outs as long as you are unable to fulfill 3/6 Activities of Daily Living either temporary or permanent. Other common severe disabilities includes the following:

  1. What if there is an amputation that is because of diabetes?
  2. What if there is an accident or degeneration of muscle?
  3. Progression of illnesses such as dementia?

 

What should you do?

If you are age 30 – 40 now, welcome to Careshield Life. It is compulsory. Those that are in eldershield (1979 and before), you can get incentive when you switch over to Careshield Life by by 31 Dec 2023. You can find out more here.

 

Final Thoughts

Personally, I think this is a great initiative by the government to address the needs of the aging population in the years to come. Those who are between 30 to 40 will probably be shocked (or pleasantly surprised) to receive this letter in the next few days.

You shouldn’t be paying only $200 for careshield. I think we should pay more for more benefits.

Long Term Care is part of your Wealth Management, speak to your financial advisors for future clarification.

 

No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about Wealth Management, I hope to nurture genuine relationships with all of my readers.

Check out my most popular blog post in 2020 so far: 5 mistakes people make using their CPF.

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SNACK BY INCOME NTUC REVIEW

SNACK By Income NTUC Review

I’m really excited when the insurance industry comes up with a new disruption. I believe that with disruption, there will be improvements in the overall industry. Today, I will be reviewing SNACK BY Income (NTUC) proposition to see if we can fit it inside our Wealth Management Journey.

[All opinions are my own. Please read my disclaimer section to find out more. If it matters, this is not a sponsored post]

 

SNACK BY INCOME

SNACK BY INCOME NTUC REVIEW

SNACK BY INCOME NTUC: REVIEW

SNACK By Income is a “new” insurance model by allowing customers to buy micro-insurance when one of the lifestyle triggers happens.

This means that you buy insurance (Death, TPD, Critical Illness or Accident with premium of $0.30, $0.50, $0.70 which is automatically deducted) whenever a lifestyle triggers happen (Clock Number of Steps, Take Transport, Buy Food & Drinks, Shop, Groceries, Watch Movies, Top Up Petrol, Pay for Utilities). You can decide on which triggers to allow the purchase of Insurance to happen.

There are caps at how much you can stack your micro-insurance and I believe the premiums divers depending on age of the individual. You can stop or pause the purchase as and when you want.

 

Let’s Give An Example

Example: Joanna set up his Snack By Income to deduct $0.50 for Transport and Buying Food and Drinks. During the course of the day, she takes a bus to work (first premium deducted), had lunch (second premium deducted) and then takes a bus back home (third premium deducted).

SNACK BY INCOME NTUC Example

SNACK BY INCOME NTUC: Example Normal Day Out

Each activity triggered a S$390 personal accident insurance plan with a premium of S$0.50 each. (Source: Mothership).

In total, she spent $1.50 for that day and got $1170 worth of personal accident coverage.

In a month, she would have spent $45 (30 days in a month assumption) to have $35,100 worth of personal accident coverage.

 

What I like about SNACK BY INCOME

  1. I think it is a good initiative to expose people to insurance at any age. The gamification process will attract the younger generation to look into what insurance they can have.
  2. The level of commitment of SNACK By Income is very low. The range of $0.30 to $0.70 is a very low barrier for people and they may allow the deduction to continue to take place. The premiums are also single premium in nature so the micro coverage can continue for the next 360 days without the need to continue paying for it.
  3. It is flexible. You can choose the coverage you want, start the deduction, set a weekly limit or stop the deduction at any time with no penalty.
  4. If you are afraid to approach a Financial Advisor, SNACK By Income is a APP which might be perfect.

 

What I don’t like about SNACK BY INCOME

  1. Using my example above, $45/month can get a person a comprehensive accident coverage AND (potential) pay for his hospital shield rider’s premium. If she is going to set triggers for those deduction above, I believe she is might better of with the usual insurance plans.
  2. The illusion that “They have a lot of insurance”. Snack By Income (if I may) is a bonus coverage for people to have. The micro-coverage terminates after 360 days and you have to “re-stack” up your insurance again.
  3. Commitment Issues. I worry about this most. If this creates a behaviour that they don’t have to committed to their premiums, I believe it might have a spill over effect to other things in life. (Snack by Mortgage Anyone?)
  4. Buying insurance is NOT financial planning. I think most people think that buying insurance is financial planning. In actual fact, it is just part of financial planning. There are many other things to plan for other than insurance.

 

Final Thoughts

When NTUC first launched Snack By Income, it triggered my memory of an old client of mine and I felt it may be the most suitable for them.

I first met this couple when they needed my help to do a claim. The wife works at Sheng Siong as a cashier and the husband worked as a taxi driver. They live in a HDB 3 room flat with 2 young children. The husband was down with stage 4 Colorectal cancer and had to stop working as a taxi driver.

While doing the claim, the wife showed me her bank book. I was surprised and asked her what she wanted me to see. I saw her bank balance is $1000 and she told me that she is making $1000/month as a cashier and spent around $1000/month for household expenses. With tears in her eyes, she asked me if she can purchase any insurance with that money. I knew that any insurance however good, will not be sustainable.

I believe that micro-insurance will be able to help this couple as they can choose to purchase the micro-insurance as and when they have the available budget. I believe these people will be the true beneficiaries of Snack By Income. Thank you NTUC.

 

No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, I hope to nurture genuine relationships with all of my readers.

Check out my most popular blog post in 2020 so far: 5 mistakes people make using their CPF.

Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page or my Telegram Channel! Or subscribe to our newsletter now!

What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business Phew

What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business?

In Wealth management, one of the major expenditure is on insurance policies to protect your downside. In the recent case for AXA, they are considering to sell of their Singapore’s business unit, this lead to some people questioning what will happen to their insurance policies when they sell away their business.

What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business Worries

What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business: Worries

 

Why do they want to sell away their business?

Before we explore what will happen to our insurance policies after the companies sell that business away, we need to explore why would they even want to sell that business unit away if it is profitable.

It could be any of the following reasons:

  • Business strategy has changed
  • Raise funds to divest for peripheral operations (This is AXA’s cited reason)
  • Concentrate on other business lines
  • Focusing on other geographical markets
  • Being offered a good price / Cashing out on business

The list goes on. Insurance companies also acts like normal businesses and they will probably consider the sale of that business unit when an opportunity arises.

 

Is this the first time it happened?

It happened various times in the past and I believe this will happen again in the future.

In 2003, John Hancock was bought over by Manulife.

in 2007, TM Life Asia was acquired and now known as Tokio Marine Life Insurance Singapore Ltd.

In 2010, UOB Life sold away their life insurance unit to Prudential.

In 2018, Zurich Life was bought over by Singapore Life.

Under going discussion since 2019, AVIVA is considering to sell it’s Singapore/Vietnam business unit.

Under going discussion in 2020, AXA is considering to sell Singapore’s business unit. (Special note: AXA mentioned they will not be selling their Singapore’s business unit in 28 Dec 2017)

You can see that there is a fair amount of transaction that took place in Singapore shores as well.

 

What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business?

I think that’s the key to the topic today. I have contacted the Life Insurance Association of Singapore (LIA) to confirm above. This is their response. I will bold the information that is relevant to consumers.

All insurers are licensed and are regulated by the Monetary Authority of Singapore via the Insurance Act, and its subsidiary legislation, and regulations. Due to the long term nature of life insurance policies, there are provisions* in the Insurance Act which the licensed insurer has to comply with, in an event of a voluntary transfer of business or re-structure of business or business failure, to safeguard the interests of policyholders. Refer to *Part IIIAA on Transfer of Business and Shares, Restructuring of Licensed Insurer and Winding Up.

Business Transfer (Buy-Over)

Depending on the deal agreed between the two parties, the buying insurer will generally become responsible for all policies of the selling insurer. For the individual policyholder, his policy’s terms and benefits will be unchanged, and will continue to be honored by the buying insurer.

In short, suppose you hold a policy issued by Insurer A. Insurer A is sold to Insurer B, Insurer B will become your insurance company. Your policy, now under B, will be untouched and will be made good by B.

What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business Phew

What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business: Phew

 

Conclusion

Your policy will still be in-force and be taken care of the new insurer. The next question will then be who will be taking care of your insurance policy from then on?

 

No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, I hope to nurture genuine relationships with all of my readers.

Check out my most popular blog post in 2020 so far: 5 mistakes people make using their CPF.

Please feel free to contact me on my  Facebook Page or my Telegram Channel! Or subscribe to our newsletter now!

3 Lessons I Learnt From Critical Illness Survivors and Family Members Being Strong

3 Lessons I Learnt From Critical Illness Survivors and Family Members

In July 2020, I had to honor to interview Critical Illness Survivors and their Family Members. I interviewed a Daughter whose mom suffered from a stroke, a 2-time breast Cancer Survivor and also a Father who’s son had Leukemia (Blood Cancer). After the 3rd interview, I noticed a consistent trend that all 3 exhibit and how they manage the whole journey in their family planning or wealth management.

I want to thank Angie, Grace and also Sean for their selfless sharing so that more people can learn what they went through. We also pray that you won’t need to use this lessons in future.

Thank you.

 

Lesson #1: It starts of with pain

In my interview, I realised that it starts from with some unexplained pain at a particular body part. Most of the time, it was brushed aside or just thought that it was harmless pain. Very commonly, the person will feel more tired than usual.

Pain is an message to your body that something is wrong. Please do not ignore it.

3 Lessons I Learnt From Critical Illness Survivors and Family Members Pain

3 Lessons I Learnt From Critical Illness Survivors and Family Members: Pain

 

Lesson #2: Seek Support

This was the most important when it comes to recovery. The journey of critical illness could be confusing, overwhelming and devastating. The right support could ease the journey where every single step is already well planned out. The Children Cancer Foundation and the Breast Cancer Foundation specifically named in my interview for being very meticulous. These societies impacted their lives so much that they continue to donate or give back till today.

“Please don’t stay in a private ward” 

Even though your hospital entitlement might be a single bedder, staying in hospital with no other people to communicate with and journey together might give the feeling of being alone and that’s the last thing we want. Talk to people, listen to their journey, know that you are not alone.

Seek out your friends, family and GOD.

3 Lessons I Learnt From Critical Illness Survivors and Family Members Support

3 Lessons I Learnt From Critical Illness Survivors and Family Members Support

 

Lesson 3: Be Financial Prepared

Whether you are a parent or a child, a critical illness will rob your time off work and saving. Fortunately, my interviewees bought insurance to protect their livelihood, money and especially time so that their loved one can spend time to journey together with the patient. Grace’s husband was able to step away from work for half a year so that he can accompany Grace during her treatment. Sean was able to spend time with his son during treatment times as well.

The hospital bills will be scary. “It is easily more than $500K a year”.

Be financially prepared even before it happens.

3 Lessons I Learnt From Critical Illness Survivors and Family Members Bills Shock

3 Lessons I Learnt From Critical Illness Survivors and Family Members Bills Shock

 

Bonus Lesson #4: Keep yourself in good condition

As a caretaker, parents or child, keep yourself in good condition. You need to be in the best condition physically and mentally to bring your family out of this. If you want to blame and punish yourself for what has happened, punish yourself by keeping yourself in a good condition and take responsibility to bring your family out of this.

You need to appear strong in front of your child, your spouse or your parents so that you can give them the confidence that everything will be alright.

3 Lessons I Learnt From Critical Illness Survivors and Family Members Being Strong

3 Lessons I Learnt From Critical Illness Survivors and Family Members Being Strong

 

Conclusion

Don’t ignore pain, seek support and be financially prepared.

Thank you Angie, Grace and Sean for the inspiration for me to write this article. You can view the replay below.


No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, I hope to nurture genuine relationships with all of my readers.

Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page or my Telegram Channel! Or subscribe to our newsletter now!

Critical Illness Definition Changes Aug 2020

Critical Illness Definition Change Aug 2020: Should You get CI Coverage now?

Have you been thinking of getting a Critical Illness (CI) Coverage for a while but haven’t done so? In Wealth Management, insurance is one key element of planning and we have talked about Life Insurers to change definition of Critical Illness in 2019. In 3 months time, there will be new definition for critical illness coverage. Will it affect you? Should you get a CI coverage now?

Critical Illness Definition Changes Aug 2020

Critical Illness Definition Changes Aug 2020

 

What’s happening?

Like it or not, it is happening. Life Insurers in Singapore will have to comply with the new set of critical illness coverage as set by the Life Insurance Association (LIA). Previously, the definition of the 37 critical illness was standardized so that the coverage is consistent across the industry.

This review on the common definitions is to bring the definition up to date and aligned with advances made in medical technology and medical practice as well as to address areas of ambiguity based on insights gained from the past five years of experience.

(Source: LIA 2019 Framework)

 

What are the changes?

In total, 21 of the critical illness definition will be changed while 16 remains the same.

Critical Illness Definition Changes Aug 2020 Table

Critical Illness Definition Changes Aug 2020 Table

 

Does this mean it is harder to claim in future?

After looking at the definitions, I believe there are pros and cons to the new definitions.

Pros

  1. Those suffering from Thalassaemia Major or Haemophilia can now get covered under the HIV CI condition.
  2. Viral Encephalitis: Previously, viral infection has to be the cause for it. Now, scope is expanded to include all causes, not just viral infection.

Cons

  1. Stricter, more exclusions for Benign Brain Tumor, Coma, Stroke, Aplastic Anaemia, Heart Attack, and Major Cancers among other things.
  2. The addition of ‘irreversible‘ to deafness, blindness, aplastic anaemia.

 

Personally, I believe the cons outweighs the pros because the more major cancer, heart attack and stroke have a higher occurrence rate in Singapore. (Source: Top 10 Conditions for Hospitalisation In Singapore). See point 2, 4, 6, 9.

Critical Illness Definition Changes Aug 2020 Top Causes of Hospitalisation

Critical Illness Definition Changes Aug 2020 Top Causes of Hospitalisation

 

What should you do?

You have time. But, not long. After 26 August 2020, all critical illness policies in Singapore will have to follow the new definition as stated by the LIA.

Review your policies during these few months. Follow up with your financial consultant or you can contact me if you don’t have one.

Stay safe!

 

No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, I hope to nurture genuine relationships with all of my readers. Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page or my Telegram Channel! Or subscribe to our newsletter now!