TM Asia Life Policy

I have an insurance policy with TM Asia. To be exact, it is a whole life policy with a plan name that is called Asia Life Plus. My parents bought it for me when I was 16 and I have been servicing it after I started working.

Recently, TM Asia declared that yearly bonus again for participating whole life policies and even though the returns on the par fund for 2009 wasn't fantastic, the bonuses declared were not reduced. TM Asia has never cut their bonus for the past 10 years. At least that is what I have heard.

After receiving the annual bonus statement, I decided to call the customer service centre for a benefit illustration of my policy. I just received the benefit illustration today.

Do note that since this policy was bought by my parents and handed over to me, I never did any comparisons with other companies then. While many people have never heard of TM Asia, it is actually quite a big company though it is relatively unheard of in Singapore. Its tied agency force is also very small as it tends to rely on IFAs to distribute its products.

A Quick Analysis

I am currently at Year 12 of my policy year meaning that I (and my parents) have paid 12 years of premiums worth a total of $22,204.80 for a coverage of $160,000 for Death and TPD. There is no critical illness coverage in this policy.

Based on the current surrender value, it is $11,200 (Guaranteed) and $4,357 (Non-Guaranteed). That adds up to a total of $15,557 in surrender value provided that the non-guaranteed component is accurate.

The bonuses become guaranteed additions to the sum assured once they are declared.

Terminal bonus on death and maturity

TM Asia whole life policy has the following feature:

Below 10 yrs : 0%
10 to 14 yrs : 25%
15 yrs: 50%
16 yrs: 100%
17 yrs: 150%
18 yrs: 200%
19 yrs : 250%
20 to 24 yrs: 300%
25 to 29 yrs : 400%
30 and above : 500%

This basically means that the non-guaranteed component for death or maturity of the policy starts to increase as the policy years go by. As my policy is only 12 years old, whatever bonuses that have been declared are still subject to 25% payout only. That means that if $10,000 in bonuses have been declared, the non-guranteed component payout is only $2,500. This bonus chart stated above relates only to claims during death and maturity (policy year 99 I am guessing). So I guess it is not really meaningful to me unless I die or I live past the age of 99.

Terminal bonus on Surrender

To add to the already confusing policy, there is another table that shows how the terminal bonus for surrendering the policy works out.

It states: "Terminal bonus on surrender as percentage of attaching bonus is illustrated from the end of 19th year onwards if applicable."

19 year: 125%
20 to 24 yr : 300%
25 to 29 yr: 400%
30 and above: 500%

Basically, at the 20th policy year ( meaning after 19 years of paying premiums), I can expect to see a big jump in the non-guaranteed component of the surrender value. This is illustrated in the benefit illustration where the non-guaranteed surrender value jumps from $8,464 to $20,858 during the 19th and 20th policy year respectively. At the 21st policy year, it almost doubles again to $42,057.

Conclusion

I have had thoughts of surrendering this policy but decided against it as I wanted to wait until the 20th policy year before making any decision. In any case, this policy serves as a good protection and savings plan for me. I know many people will recommend the proverbial Buy Term Invest the Rest mantra but this has worked well for me thus far. While it does not have Critical Illness coverage, I still have my coverage from other policies.

Many IFAs have also touted TM Asia's whole life policies as being one of the most competitive in the Singapore insurance industry. I am not sure how true that is. The only thing I know is that in terms of bonus declaration, TM Asia has been able to pay out a constant bonus over the past 10 years. Dollar for dollar and coverage wise, I would like to think that other companies might have even more competitive plans that provide better coverage at a lower premium. In fact, I think many of the whole life policies now are rather similar and competitively structured. Insurance companies often review their products so that they become better than their competitors.

Dividends from Innotek and Suntec REIT

I received another round of dividends into my bank account over the past week.

These includes:

1. Innotek = $750.00
2. Suntec REIT = $25.13

Including the dividends that I have received from Capitaland, KingBoard and China Aviation Oil previously:

3. Capitaland = $315.00
4. Kingboard = $62.02
5. China Aviation Oil = $140.00

Total dividends received for the month of May 2010 is $1292.15

I guess this can be treated as my mid-year bonus =)

Mid-Year Bonus for Civil Servants

The Singapore government announced that the mid-year bonus for civil servants just two days back. It will be the largest mid-year bonus in the past five years.

The mid-year bonus is reported to be at half a month's salary plus a one-off payment of $300.

While that might not be a lot compared to the private sector, I am sure a lot of civil servants will welcome the news especially since there was no mid-year bonus declared last year.


This is also good news to the rest of the population as it shows that the government is positive on the economic recovery even though downside risks like the soverign debt crisis still lurk at the background.



The author is currently self-employed and does not get to enjoy such benefits as mid-year bonuses and year end bonuses. It makes him recall the days when he used to enjoy such benefits.

How Powerful is Your Blog?

Every now and then, I am amazed at the power of blogging.


I am not a natural blogger and blogging does not come naturally to me. Yet, I find it much easier to express myself through writing compared to speech. Thus, I blog.

What makes it amazing is the ability to rank high on Google searches for certain keywords. In a certain sense, one is able to get your thoughts across to many people at one go. Imagine people reading your postings on certain topics and taking action on your advice or recommendations!

Just another scenario. Imagine being able to "talk" to thousands of people each month without actually having to meet them. This is what a blog is able to do. It really amazes me on how powerful a blog can be if you use it for the correct purpose.

Many times, I have had ideas on how I could expand my blog be it in terms of layout or the content. I have brainstormed on various topics that I would like to write about but simply procrastinated. Perhaps it is time I take some action to propel this blog forward to greater heights.

How powerful is your blog? How do you intend to make it more impactful?

Dividends from Kingboard and China Aviation Oil

I have received dividends from my holdings in Kingboard and China Aviation Oil. It is a small amount of $62.02 and $140.00 respectively.

With the $315.00 that I collected from Capitaland earlier in the month, the total amount of dividends for May 2010 is $517.02.

I have also been using the coin deposit machine by POSB to deposit all my loose change into a POSBKids Account for my child's university education fund. Thus far, I have accumulated slightly over $2500 including money from red packets received during Chinese New Year.

Considering that it is still a long way more, I think I still have time to save up more in the future. But at the current rate I am going, the education fund will probably only hit $50K plus when it needs to be utilised.

How Important is Reading?

In front of me right now are two books.

One is titled: "Teaching Kids to Read" and the other: "Supporting Struggling Readers and Writers".

Through my brief interactions with students, I have come to realised that it is important to learn how to read.

When it comes to picking up a language like English, there are various components to it. I like to break it down to 3 main components of reading, writing and speaking.

All my life, I have slowly come to accept that speaking is perhaps the most important skill that one can have. After all, great leaders and sales people are known to be very eloquent. It is indeed hard to find a successful person who does not speak well.

However, I have also come to realise the importance of reading. Without being able to read, people are not able to gain knowledge. If one cannot read, you simply cannot comprehend the information that is presented to you in textbooks or books.

On the flip side, not being able to read perhaps frees one from group think that commonly exists in society. It enables one to search for the truth through experiments and thinking. A lot of great people were known to have problems reading.

If one was not able to read the news about investment, will it make the person more immune to the fluctuations in the stock market? Will it make the person a shrewder investor compared to one who is always reading up on the latest happenings?

So how important is reading really?

Keep Counting and Let's See Who Has More

I remember waiting at a crowded bus stop once and saw a beautiful convertible car pass slowly by. It was one of those peak hour jams where the bus stops were really crowded and the buses themselves were also packed. I could not help but notice quite a few people at the bus stop stare enviously at the person driving the convertible.

It was then that I remembered something. It is very common for people to become unhappy when they focus on the things they do not have in life.

I was reminded through a fellow blogger's posting that it helps to count your blessings. Instead of focusing on the things that you do not have in life, why not focus on the things that you have in life?

Counting my blessings

1. I have a great family.

2. I have a healthy body (thus far though I have put on quite a lot of weight lately)

3. I have spare cash.

4. I have a HDB flat. Though I only own 22.5 square metres of it (based on the amount of mortgage loan I have paid off).

5. I have a car. Another few more years to paying off the debt.

6. I have friends.

7. I am ALIVE!

Keep Counting your blessings to see how fortunate you are.