Know The Typical Features Of Critical Illness Insurance

When you hear the term “Critical Illness Insurance”, what comes to your mind?

If you are envisioning a coverage which offers a payout when the policyholder is diagnosed with a critical illness (e.g., stroke or cancer) then, you are correct!

Critical Illness Insurance or Dread Disease Policy is a lump sum payout given in the event that the policyholder is diagnosed with one of the specific illnesses covered by the policy. It can either be sold as a stand-alone policy or a part of a main policy in life insurance or investment insurance. The guidelines and definitions of the 37 critical illnesses are predetermined by the Life Insurance Association of Singapore. This definitions are fixed across the board.

Unlike other forms of health insurance, the benefits of Critical Illness Insurance is paid out in lump sum so that the person can use it not only for medical expenses but also for other living expenses that can result from the ongoing treatment.

COMMON FEATURES

Here are some of the usual features of the Critical Illness Insurance:

1. Its premium is adjusted based on the policyholder’s age-band.

2. The policyholder is allowed to claim no more than one of the critical illnesses listed.

3. There are no restrictions on the utilization of the benefit payment.

4. The critical illness rider will be terminated once you give up the basic policy.

5. A type of health insurance (with a critical illness rider) has an expiration once the policyholder reaches a maximum age.

6. To reduce the risk of moral hazard, there is a limit on the total amount that you can purchase.

7. Upon purchasing the Critical Illness Insurance, there is a waiting period before you can make a claim.

POSSIBLE ISSUES

Given the fixed definitions of the critical illnesses as well as the common features of the Critical Illness Insurance, there are several issues that can possibly happen in different situations. For starters, the benefits can only be paid if the disease EXACTLY meets the standard definition stated by the policy.

For example: Coma is defined as…

“A coma that persists for at least 96 hours. This diagnosis must be supported by evidence of all of the following:

• No response to external stimuli for at least 96 hours;
• Life support measures are necessary to sustain life; and
• Brain damage resulting in permanent neurological deficit which must be assessed at least 30 days
after the onset of the coma.

Coma resulting directly from alcohol or drug abuse is excluded.”

In reference to the definition above, say your beloved spouse had been in a state of coma for the past 48 hours due to substance abuse and you cannot do anything about it because he is not qualified to claim the insurance payout. It will be difficult for you to fork some money at a relatively short notice.

Another issue that can happen is when two or more diseases transpire (co-morbid diseases) and you can only claim for one of it.

Image Credits: pixabay.com

Image Credits: pixabay.com

Furthermore, claiming of the benefits usually has a waiting period. If a critical illness is carried out during the waiting period then, you cannot be paid for its benefits.

Sources: 1, 2, & 3

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Details of 2016 GST Vouchers Benefits To Be Sent Out by 1 Jul 2016

GST Voucher Featured

The Ministry of Finance has announced in a press release that 1.54 million Singaporeans will receive a letter by 1 July 2016 with details on the 2016 GST Voucher Benefits (GSTV) as well as information on other Budget benefits such as Service and Conservancy Charges (S&CC) rebates, U-Save and Medisave Top-ups.

1. GST Voucher – Cash Payment

About 1.3 million eligible Singaporeans will receive up to $300 in GSTV – Cash. In addition, as announced at Budget 2016, a one-off GSTV – Cash Special Payment of up to $200 will be provided to support households amid current economic conditions.

This means that eligible GSTV recipients will receive up to $500 in cash in 2016, which will be disbursed in two payments in August 2016 and November 2016.

2. Medisave Top-ups

About 425,000 Singaporeans aged 65 years and above will receive the GSTV – Medisave of up to $450 in August 2016. In addition, Singaporeans born on or before 31 December 1959 (57 years and above in 2016) and do not receive Pioneer Generation (PG) benefits will receive a Medisave top-up of up to $200 each year till 2018. The top-up for this year will also be made in August 2016.
In total:

  • A non-Pioneer aged 65 in 2016 and who is living in an HDB flat (and does not own a second property) can receive $450 of Medisave top-ups this year.

Pioneers would also be receiving their PG Medisave top-ups of $200 to $800 in July 2016. Taking both the PG Medisave and GSTV – Medisave together:

  • A Pioneer aged 70 in 2016 who is living in an HDB flat (and does not own a second property) will receive $450 of Medisave top-ups;
  • A Pioneer aged 85 in 2016 who is living in an HDB flat (and does not own a second property) will receive $1,250 of Medisave top-ups.

You can also refer to the infographic by MOF below:

GST Voucher and other Budgets MOF

More information on Assessable Income and Annual Value of Home:

To find out how much you are eligible for, you can log on to https://www.gstvoucher.gov.sg with your SingPass.

You will then see something like this:

GST Voucher Eligibility

* Remember to update your payment mode.

Details on the GSTV can be found at www.gstvoucher.gov.sg, and information on the other Budget benefits can be found at www.singaporebudget.gov.sg. If you require more information, the contact details are as follows:

gstv

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Brightest Financial Nuggets From Acclaimed Dads

A man who exercises parental care over other people and acts as a protector or a provider – that is the textbook definition of the word FATHER.

But the real nature of a father and his child is more complex than that. My father was the first person to tell me that my dreams are valid. He taught me how to deal with difficult people and to laugh at life’s problems. He worked hard to ensure that I finish my studies on exclusive institutions despite how hefty the costs were. Truly, my father is an amazing human being and I am proud to call him my DAD.

Like my dad, most of the fathers out there are great at giving advice about work, love, and money. Their advice may be clichés at times but the wisdom that they passed on often sticks with their children. So in the cheerful spirit of Father’s Day (June 19), I present you some of the brightest finance advice from experienced dads…

1. KNOW WHAT AN ASSET IS

Robert Kiyosaki, the author of Rich Dad, Poor Dad, believes that it is important to “know what an asset is, acquire them, and become rich.” Its premise is simple. To become financially independent, you must acquire income-generating assets which can pay for all your expenses. The only problem is that some people do not know how to differentiate between an asset and a liability. Instead of purchasing equities or bonds, these people purchase iPhone and MacBook.

Image Credits: pixabay.com

Image Credits: pixabay.com

2. MAKE MONEY WORK FOR YOU

David Richmond is the founder of a financial planning firm called Richmond Brothers, while his father worked in the insurance industry throughout his life. David’s dad reminded him that there are two ways to make money: to earn it or to grow it. Merely working for it and witnessing it grow can be hard as you can only work so much. This is why you must incorporate the two ways. Your hard-earned money must be saved and be able to grow with an interest.

3. WORK HARD DOING WHAT YOU LOVE

How does one begin to describe the powerhouse that is Donald Trump? For starters, he is running for United States’ 2016 Presidential election. But he is best known as a businessman and a television personality. His father, Fred Trump, was the original real estate tycoon in the family. He owned the company Trump Management Co. where Donald first worked for. Despite the “scandals” that Fred have been through in 1954, he bounced back and built affordable rental housing system in New York City.

Donald Trump was once quoted saying: “My father didn’t give me much money, but what he did give me was a good education and the simple formula for getting wealthy: Work hard doing what you love.”

4. DO NOT SWING AT EVERY PITCH

The iconic Warren Buffett once gave an advice to his son Peter Buffett about investing: “You don’t have to swing at every pitch.” It is direct yet full of substance. When investing your wealth, it is important to wait for opportunities that fit your criteria (e.g., your needs and personality). And if nothing of that sort comes along, you must wait patiently and practice perseverance.

Image Credits: pixabay.com

Image Credits: pixabay.com

Sources: 1,  2, & 3

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How Much Shall You Spend On A Gift Without Looking Cheap?

While scouring the land for the one-of-a-kind gift, keep in mind that you must remain financially savvy. You may be tempted to go over your budget since you want to make the recipient feel special or you do not want to come across as being cheap. However, your gifts need not to be expensive to put a smile on someone’s face.

It is hard to put an exact price tag on the perfect gift as it all depends on a set of factors, namely: the amount you can afford, the budget you set, the current occasion, and the giver’s relationship with the recipient.

THE AMOUNT YOU CAN AFFORD

I read a good financial nugget from Manisha Thakor of The BAM Alliance. She said that if you cannot afford to buy the item in cash at the very moment then, you cannot afford to buy it. Simply, she wants us to be realistic when it comes to what we can and cannot afford. So if you are shopping in the mall, it is best to use mainly cash to regulate your spending. And if you are shopping virtually, convert that money as a gift card. When the gift card is maxed out, you will be done shopping.

THE BUDGET YOU SET

Just because the person gave you a lavish gift does not mean that you must do the same. If you budget does not allow you to go beyond S$50 for a gift then stick with your limits. Being stuck on debt just to keep up with a superficial appearance is never worth it.

If you are following a strict budget, you can allow your creative juices to pump. For example, your make-up obsessed best-friend wants to purchase the ridiculously costly and highly sought-after Kylie Lip Kit. You know that the product and shipping costs will exceed S$50. Then, you searched online for quality yet affordable dupes (equivalents) such as the NYX’s Soft Matte Cream lipsticks. These only cost S$12 so you went to Sephora and purchase four beautiful colors!

THE CURRENT OCCASION

The current occasion also dictates how much you shall spend. To illustrate this, let us take the Singapore’s “red envelope” gifting tradition into the table. For Chinese New Year, an amount of S$2-20 is common to give for children while it ranges to about S$8-S$88 for adults. On the other hand, the minimum Ang Bao amount for wedding banquets is S$50. This is why it is important to take the nature of the occasion into account. For corporate events, you can consider shopping from specialized online stores that offer corporate gifts or door gifts.

THE RELATIONSHIP WITH YOUR RECIPIENT

To whom is the gift for? How close are you to him or her?

Image Credits: pixabay.com

Image Credits: pixabay.com

When it comes to giving the “perfect” present, it really is the thought that counts. If you are able to purchase a gift that translates how well you know and care about the person, you have done your job right. Start by determining what the person’s hobbies and interests are. From there, you can think of some gift ideas that will fit your budget.

Sources: 1 & 2

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What On Earth Is A Sharing Economy?

Is it possible to live in a world where you can carpool with a stranger during an emergency? How about dining at someone’s home or hiring an experienced chef with a swipe of a finger?

With a “sharing economy”, all these are possible!

According to Investopedia, a sharing economy is…“an economic model in which individuals are able to borrow or rent assets owned by someone else. The sharing economy model is most likely to be used when the price of a particular asset is high and the asset is not fully utilized all the time.”

United States, Europe, Seoul, Australia, and other parts of the globe have shifted from a consumer market to a sharing one. In these places, people use technology to rent, lend, and exchange goods and services rather than purchasing them from shops or companies. Considering the scarcity of some resources in the country as well as its technological advancements, experts suggest that a sharing economy is an untapped realm with great potential for Singaporeans.

April Rinne, a consultant and World Economic Forum Young Global Leader, expressed that a sharing economy can help a society to become more sustainable. And is it not what Singapore aims to accomplish?

In fact, in the Sustainable Singapore Blueprint 2015, the state set up a collective vision that includes being a zero waste nation by 2030. A sharing economy fosters activities that enable people to share and earn income from underused assets such as apartments, cars, clothing, and tools.

There are several benefits that a sharing economy can bring to a nation such as reducing environmental waste impact, redefining the materialistic ideal, increasing efficiency in transport, as well as cutting energy and water consumption.

Sharing economy helps to reduce the environmental waste impact and extend the longevity of items. For example, The Freecycle Network™ allows people to give and receive re-usable items to divert them from the landfills. 9,104,727 users post ads of pre-loved items and give them freely to people that would want to take it. Interestingly, I saw one post from Singapore that offered “lofted twin beds with desks underneath”.

A sharing economy also helps to redefine our materialistic ideal as it encourages to sell or share our possessions. You see, we grew accustomed of having material goods as a measure of success. We believe that the more we have, the more society will perceive us as wealthy and happy. But the truth is, having all these designer goods or lavish cars will never satisfy us. It will only make us craving for more. In a sharing economy, you can easily buy and rent clothes online.

Aside from sharing our possessions, a sharing economy supports the idea of community transportation. By community transportation I mean that people can rent cars from companies, carpool with strangers, and pay for a ride from the people in their neighborhood. A good model for this is Uber. Uber allows you to get a taxi or share a ride with other people through a mobile service.

Lastly, a sharing economy allows you to cut on the accommodation costs as well as energy and water consumption thru services like Airbnb and Couchsurfing. In 2014, a study found that sharing homes had considerably lesser energy and water consumption, greenhouse gases, and accumulated waster compared to hotels. The current situation of home sharing in Singapore depends on the Urban Redevelopment Authority (URA). The URA is re-assessing the law which considers that it is illegal for an individual to rent out their home for stays shorter than 6 months.

Image Credits: pixabay.com

Image Credits: pixabay.com

For individuals, companies, and the society at large, a sharing economy presents a myriad of opportunities to invent new streams of revenue, solve social issues, and to create community resilience. If this idea is successfully achieved, Singapore can just boost its productivity levels significantly.

Sources: 1 & 2

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