Saturday, October 22, 2016

Deducting premium from wrong GIRO account

An insurance company had been deducting the premium from the GIRO account belonging to another policyholder. The company discovered the mistake after 8 years and informed the account owner.

The account owner asked for compensation for the wrongful deduction. After a delay, the insurance company calculated the interest based on the average fixed deposit rate of 1.2% p.a.

The account owner had been paying interest at 5.5% on a loan taken from his own policy. He asked for the interest to be computed at 5.5%.

My comments:

a) The request for the interest to be computed at 5.5% is fair.
b) It is important for the account holder to check the GIRO deduction regularly to spot this kind of mistake.

Friday, October 21, 2016

Your voice matters - use it

Here are the topical issues available for your voting. When you vote, you will receive an email to view the results when the voting closes after 14 days. You only need to click on the Facebook or Google logo to register. After that, you can vote immediately. It takes less than 10 minutes.

Thursday, October 20, 2016

How to draw the bus route

First, I need to have the data of the bus services and the bus stops in sequence. This data is provided by the Land Transport Authority. But the data comes in a complicated format. I have to write a script to extract the data that I needed in a form that is easy to use.

Second, I have to write a stored procedure to display the bus stops (and the GPS locations of the bus stops) in the sequence for each bus service. The GPS locations for each stop are obtained from another table.

Third, I have to write a webpage that display the data from Google Map. It also uses the Google API to plot the route of the bus by joining all the stops using the GPS location. This API has a function called "snap to road". It will attempt to draw the route to follow the road. It works most of the time, but does not work well when the bus stops are far apart.

Here is the map of the route for a few services. They are quite attractive.

Bus Route

You can have a quite look at the route taken by a bus service at this website. Here is an example of the route for bus 130. You can also see the actual stops on another tab. This can also be viewed on your mobile phone.

Voting Slip

Here is an example of a voting slip. You only need to click "For" or "Against". It is quite easy.
You can give your vote at

Sign in to vote in the Wisdom website

Mr. Tan
Why do I need to sign in to vote for the issues in your wisdom website? Can I be anonymous?

I only capture your name and email.
I wish to prevent some people from voting many times.
I also want to send the e-book prize to those who have voted 5 times or more.
I also need to know your age band, gender and citizenship to analyze the results.

You only need to register once. I capture only your name and email. Many people don't mind. This website is similar to many other websites.

Self driving bus at NTU campus

I read a news article that Nanyang Technological University is testing the self driving bus.  I was surprised at this approach.

If NTU wants to be "driverless" they could have introduced a tram system or a LRT system using tracks. The tracked approach is more suitable for fixed routes.

They do not need the technology of the "self driving car" to provide a public transport service within its compound.

Sometimes, I wonder, if people think?

Causing trouble unnecessarily - NTUC Income website

I logged into NTUC Income website to check my insurance policies. It asked me to change my password. It told me that I would receive an email within 2 minutes. It apologied for the delay during "peak hours". It never came after 10 minutes. It was not peak hours. It was 7 am in the morning.

Now NTUC Income is following the crowd to do stupid things. Why force its customer to change the password? Why have a buggy website that does not send out the email immediately?

What is the harm of keeping the old password? I hardly use it. It only provided information - which I do not consider to be important. If I did, I would have changed the password regularly on my own, without being forced to do so.

By introducing this "security feature", it is causing me to give up on accessing the website.

Diversification of the index fund

The shipyards in Singapore are going through a difficult time. The shipping lines are similarly affected. The shares of companies in these sectors have dropped a lot. But the Straits Times Index is still holding above 2800.

This is the power of diversification of the index fund. While some shares perform badly, the other shares are doing well. The index fund is still showing an overall gain.

Learn about investing in the index fund, namely the STI ETF, in this short video.

Wednesday, October 19, 2016

A new future for central planning

Central planning failed in the past. The communist countries tried it and it produced dismal results.

After the collapse of central planning, we have nearly three decades of market economy. It has produced good results, generally. But it has also produced bad results with the wide income gap, the disappearance of the middle class, stagnant incomes, insecure jobs and high unemployment (including part time employment).

It is time to consider central planning at the macro level and market economy at the micro level. How will this work?

The state can take first step. Using the available data and proper analysis, it can determine the number of positions required for each major job category. It can train the young people for these jobs and give them the licence for that job. This will virtually ensure the availability of a job as the demand is likely to match the supply.

The supply can be calibrated according to the market demand. If there is higher demand for the jobs a few years in the future, the training and supply can be increased. More licences can be issued.

The actual employment can be left to the market at the micro level. The state can also set the minimum wage for each job based on the skill that is expected. The employer can pay more than the minimum wage to attract the skill and experience that they need.

If there is a big supply of labor to meet a smaller demand, the state can pass a regulation to reduce the working hours in the week. This ensures that the available work is fairly distributed to the available workers.

Matching at the micro level can be done efficiently using the Internet. Information is available to workers and employers to make the matching and provide fair terms of employment.

I see the market-oriented central planning to be a solution for the future. It combines the advantages of both systems. There will be problems that need to be addressed in this new system, but they can be addressed when they arise.

Vote and win a prize

Here are 12 issues that you can vote on. Just click on the Facebook or Google logo, provide three data for analysis and give your vote. It is so easy. Takes less than 10 minutes. And you will get a prize.

10 short videos on financial planning and insurance

I have produced 10 videos covering different topics on financial planning and insurance. Most of these videos are from 5 to 10 minutes. They are short and give the key and relevant points. You can watch them here:

Buy the right type of critical illness policy

Many people are convinced that they should buy a critical illness policy to provide funds for treatment of cancer or heart attack. They need to buy the right type of policy that does not take too much money from them. This is explained in the video

Renewabable energy for Singapore's future

Should Singapore invest in solar panels? Do we have enough space to catch the sunlight? Will the rooftop of HDB flats be enough?

How about building a covered walkway all over the place, with the roof being covered by solar panels? This will give shade to the people and cyclist walking below.

How about building a large roof over a park or field and put solar panels on the roof. This means that we cannot have trees or grass growing under the roof.

We should be planning for a future that is powered by renewable energy, instead of fossil fuel energy. The oil and gas sector will become less important in the future.

I am quite disappointed that Singapore is not even mentioned in this Wikipedia article.

Tuesday, October 18, 2016

Bus routes from Ang Mo Kio MRT station

Here are the bus services starting from Ang Mo Kio MRT station  - 132, 165, 25, 261 268, 73, 74, 76 and 88. They are shown in different colors. 
You can draw a similar map at

Motor policy - does it cover the accident

Many car owners do not pay attention to their motor policy until an accident happens. They stand the following risks:

a) The driver is not covered by the policy
b) The peril is not covered.
c) Should they make a third party claim?
d) A third party has claimed against them.

This video explains the coverage and how to deal with a claim.

Invest in a property

I have uploaded a video to give consumers about investing in a property in Singapore.

Invest in ETF or REIT?

Mr. Tan
I would like to enjoy better returns from my investments instead of parking the money in the local banks as FD rates has come down .

I am considering buying 10 lots of STI ETF Or Suntec REITs. They both pay handsome dividends for the past years. What is your advice and preferences bet the 2 choices?

The answer can be found here:

Monday, October 17, 2016

Bus routes

This website shows the route taken by a bus service. Enter the bus service and the route is displayed as a line from the starting point to the ending point.

You can plot several routes in different colors.

Rise of China and engineering expertise

The rise of China should give a warning to America. China has developed expertise in engineering, high speed train, manufacturing, innovation and entertainment.

During the initial stage of its industrialisation, it depended on American manufacturing expertise. China has gone beyond that stage. It is now able to innovate and create its own products and brands.

America used its talents on financial engineering. This is just gambling and ripping off unwary investors. They do not create any value.

The jobs in America have gone to China and other countries where the people are willing to work hard to produce things.

Singapore should also learn the lesson of the decline of America. Like America, we have also been using our talents on financial services, financial engineering and wealth management. We should now move to non-financial services.

Yield on Life Insurance Policies

A policyholder of NTUC Income took two policies 30 and 22 years ago. He has now stopped working and asked me if he should continue these two policies. He does not need the life insurance cover any more, as he has provided adequately for his wife and children.

I asked me to get the benefit illustration for these two policies. I take the cash value now, the premium payable for the next four years and the projected cash value after another four years. The yields on these two policies were 5% per annum.

If he is able to continue paying the premium, he should continue the policies for the next four years to enjoy an attractive yield of 5% and "free" life insurance cover.

Lesson: Do a forward projection of the yield on your life insurance policy to decide whether to continue to termination the policy.

I also calculated the yield for these two policies to be 4.5% p.a. and 3.8% p.a. respectively. These two policies also provided substantial life insurance cover during the past years. He was able to enjoy a good yield and "free" life insurance cover.

I have seen the benefit illustration for several types of policies that are sold by NTUC Income today. The yield are much lower that the yields in the past.

Lesson: What was good in the past may not be good in the future. It depends on the situation from time to time. Study the benefit illustration and understand it. It will allow you to make an informed decision.

It is better for policyholders to invest in the index fund (STI ETF) to get a much higher return. They can buy term insurance to provide the life insurance protection.

Vote and view the results

Here are the issues that are available for voting by the "crowd", i.e. the ordinary people. They include the performance of several ministers in the news lately.

You can give your vote here:

This is easy and should take you less than 10 minutes. You will receive a prize - "Financial Planning for Young People".

When the voting closes after 14 days, you will receive an email to view the results.

Sunday, October 16, 2016

Ranked Voting System

Here are some views from experts on the ranked voting system. Each voter votes for the first and second choice. If their first choice candidate does not win a majority, the second choice candidate is taken into account.

Move back to Medishield Life

Someone said: When I signed the integrated plan, my intention was to ensure my medical bills are fully covered. I didn't think about going to ward A or ward B1. 

After my mother in law hospitalisation, her insurance paid so little after all the deductions that I realised its wasn't really worth it for the premiums paid. 

But since I'm on ISP for so many years, and now close to 65, I just continue with the plan, as I still don't really know exactly what to do.

It is easy for you to convert back to Medishield Life. Call the insurance company and ask them if they will give you a pro-rata refund for the premium that you have paid for the integrated plan. If they can, you can convert immediately. If no, you can convert to Medishield Life at the next renewal date. 

Increase in premium for integrated shield plans

Why are the premiums for the integrated shield plans going to increase significantly next year?

The main reason is that Medishield Life now covers people with pre-existing conditions. These people were excluded previously. They now contribute to more claims. Most of these claims should be covered by Medishield Life (i.e. CPF) and should NOT impact on the portion paid by the integrated plan (i.e the insurance company).

Apart from these claims, it is likely that the increase in premium for the integrated plan is caused by the higher charges from the private hospitals.

An industry expert told me that the "as charged" plans could be abused. The hospital or surgeon could find reason to inflate the bills and the integrated plan pays for the inflated bills. The insurance companies are now trying to establish benchmarks for the operations. I hope that they can find the right solution.

In the meantime, it is better for budget concious consumers to stay with Medishield Life. If they are insured under an integrated plan, the premium could be 2 to 4 times of Medishield Life. They will still pay to pay the Deductible and Co-insurance.

Learn more about making the right choice from my video,

Bad design for Medishield Life

Medishield Life is badly designed. It is extremely complicated. Here are the very bad features.

1. Look at the Deductible. It varies according to the size of the claimable amount.
2. Look at the Co-insurance. It varies according to the size of the claimable amount.
3. Look at the pro-ration factors. It varies according to a complicated table depending on the type of establishment and the type of treatment.
4. Look at the premium subsidy. It varies according to the family income level and age band.
5. Look at the premium rates for Medishield Life. I had a difficult time to look for it. I have to search many pages of the website.
6. Look at the integrated shield plans. There are many plans offered by each insurance company and there are many insurance companies offering these plans. Try to understand the difference in their plans. You need to be a rocket scientist.

Here are some simple facts that must have eluded the planners in Medishield Life.

7.  It covers B2 and C wards. At these wards, the government provides a subsidy of 50% to 80% of the hospital charges. Medishield Life covers a small bill after the subsidy. There is no need for any Deductible. If a Deductible has to be applied, a flat sum of $200 would be sufficient. Similarly, the co-payment could be kept at a flat rate of 10%. We are talking of relatively small bills.

8.  Similarly, the pro-ration factors can be simplified. We do not need a complicated table with so many variables.

The real challenge is in dealing with treatment in non-subsidized wards, i.e. B1 and A wards. The term "non-subsidized" is not a proper description. There is a small subsidy in B1 wards.

When you buy an integrated plan, or go to a non-subsidized wards, you are helping the government to reduce its subsidy. You get a ward with 4 instead of 6 patients and have the chance to choose your doctor.  In most cases, these differences do not really matter to the quality of the care. But you are paying a much bigger bill (due to lower government subsidy) and you have to pay a much higher premium (maybe 2 or 3 times) to cover this difference. Is this really necessary?

It is better for the government to address this anomaly in its subsidy structure. By keeping this anomoly, it is passing the complicated to the Medishield Life system.

Talk on Balanced Financial Health

I gave a talk on "Have a balanced financial health" on 15 October. Over 40 people attended. There was an active discussion. You can watch the video of this talk here.

Presidential election on November 8

I will watch the November 8 presidential election in America with great interest.

Hillary Clinton is ahead in the polls by about 5%. This is a commanding lead. Donald Trump is getting massive crowds in his rallies.

The size of the crowds in the rallies is an indication of enthusiasm and grassroots support. This will lead to a higher turnout on voting day. It will give an edge for Trump. Will it be decisive?

There is another advantage for Trump. The ordinary people are tired of the corrupt establishment and wants to see a change. They do not care about the reputation of Trump. This negative reputation is generated by the corrupt corporate media.

The Brexit referendum in the UK was unexpected. Will we see a similar outcome in America on November 8?

Blog Archive