How Much Do You Know About Insurance?

We have often been very afraid at the sight of "Insurance Agents", simply because of an impression created by most of the agents as hard-sell salesmen. I will not comment on this issue because many a times even myself will shun away from such people because of the way they try to make me buy things that i do not really need. This creates a very strong stereotype on everyone representing an insurance firm regardless of what they intends to do. How many of us actually bother to spend sometime to think about what an insurance is all about and why we need it? As far as i will like to think, i seriously believe that an insurance is very close to a need rather then a want product, simply because it provides for protection of our assets as well as our dependants.

Hard selling of policies is pretty much a thing of the past although many still do so. There is seriously a significant difference between an insurance agent and what we call a financial planner. An agent simply tries to sell what the company wants them to sell at all costs, while a planner actually does a thorough analysis on their clients needs before recommending suitable products for them. Everybody needs some planning at some stage whether you like it or not, and believe me that you will not be able to plan anything for yourself because the discipline is too often too difficult to maintain. Please do not think that i am trying to convince you to buy something from me, but believe my knowledge and research is pretty much sufficient to make you trust in what i have said. I am a certified financial planner, but believe me when i say that i am trying to educate you on what you "NEED" to know. Its really not about how much you have to spend on a policy, but how much you need to prepare yourself for the worse situation. Unless you are some GOD or deity from somewhere, i do not believe you will be able to know when it is going to come at you. Below is an extract of what i have found, which is a research conducted by NTU with regards to how financially prepared are families in Singapore.

Protection Gap in Singapore Remains Wide
NTU Study finds families in Singapore are financially ill-prepared
for loss of breadwinner

Singapore, March 29, 2007

The loss of a loved one can trigger an emotional roller
coaster ride. It can also bring an unexpected financial toll on those who are left behind.
The bad news is that the majority of Singaporeans are not adequately protecting their
dependants from the ensuing financial burden in the event of their untimely death. The
sad news is that many don’t feel the urgency to do so.

These were the findings in two separate projects commissioned by the Life Insurance
Association of Singapore (LIA).

These findings are in line with the harsh reality that death claim payouts in Singapore
have averaged around $37,000 in recent years, significantly below what is deemed to be
sufficient to ensure that families can continue a similar living standard in the event their
breadwinner passes on.

The two projects which were independently conducted in the last quarter of last year
comprised a face-to-face consumer poll by Saffron Hill Research and an analytical study
by Nanyang Technological University (NTU).

Key Findings

Of those polled,

• Two-thirds had some form of insurance, of which 26 per cent had no idea how much
they are covered for;
Almost half (46 per cent) think they are well-covered in terms of sufficient coverage
for their dependants;
• There is a high level of indifference about getting additional coverage among those
who are in a more vulnerable situation
• Of those who do not think they are well covered (54 per cent), as many as 70
per cent of them said that they have no intent to purchase higher coverage
• Of those who do not own a policy (29 per cent), some 73 per cent of
respondents said they had no plans to buy insurance

Reasons For Non-ownership

Among non-owners, half of whom were from the lower income group (household income
of less than $3,000), price was the key deterrent (49 per cent). While some said they did
not have the means to purchase life insurance, others said it took a back seat to “more
urgent necessities” such as a car and credit card loans.

Further analysis of the results revealed that there was the lack of understanding of how
much is needed to pay for premiums to ensure adequate coverage. The survey found
that while some consumers baulk at being advised by their financial advisers that they

need up to 10 times their annual salary for adequate protection and feel this figure is

overly inflated, some nonetheless said they would be prepared to pay 10 to 20 per cent
of their income towards monthly premiums.

“This is a silver lining,” said LIA’s Deputy President Richard Shermon, who had overseen

the project. “At least we can address the affordability factor through better education
and quality financial advice.”

*The complete article is available HERE.

The above is just an abstract of the report and i believe it will bring you to the attention of why there is a need for protection ahead of all other luxurious committments. Probably this is a reason why i ventured into this industry in hope of educating more people about it. Anyway, if you think that you will need some ideas or comments, you can always contact me by dropping me an email at faithboy24@gmail.com. Financial Planning is a free service provided by most of us FPs, and if after any analysis that there is no need on your part then there will also be no obligations to make any policy commitments.

Friendship Vs Success

The topic today is slightly different from what has been going on in this place. Is money the only thing everyone is interested about or is success the thing that people are more interested in?

Without even asking anyone for answers, its pretty obvious. Probably you will get answers like there are lots of things that money cannot buy, but have you thought of the importance of money? Apparently there are the things that money cannot buy, like true friends and love. If you seriously think about this 2, they can actually be bought too. Without going too deep into it, money is the root to most evil. Not all evil begins with money, maybe temptations can be a root to evil.

Back to the main topic, what will you choose between success and friendship? Only you will have the answer to that and you will need to find that out yourself. Let us begin with pondering about what is the definition of true friends. The simplest of all will be someone who gets along well with you and understands you well. So how do you define knowing someone well? Is it by knowing what he/she likes to do or is it knowing what he/she likes to eat? If all these are a gauge of having a true friend, then you guys out there are just too naive. There is no exact definition to a true friend because human change and the environment changes as well, and so does your peers. Understanding your friend is just like doing a business, as your friend will always be under influence from different sources. One will never be able to predict when the fella will turn against you due to greater influence. So if i offer both you and your good friend a job that gives you a $100K annual income, and tell both of you that you get the job if your friend fail to turn up, what will you do? The default answer is obviously to not do anything and go for a fair chance. In truth, i do not think the chances of that happening is very high.

Sounds disheartening? Not to worry as in my life philosophy, everything is simple. There will always be a solution to problems. The elixir to solving this problem is simply the miracle "TRUST". If you do not trust your friend enough, whatever he/she do will probably cast shades of grey patches in your thoughts. How do we rationalise this? In the above scenario of the job offer, if your first reaction upon hearing the chance to get the job is to start thinking about what your friend will do to get the job, it simply means that the trust element is not there at all. If you simply start to think about how you should prepare for the job interview, it means that you definitely have ample trust in your friend. If you guys heard about the scenario about 2 partners in crime giving their statements in separate rooms, this is the logic. If both criminals do not admit to the crime, they will probably get away free. If both do not trust each other and choose to confess, both of them will probably get the worst verdict. So do you have enough trust in your friends around you? Why would you want to doubt your friends over negligible issues, when both of you will be happier off being friends as it is? I guess the success part is not an issue unless your friend come robbing you of all your assets.

Knowledge is power, but knowledge do not make a person mature. So when you decide to do anything to your friendship, think about it emotionally with your heart and not try to use your knowledgeable logical brains to think about it. That is simply why there is a distinct differentiation between Emotional Intelligence and Intellectual Intelligence.