Easy Start to Investment for Wealth Accumulation

Done constructing your Risk Management portfolio? Looking at Wealth Accumulation as the next step in your financial journey? At this stage, most people realize that they don’t know what they don’t know about investments and savings for Wealth Accumulation. Many assume the best place to start is with stocks and shares. Then they realise that they don’t have the capital for a meaningful investment. The risk may also be more than what they’re willing to bear. The next instrument that comes to mind would inevitably be investment funds. 

Investment funds have a mixed reputation. You either love them or hate them. Generally speaking, it all boils down to a few features: Allocation rate, Charges, Flexibility, Strategy, and Choice of Funds. Here’s where the latest innovation in the market comes in. AIA’s new Pro Achiever builds on its popular predecessor to meet the above-mentioned challenges.

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Who May This Option Be For?

Everyone of us have different financial goals and dreams.

Example:

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As with all products, the AIA Pro Achiever may not be for everyone. If you require protection, AIA’s Family First Series may be more suitable; or if you prefer guaranteed returns, the AIA Wealth Pro Advantage may suit you better.

Contact Your FSC before jumping into any investment or plan.

Insurance for Insurance - Planning for Increasing Premiums

Nobody disputes the importance of having hospitalization and medical insurance coverage. Almost everyone would agree that paying for medical insurance is more prudent than having to pay for the medical treatment itself, regardless of age. Moreover, medical insurance becomes even more important when we age as the probability of a claim increases. It is also a fact that medical insurance premiums increase as we age. This may result in premiums becoming unaffordable, especially in our retirement years. We will then face the problem of unaffordable coverage when we need it most. The obvious solution is to factor the future cost of medical coverage into our Retirement Planning. Here are some suggestions on how to go about it.

Set Aside Money to Pay for Premiums

Setting aside a lump sum or a regular amount during our working years may be the simplest solution. But this method comes with inherent problems. Firstly, the value of the money that is set aside decreases every year due to inflation. Secondly, it would take tonnes of discipline to save regularly for something so far down the road. There will always be the temptation to use the money. Finally, even if we have the discipline, we would bear the opportunity cost of not being able to maximize and grow this sum while it waits to be used for future insurance premiums.

Invest My Money and Use the Gains to Pay for Future Premiums

This method sounds more logical than the first. After all, we’d be maximizing the growth of our funds. The downside is that investments are not guaranteed. We may use investments as a vehicle to help in the accumulation of funds during our economically active years; but then we’ll have to park those funds in an instrument with much less risk (and much less returns) on retirement. That once again puts us in the same situation as the first method – setting aside a lump sum. Although this time the “wasted, unmaximized” years are less than the first.

Save Money in a Flexible Multi-use Plan

The third method, which is the one I advocate, is to save regularly in an instrument that allows us to grow our money while we don’t need to use it. Monetary contributions to this plan would end after a predetermined number of years or until retiremenat. The steady growth of our funds should continue even during our retirement years. This instrument would also allow us to make withdrawals on a regular basis to fund our medical insurance premiums, without jeopardizing the rest of the funds left in it. Finally, there should also be the option for a full liquidation at a profit, in our later retirement years, should we decide that we no longer need to maintain our medical insurance (e.g. age 75 and I’m still healthy; I might decide to liquidate and use the funds for a final round-the-world trip). 

One example of such a plan is the AIA Gen3. We can choose to pay premiums for 10 or 25 years. Yet coverage last till age 100. A guaranteed annual cash payout starts after 10 years. We can choose to accumulate these cash coupons for more interest and start withdrawing only when we need them (i.e. on retirement). The Gen3 comes with annual dividends which increases its surrender value year after year. Finally, it comes with death coverage. This means that should we decide to keep it to the end, we would be able to further leave a legacy. Thus this plan can benefit both us, when we need regular funds, as well as our descendants, when we’re no more. 

Of course, there are other options. Find out more from your Financial Consultant today!

Hope for the land of sugary piss - Singapore? (AIA Diabetes Care)

This month we discuss an issue that 1 in 3 Singaporeans are familiar with, yet remains below the radar - diabetes. You probably know a friend or family member with this chronic condition. You may also be aware that people with diabetes are unable to purchase much needed insurance coverage. Not anymore. AIA has recently launched a plan for diabetics. In fact, people without diabetes are unable to purchase it. Huh? A plan that healthy people can't purchase? Indeed, read on to find out more.

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Singapore - the Land of Sugary Piss. There is Hope. 

According to the Ministry of Health, diabetes is one of the biggest drains on our healthcare system. Singapore has the second-highest proportion of diabetics among developed nations. 3 in 10 Singaporeans will have diabetes before turning 40. The situation is so serious that 4 Singaporeans lose a limb or appendage dailybecause of diabetic complications. Unfortunately, people with diabetes are unable to get insurance coverage – until now.

Introducing the AIA Diabetes Care

Managing diabetes can mean big adjustments in lifestyle, such as diet, exercise, and daily monitoring of your condition. Alongside these new challenges, you may also face difficulty getting new coverage or keeping up with future treatment costs. Knowing this, AIA created AIA Diabetes Care specially for people who suffer from Type 2 diabetes, gestational diabetes and for pre-diabetics.

Key Benefits:

1) Easier Access to Protection

No medical check-up necessary. You only need to answer 5 simple questions

2) Guaranteed Coverage for 5 Key Diabetes-related Conditions

3) Guaranteed and Levelled Premiums

Unlike most other health plans, premium will not change and the plan will not get more expensive as we age.

4) Extra Special Condition Payout

20% extra coverage payout on limb amputation due to diabetic complications, giving you much needed support to adjust your lifestyle.

5) Boost Your Coverage with Cancer Cover

Upon diagnosis of early or intermediate cancer, 20% extra coverage will be paid out. A further 100% of coverage is paid out if Major cancer happens. You’ll still be left with the coverage from the basic plan.

6) Death Coverage

Should the eventual happen, your family receives a further $5,000.

AIA Diabetes Care can also be integrated with the AIA Vitality programme, giving you up to 15% discount. This programme encourages you to engage in a healthy and active lifestyle.

Contact Your FSC for more Info Today!

What's to Know About The Rising Cost of Basic Hospital Coverage?

You may be aware that the national hospital insurance, CPF Medishield has become Medishield-Life. You may have also heard that the private insurers are preparing to raise premiums. Is this justifiable? How will we be affected? In this first issue of the year we look at the upcoming changes to the "Shield" plan of the largest player in this market - AIA. This is important as the rest of the insurers would follow soon after.

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Around two-thirds of 2.5 million Singaporeans are insured by an Integrated Shield Plan (IP), with 60 per cent of them having a plan which provides coverage for private hospitals. IPs offered by appointed private insurers allows for better healthcare treatment and services above those provided by MediShield Life. MediShield Life is designed to provide only a basic level of coverage meant for ‘B2’ and ‘C’ class wards in Government/Restructured Hospitals. In addition, consumers may purchase a cash rider to the IP, in order to have full hospitalization coverage. 

According to Life Insurance Association (LIA) hospitalization claims have increased 15% annually over the past few years, with the majority from treatments and services in the private healthcare sector. This resulted in the current premiums becoming unviable for private insurers, leading to losses for 3 out of 5 insurers. Thus, IP premiums are set to go up across the board.

AIA has announced that it will raise the premiums for its IP covering private hospitals – AIA HealthShield Gold Max A by between 2 per cent and 23 per cent. This increase will take effect on policy anniversaries following 25 January 2017.

To balance out the increase in premiums, AIA has enhanced the plan. If treatment is sought with any of AIA’s Quality Healthcare Partners or Government/Restructured Hospitals:

1. the annual claim limit is increased to $2 million

2. the coverage for pre and post-hospitalization expenses is extended to 13 months 

These limits are the highest and the longest in the industry. 

3. Although the premiums will only increase upon the policy anniversary, the enhanced benefits will be effective from 25 January 2017, covering clients earlier.

AIA is also the first to set up a panel of preferred private doctors as recommended by the Health Insurance Task Force. This has the following benefits to clients:

1. It allows AIA to control and prevent unnecessary increase in premiums. 

2. AIA can ensure quality of treatment and care given to its clients. 

3. The list of preferred doctors gives clients more than enough choice of renowned specialists.

4. Being the first to make changes, AIA is able to set the bar for the rest of the insurers.

AIA has a significant market share which allows it to negotiate prices with the panel of doctors, containing cost yet maximizing quality and choice. This will create a win-win situation for clients and the insurance company going forward. 

The Integrated Shield Plan is an integral component of most people’s Risk Management portfolio. Should you have further queries regarding this topic, AIA Vitality, or any other matter concerning financial planning, please feel free to contact me. I’d be glad to answer your questions, no strings attached.