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Why Investment-Linked Policies Still Have Its Merits

As consumers get savvier about insurance, the Do-It-Yourself (‘DIY’) approach of “Buy Term and Invest the Difference” is gradually gaining in popularity. Briefly, it is the combination of buying a term life insurance and investing the “savings” from the lower premiums being paid. This contrasts with Investment-Linked Policy (‘ILP’) which has both life insurance and investment components. An example would be the AIA Pro Achiever which has been designed to include both insurance and investment elements in the most optimal manner. In general, ILP is preferred by consumers who want more exposure to investments than what other life insurance products may be able to provide. Therefore, it will be too foolhardy to dismiss ILP altogether. It definitely still has its merits and exists to benefit certain groups of consumers and situations.

ILP invests in a methodological and structured manner

One of the biggest merits of purchasing an ILP is to have investment professionals take over the actual investing. An example would be Mercer’s partnership with AIA to manage the investments under the AIA Pro Achiever policy. As a leading global investment consultant, Mercer possess the requisite expertise and rigor to manage and grow the investments in a methodological and structured manner.

Furthermore, the premiums collected under the AIA Pro Achiever policy will be fully earmarked for investment right from the start. Expenses for this ILP are also low since no sales charge will be levied. Bid-offer spread is also not applicable. What these imply are that every dollar contributed will have the potential to experience investment growth. Therefore, policyholders can afford more time with their loved ones with the knowledge that their investment portfolios are under the experienced hands of Mercer.

On the other hand, the DIY approach is prone to possible lapses. That is because it is not uncommon for one to juggle multiple roles (eg: the hardworking worker, the responsible parent) simultaneously today. During stressful periods, emotions could go on overdrive while investment may take a backseat instead. As a result, a case of “overwhelming emotions” or “absent-mindedness” could potentially ruin any well-planned investment strategy. However, by buying an ILP, such incidents can be avoided since the investment component has been outsourced to professionals. Regular-premium ILPs also employ a dollar-cost average approach that helps to even out market volatility. Over the long term, it allows the policyholder to fully reap the benefits of staying invested in the market.

ILP is a flexible finance instrument

ILP is a flexible finance instrument that can be catered to investors according to their risk-appetite profiles. For instance, the AIA Pro Achiever policy offers 3 types of portfolios; Adventurous, Balanced or Cautious. This provides a choice for policyholder to select a portfolio that best matches his or her expected returns/risk profile. The flexibility extends further as policyholders are able to switch or rebalance their funds from time to time at no additional fee. This is critical as risk appetites would naturally evolve when certain life milestones are reached.

In addition, AIA provides leeway for policyholders to adjust monthly premiums especially since one’s cashflow could fluctuate from time to time. For instance, during an unexpected windfall or upon receipt of annual bonuses, policyholders have the option of topping up their premiums. Likewise, when liquidity gets tight, policyholders are at liberty to take a premium holiday. Finally, there is always the option of making withdrawals when a critical need or emergency arises.

ILP also serves as a life insurance

Let’s not forget that ILP also doubles up as a life insurance which means that there is a death benefit attached to it. On this, investment-linked policyholders are typically covered up to the policy value or to the amount that they have invested. This offers an extra peace of mind as immediate family members would be able to receive the sum assured in the event of an untimely passing. A noteworthy feature of the AIA Pro Achiever is the additional death benefit payout of 100% total regular premium paid in the event of accidental death during the first 2 policy years.

AIA also recognises that with increased life expectancies, policyholders may prefer to stay invested longer. Therefore, AIA Pro Achiever allows policyholders to stay invested till age 100 (also the policy maturity)! Furthermore, AIA Pro Achiever actively rewards policyholder that stays invested for the long term. Firstly, charges for premium holidays, partial withdrawals etc are waived after the 13^th year of paying premiums. Upon reaching this milestone, policyholders are also awarded an extra 5% allocation on their premiums annually. Such loyalty features suggest that the AIA Pro Achiever provides even more value for money for policyholders that stay invested longer.

Get in touch with an AIA appointed representative to find out more about the AIA Pro Achiever today!

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Money Digest to buy or subscribe for any securities and/or investment products. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any company or investment. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

Is Owning A Credit Card For Necessary You?

Weigh the advantages and disadvantages of owning a credit card, before signing up for one!

WHY YOU MIGHT NEED IT

Here are some of the convincing points that highlight how useful owning a credit card is:

1. Practical for Globetrotters

Singaporeans desire to discover the world’s wonders beyond its concrete jungle. As travelling became increasingly convenient nowadays, there are several options for payment. One is through credit. There are three primary reasons why travelling with a credit card is practical.

Firstly, travel arrangements such as room reservation and car rental are usually done with a credit or debit card. Secondly, it adds a proof of financial capacity when trying to acquire a Multiple Entry Visa in some countries. Lastly, there is a sense of relief to know that you always have access to emergency funds while travelling.

Image Credits: pixabay.com

2. Protection against Crooks

I was once robbed when I was young. I let my guards down as I was accompanied by my friend. After watching a fantastic film, I noticed that my wallet was missing. My friend and I frantically searched for it for hours. I even left my contact details to the cinema staff, but I had no luck! I had to accept that a decent amount of cash was gone. The unfortunate ordeal applies to my house keys as well as my debit card. To prevent identity theft, I had to immediately contact my bank. The process took two days.

If I only carried a credit card, the gravity of the situation may lessen. Credit cards are not tangible as cash. It is also not linked to your savings account. Many establishments ask for further identification for significant purchases. Furthermore, you can simply report a lost card thru a phone call.

3. Essential for Good Credit Report

Gone are the days when you solely think about budgeting your allowance. Welcome to the adult world whereby property owners and automotive establishments judge you by your credit report. Some of the best interest rates are offered to the people who carry impressive credit report.

It takes no genius to realize that using your credit card sensibly builds a good credit report. If you are suffering from a bad one, it is time to rehabilitate through a realistic financial plan.

WHY YOU DO NOT NEED IT

Here are some of the convincing points that highlight how owning a credit card is a recipe for disaster:

1. Tempting for Impulsive Buyers

Whether you believe it or not, we all have a control over our shopping habits. You can either be a frugal shopper who regularly reads consumer reviews or an impulsive shopper who regularly submits to tempting offers. For a person who has a difficult time in resisting a purchase, equipping yourself with a credit card may be harmful for your finances.

Using a credit card diminishes the sense of awareness as you are spending the money that you do not have. You are likely to shop based on your wants than on its costs. On the other hand, shopping with cash may allow to contemplate about your purchase. You buy what you can only afford to pay for now.

2. Solely for Smaller Purchases

If your primary purpose for owning a credit card is to cover your fondness for retail therapy, owning a credit card is not necessary. It is a good idea to save up for purchases costing S$250 or less. The delayed gratification allows you to contemplate about the coveted product.

Swiping a credit card is helpful for bigger purchases that you want to pay in several chunks such as purchasing a new laptop as well as financing your child’s education.

3. Unnecessary for Savvy Planners

One of the famous tests involving Typology highlights the dichotomous nature of people who are calculated and people who are spontaneous. The latter plans out several areas of their lives before jumping into a decision. While, the former enthusiastically goes with the flow.

I, for one, plan out my entire budget for the month as well as the funds that will go to savings and the emergency fund. Setting up an emergency fund entails keeping at least 6 months’ worth of your salary. If you have a strong emergency fund, it is unnecessary to have a credit card for emergencies.

Image Credits: pixabay.com

Sources: 1 & 2

With up to 14% returns, consider Peer-to-Peer Lending in your investment portfolio

Alternative investments are gaining popularity due to the high returns that they potentially yield. One such alternative investment that is worth looking at is peer-to-peer(P2P) lending or commonly known as debt-based crowdfunding.

The concept is simple – small and medium business owners looking for funds to expand their businesses take up business loans which are crowdfunded by investors. The interest paid back by the businesses is the return on investment for the investors.

Funding Societies is a licensed and approved P2P lending platform in Southeast Asia. It is the industry leader with over 30,000 investors in Singapore, Malaysia and Indonesia. As the only P2P lending platform to win the MAS FinTech Award (SME category, 2016), Funding Societies has also won global recognition, being recognised amongst the Top 250 FinTech companies globally by CB Insights and winning the prestigious SME Global Excellence Award by United Nations’ ITU Telecom.

Here, Funding Societies explains why and how you can invest in P2P lending, a unique investment asset class that is complementary to traditional investments:

LOW BARRIERS OF ENTRY & POTENTIAL HIGH RETURNS

As an Investor, you can read the easy to understand factsheet prepared for each loan and invest only if you like the loan. The minimum investment amount is just $100 and you can earn interest up to 14% p.a.!

If you are too busy and do not have enough time to read the factsheet then you can invest via the Auto Invest feature. Just set your parameters and let the system invest for you.

On the platform, you can invest in two types of investments: Term Loans and Invoice Financing. The investment periods for both investments are relatively short, 1 – 12 months for Term Loans and up to 3 months for Invoice Financing.

MONTHLY REPAYMENT TO RE-INVEST EASILY

Suppose you invest into a term loan of 12 months this Christmas, you’ll receive part of your principal and interest paid back on a monthly basis until next Christmas.

Here’s an illustration:

Assuming an investor invests $100 in a loan of 10 months at 12% p.a. interest rate. The monthly repayment is calculated below.

Therefore, the total interest earned by the investor is $10 at the end of the 10 months.

Assuming that the same investor invests 10 of such loans (10 x $100 per loan), he gets $110 in monthly repayments. The total interest earned will be $100.

Furthermore, the investor can reinvest his interest and principal multiple loans to achieve a compounding effect. Here’s another illustration:

As shown in the above illustration, the investor re-invested his monthly repayment into new loans and was able to get $109, instead of $100 without re-investing.

LICENSED AND COMPLIANT

Funding Societies holds a Capital Markets Services license issued by the Monetary Authority of Singapore.

They have also gone through multiple internal and external audits to ensure that all processes are compliant.

Funding Societies is also one of the first peer-to-peer lending platforms to use an independent escrow account to handle all investor funds. What this means to you as an investor is, Funding Societies does not have direct access to your funds and the funds and investments are safeguarded by the 3rd party trustee (which is also licensed by MAS).

STRINGENT IN CREDIT RISK MANAGEMENT

The key risk in this investment is businesses defaulting on the loans. However, Funding Societies does thorough due diligence on the company to minimize this risk, which is why the default rate is also one of the lowest in the region at just 1.4% as at 30th November 2017. The returns are priced based on risk, amongst multiple factors. As an investor, you have full autonomy to choose which loans you want to invest in, based on your risk/return appetite.

Funding Societies advocates the “skin in the game” concept. The company and members of the management team invest their own money in every loan to not only co-share the returns but also risks with all the investors.

SMART FEATURES TO MAKE THINGS BETTER FOR YOU

Auto-invest feature reduces the time required to monitor opportunities. Simply input your preferred parameters and the system will do the rest.

Live chat with Miyu the chatbot on Funding Societies’ website and get your queries answered 24/7!

Even though Funding Societies is an online platform, they offer a personal, offline experience for investors. Investors can email, call or visit their office for a no-obligation chat. Funding Societies is also a winner of the Best in Customer Experience for Alternative Financial Services this year, awarded by Retail Banker International. Try out the platform for yourself to experience it!

SIGN UP NOW TO BE AN INVESTOR WITH FUNDING SOCIETIES

Join more than 30,000 other investors on Funding Societies’ platform, and earn returns of up to 14% per annum. Make your $100 (or more) work harder for you this year and collect your ‘bonus’ next Christmas! Sign up as an investor with Funding Societies now.

Disclaimer

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any company or investment. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

Beginning your career in Forex: Tips to remember

It is no wonder that Forex is the biggest and the most attractive business market in the world. Millions of people are starting their career in Forex every day. If you want to trade in Forex, you do not need your office but you only need your computer connection and your strategy. When millions of people are trading in Forex, it might seem that all these people are having a good day. They are trading in the markets and although they can lose their money, they can be on track in Forex with a little hard work.

It is actually not that simple in Forex if you do not know the right way of trading. Most beginners in Forex lose their career after only a few months of trading because either they have no experience of the trading market or they have not quite get it right. They make many mistakes which are quite simple for them but deadly when you are a beginner. If you want to trade in Forex and thinking that you have a basic knowledge on the market, this article might come to your help if you want to avoid the mistakes that beginners make in their trading. It will not only give your career head starts but it will also improve your career smoothly in the market.

Sky is the limit

When you start your trading career you must wonder about the profit factor in this industry. To be honest there is no need to do the extensive calculation as you can easily understand the true benefit of professional trading just by observing the life of the successful Singaporean trader. Being an active trader you will be your boss and you set the limit for the potential loss or profit. However, trading is not all easy. In fact, this is not suitable for everyone. You need to trade this market in a relaxed environment so that you can take the perfect decision. Before you consider trading as your full-time profession it’s highly imperative that you consider demo trading account as your practice field. Never start your trading career with the real money since you might lose your entire trading capital. First of all, learn all the fundamentals of this market so that you can easily place your trade with an extreme level of confidence. Never take any risk which you can withstand. Find the perfect balance between your risk tolerance level and profit factor to survive in this industry.

Don’t start with live account

Many traders start trading in the market with all of the strategies they have got on the internet. It is a big mistake for you if you have just started your darer in Forex. You will see that there are lots of strategies for you but you cannot trade them in the live account when you are new. You should remember that it is an investment market where many traders lost their investment. You have to practice in your demo accounts to give you some foundation on the market trading. It will help you in your career and you can understand why demo accounts are here.

Choose a simple strategy for your beginning

There are many strategies that are used by professionals in Forex. Do not try to impress yourself and choose a simple strategy. If your strategy is simple and it works then it is not simple. Any strategy with a simple touch of your hard work and trading techniques can make your career bloom.

Never overtrade, never rush

This is the mistakes that beginners love to make. Do not overtrade in Forex as you are not going to make money if you have placed many trades in the market. Also, do not hurry. You need to be patient to give time to the markets to work out. Be disciplined in your trading and patient for your strategy to work.

The Future Of Cashless Payment

Much is known about the fact that Singapore is very much still a predominantly cash-based society. So much so that during the 2017 National Day Rally, Prime Minister Lee Hsien Loong mentioned that Singapore has lagged behind in terms of electronic payments. This comes at a time when other countries have already moved forward to embrace cashless transactions and accepting phone payments with a virtual terminal. This was a wake-up call as a slow adoption rate towards electronic payments has impeded Singapore’s progress towards a Smart Nation. Several organisations and fintech startups have heeded the clarion call and responded with their own cashless mobile apps. None so has delivered in a bigger and more promising way than OPG Asia has with its very own SpherePay.

What is SpherePay

SpherePay is an integrated mobile application that allows both consumers and merchants to process cashless transactions. With a fully equipped and QR-code based transaction system, it aims to promote an ecosystem of digital transactions such as micro loans and mobile wallets. SpherePay is developed by OPG Asia Pte Ltd, one of the world’s leading providers of financial innovation and payment services. OPG Asia is committed to the development of electronic business and operations to improve the operational efficiency of society as a whole. With data security as one of its operating principles, OPG Asia is certified by the Payment Card Industry (‘PCI’) Data Security Standards. This is an important step to gain credibility and trust amongst consumers and merchants.

How To Use SpherePay

For the consumers, SpherePay provides 4 main functions- a) Scan & Pay b) Collect Money c) Top Ups, Withdrawals and D) Advance Cash Credits.

To start using these amazing functions on the SpherePay mobile app, follow this step-by-step guide:

Download SpherePay on the Apple Store or on Google Play and sign up as a registered user.
To start using the Scan & Pay function, tap here to active camera to SCAN Merchant QR Code to pay. If you are transferring money to your peers on SpherePay, also tap this function to scan your peer’s unique QR code.
To collect money from others on SpherePay, click here to activate your own QR code to receive money transfer from others.
To top up or withdraw money on SpherePay, click either of these 2 buttons. Consumers can link their own debit cards or bank accounts to inject or withdraw funds from SpherePay.
To apply for advance cash credits, click here and obtain a quick loan to purchase items at merchant shops. This allows consumer to buy now and pay later. The advance cash credit will also be available on several online and e-commerce stores.

These 4 key functions effectively form the core of a digital wallet and bring with them countless advantages.

Why Go Cashless With SpherePay

SpherePay enables consumers to link all their credit and debit cards into a single app to pay for their purchases by scanning the merchant QR code. With hundreds of merchants island-wide, this means that users can now leave their wallets in the comforts of their homes without worrying about the need for cash.

When the moment arrives for bills to be split at the dining table, a SpherePay user can simply transfer money on the app by just scanning the QR code on his friend’s SpherePay app.

Going cashless with SpherePay allows the users to snag exclusive promotions and special offers listed by participating merchants on the SpherePay app. Be notified of such exclusive promotions on the SpherePay app with the Location Based Services push notification function.

SpherePay is rapidly expanding its footprint. By end of 2018, SpherePay aims to have over 5,000 offline and online merchants island wide. SpherePay’s expansion plans also includes regional footprints with Thailand and Indonesia opening in 1Q2018 and the rest of South-east Asia by end 2018. This means consumers can shop easily in multiple countries without having to worry on changing physical monies at the money changers.

Download SpherePay Today

SpherePay is available for download on Google Play or The Apple Store. Download immediately and you no longer have to worry about bringing your oversized wallet out the next time!

* Note that SpherePay is no longer functioning.

LOW BARRIERS OF ENTRY & POTENTIAL HIGH RETURNS

MONTHLY REPAYMENT TO RE-INVEST EASILY

LICENSED AND COMPLIANT

STRINGENT IN CREDIT RISK MANAGEMENT

SMART FEATURES TO MAKE THINGS BETTER FOR YOU

SIGN UP NOW TO BE AN INVESTOR WITH FUNDING SOCIETIES

Sky is the limit

Don’t start with live account

Choose a simple strategy for your beginning

Never overtrade, never rush

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