Chinese Kapitan in Malaysia Yap Ah Loy and American oil magnate John D.Rockefeller were figures of the same Age. Yap was born in 1837 and Rockefeller was born two years later. Both had experienced very difficult childhood. Yap was a cowherd while Rockefeller raised chickens.
When Yap was travelling all the way from China to Malaya, Rockefeller had to suffer humiliation before getting his first job as an assistant bookkeeper. Yap got his first tin mine in his 20s and started to make rapid advances in his career; while Rockefeller got his first oil well and started to make fortune.
Yap had become one of the most power and wealth concentrated people in Malaya while Rockefeller rose as the richest man and the greatest philanthropist in the US.There are so many similarities between Yap and Rockefeller but at the same time, there are also great differences between the two of them.
Today, the Yap family has declined but the Rockefeller family is still so wealthy with more than US$300 billion assets. It is expected to continue being wealthy in the foreseeable future.
The objective of such a comparison is not to belittle the Yap family. On the contrary, I have full appreciation of Yap’s great grandchildren who are open-minded and contented with the ordinary. However, the contrast still tells us some life principles.
Perhaps, Yap was limited to his personal factors and had neglected the management knowledge of sustainability. He had also failed to grasp the transformation trend of social change and as a result, his wealth turned zero.
Meanwhile, Rockefeller started from oil exploitation and expended his business to the oil refining market, as well as the financial and manufacturing industries, reaching all aspects of the US economy.
He was specialised in using levering power to expand the industrial development under his business group and from industrial production, he accumulated capital to control the financial network.
Rockefeller’s success was the success of the US capitalism. He said that: “If I am broke and thrown to a desert, I can still rebuild the dynasty as long as there is a camel caravan crossing.”
Rockefeller and Western enterprises believe in professionalism and industrial power, that is why their wealth and status can be maintained. This is the condition lacked by Yap and many Chinese entrepreneurs.
The Rockefeller is able to pass its wealth to the sixth generation and it is actually closely related to its family education. Although he is the richest man in the United States, Rockefeller still required his children and grandchildren to do house work in exchange for their pocket money. His eldest grandson recalled that his first business trade was made when he sold his rabbit to a scientific laboratory.
Rockefeller told his son that the starting point is not the end. Regardless of a person’s origin, his success or failure in the future lies on his own efforts. Therefore, his children and grandchildren do not use the family wealth to buy British castle, French manor or Italian fine arts. Instead, they accumulate the money and made contribution to hospitals, universities and global philanthropy.Rockefeller’s story of success and wisdom of life do not only educated his children and grandchildren, but have also affected the values of the Americans.
From the decline of the Yap family and the attitude of a parvenu’s son in China who hit a person to death with his car but still said arrogantly that: “My father is Li Gang”, we know where the problems lie.
Monday, December 27, 2010
Monday, December 20, 2010
Protection & Assurance
Life insurance can be an important investment as it provides protection and assurance against life's many uncertainties.
However, it is also a necessity that those who have existing medical conditions may find themselves without. In many instances, these consumers must battle against denied applications, higher premium payments and increased uncertainties about the future well-being of their families.
But, by pursuing the right strategies, these consumers may find that they are able to obtain life insurance at great prices, as long as they understand how to properly navigate the market.
Life insurance costs are based on as many as 80 different rating factors, which must be examined before a price can be determined. In many cases, those looking to compare life insurance quotes may find that only a few questions are asked upfront, with many more coming after coverage is secured, according to industry business Life Quotes.
Despite these challenges, many consumers who compare insurance rates could find savings. In fact, many individuals may be losing out simply by not taking the extra time and effort needed to find good quotes from respected insurers.
Still, others lead busy lives, and in an uncertain economy it may not be the easiest thing to put aside the hours of research required. In addition, life insurance applications can take as little as two weeks or as much as two months to be completed, which in turn can lead many consumers to be discouraged with the process.
These consumers may benefit by seeking outside assistance, as those familiar with the industry can hold insights to which average individuals are not privy to.
"The first thing you should do is seek the advice of an agent that you trust to guide you through this process," says Susan Mancione, sales director at Life Quotes, Inc. "That can make all the difference."
These agencies can assist consumers with tips about the application process, such as how insurers handle information regarding medical conditions and which additions to an application can help improve rates. They can also give individuals a more accurate picture of what potential life insurance options are available and what they should expect from the coverage.
By taking the time to compare insurance rates, or by finding others to help in the search, consumers could save on their annual payments, and even find increased coverage. This, in turn, will help provide assistance to consumers with medical conditions, while ensuring the necessary protection for their families in the future.
However, it is also a necessity that those who have existing medical conditions may find themselves without. In many instances, these consumers must battle against denied applications, higher premium payments and increased uncertainties about the future well-being of their families.
But, by pursuing the right strategies, these consumers may find that they are able to obtain life insurance at great prices, as long as they understand how to properly navigate the market.
Life insurance costs are based on as many as 80 different rating factors, which must be examined before a price can be determined. In many cases, those looking to compare life insurance quotes may find that only a few questions are asked upfront, with many more coming after coverage is secured, according to industry business Life Quotes.
Despite these challenges, many consumers who compare insurance rates could find savings. In fact, many individuals may be losing out simply by not taking the extra time and effort needed to find good quotes from respected insurers.
Still, others lead busy lives, and in an uncertain economy it may not be the easiest thing to put aside the hours of research required. In addition, life insurance applications can take as little as two weeks or as much as two months to be completed, which in turn can lead many consumers to be discouraged with the process.
These consumers may benefit by seeking outside assistance, as those familiar with the industry can hold insights to which average individuals are not privy to.
"The first thing you should do is seek the advice of an agent that you trust to guide you through this process," says Susan Mancione, sales director at Life Quotes, Inc. "That can make all the difference."
These agencies can assist consumers with tips about the application process, such as how insurers handle information regarding medical conditions and which additions to an application can help improve rates. They can also give individuals a more accurate picture of what potential life insurance options are available and what they should expect from the coverage.
By taking the time to compare insurance rates, or by finding others to help in the search, consumers could save on their annual payments, and even find increased coverage. This, in turn, will help provide assistance to consumers with medical conditions, while ensuring the necessary protection for their families in the future.
Malaysia Insurance Sector
PETALING JAYA: The insurance sector is expected to continue its growth momentum, albeit at a slower pace, with the life insurance business projected to grow by at least 12% next year.
Life Insurance Association of Malaysia (LIAM) president Md Adnan Md Zain said: “With the economic growth projected to be around 5% next year coupled with the recent Economic Transformation Programme initiatives such as the Employee Insurance Scheme, Private Pension Scheme and the Foreign Workers Health Insurance Scheme, we should see the industry topping at a pace of at least 12% in new business sales next year.”
New business sales rose by 19% on a weighted premium basis in the first three quarters of 2010 attributed by a strong performance in regular premium sales which went up by 21% compared with the same period last year. Single premium business, however, registered a small decline of 1%.
With the low interest rate environment and higher disposable income, he said there was fresh impetus for consumers to seek high yielding products like insurance.
There was also a lot of potential in the life insurance market as the current penetration rate of 41% was lower than the more developed Asian economies, Md Adnan told StarBiz.
With rising medical costs and a slight uncertainty in the market, he said products such as health/medical, protection and savings related products would be the dominant types that would take the lead in seeking better penetration and growth.
Expressing a more optimistic outlook, Great Eastern Life Assurance (M) Bhd its director and CEO Koh Yaw Hui said the insurance market was projected to grow very strongly in the region of 15-20% next year. He added that the growth was underpinned by the strong growth momentum expected from the takaful business, especially with the issuance of four new family takaful licences this year.
General Insurance Association of Malaysia (PIAM) executive director Lim Chia Fook said the association expected the outlook for the general insurance sector next year to be positive with an increased demand for general insurance in all sectors. The medical and health insurance (MHI) sector was expected to remain strong in terms of growth which would be driven by growing consumer awareness and an increasing need for protection against escalating costs of medical and health care services, he noted.
Lim said the recently announced medical insurance plan for foreign workers to be implemented early next year would add further impetus to the MHI sector.
Apart from further pick-up in demand for property and liability insurance, the automotive sector would provide the stimulus for growth in the motor insurance sector, he said.
He said PIAM expected new areas of growth in micro-insurance products, especially in view of the fast developing small and medium enterprises sector as well as the biotechnology sector.
ING Insurance Bhd president and CEO Datuk Dr Nirmala Menon said that besides medical, protection and savings-related products having the biggest potential for growth, the industry would also be seen formulating a more comprehensive financial solutions plan for women to help them plan ahead better.
She also reckons that education plans would be popular as parents opt to give the best education to their children and that financial planning would be crucial to ensure there are sufficient savings for their children's future education.
Special focus would also be given to takaful products to capture the under-penetrated Muslim population which currently stood at below 10%, she noted.
Prudential Assurance Malaysia Bhd (PAMB) CEO Charlie E. Oropeza said the company's nine-month performance to September 30 had been really strong with total new business sales (conventional life insurance and takaful ) increasing to RM655mil, up 40% from the same period in 2009.
He said investment-linked products have been the mainstay of PAMB's business and would continue to be the driving force behind the company's long term growth, adding that it also expected to see a strong demand for medical/health riders.
Great Eastern's Koh said the challenge for the industry was to design suitable and affordable products that suit people's needs and boost the penetration rate of insurance in the country, noting that Taiwan has an insured rate of about 200% compared with 41% in Malaysia.
ING's Nirmala said that besides educating consumers on the importance of financial planning, the training of agency force would need to be intensified further as the professionalism of financial planners would affect consumers' ability to trust their advisers when it came to financial purchases.
Oropeza said besides enhancing the quality and professionalism of agents, another major challenge would be in attracting and retaining talent in the industry as finding the right people was a common probleml faced by all financial institutions.
Life Insurance Association of Malaysia (LIAM) president Md Adnan Md Zain said: “With the economic growth projected to be around 5% next year coupled with the recent Economic Transformation Programme initiatives such as the Employee Insurance Scheme, Private Pension Scheme and the Foreign Workers Health Insurance Scheme, we should see the industry topping at a pace of at least 12% in new business sales next year.”
New business sales rose by 19% on a weighted premium basis in the first three quarters of 2010 attributed by a strong performance in regular premium sales which went up by 21% compared with the same period last year. Single premium business, however, registered a small decline of 1%.
With the low interest rate environment and higher disposable income, he said there was fresh impetus for consumers to seek high yielding products like insurance.
There was also a lot of potential in the life insurance market as the current penetration rate of 41% was lower than the more developed Asian economies, Md Adnan told StarBiz.
With rising medical costs and a slight uncertainty in the market, he said products such as health/medical, protection and savings related products would be the dominant types that would take the lead in seeking better penetration and growth.
Expressing a more optimistic outlook, Great Eastern Life Assurance (M) Bhd its director and CEO Koh Yaw Hui said the insurance market was projected to grow very strongly in the region of 15-20% next year. He added that the growth was underpinned by the strong growth momentum expected from the takaful business, especially with the issuance of four new family takaful licences this year.
General Insurance Association of Malaysia (PIAM) executive director Lim Chia Fook said the association expected the outlook for the general insurance sector next year to be positive with an increased demand for general insurance in all sectors. The medical and health insurance (MHI) sector was expected to remain strong in terms of growth which would be driven by growing consumer awareness and an increasing need for protection against escalating costs of medical and health care services, he noted.
Lim said the recently announced medical insurance plan for foreign workers to be implemented early next year would add further impetus to the MHI sector.
Apart from further pick-up in demand for property and liability insurance, the automotive sector would provide the stimulus for growth in the motor insurance sector, he said.
He said PIAM expected new areas of growth in micro-insurance products, especially in view of the fast developing small and medium enterprises sector as well as the biotechnology sector.
ING Insurance Bhd president and CEO Datuk Dr Nirmala Menon said that besides medical, protection and savings-related products having the biggest potential for growth, the industry would also be seen formulating a more comprehensive financial solutions plan for women to help them plan ahead better.
She also reckons that education plans would be popular as parents opt to give the best education to their children and that financial planning would be crucial to ensure there are sufficient savings for their children's future education.
Special focus would also be given to takaful products to capture the under-penetrated Muslim population which currently stood at below 10%, she noted.
Prudential Assurance Malaysia Bhd (PAMB) CEO Charlie E. Oropeza said the company's nine-month performance to September 30 had been really strong with total new business sales (conventional life insurance and takaful ) increasing to RM655mil, up 40% from the same period in 2009.
He said investment-linked products have been the mainstay of PAMB's business and would continue to be the driving force behind the company's long term growth, adding that it also expected to see a strong demand for medical/health riders.
Great Eastern's Koh said the challenge for the industry was to design suitable and affordable products that suit people's needs and boost the penetration rate of insurance in the country, noting that Taiwan has an insured rate of about 200% compared with 41% in Malaysia.
ING's Nirmala said that besides educating consumers on the importance of financial planning, the training of agency force would need to be intensified further as the professionalism of financial planners would affect consumers' ability to trust their advisers when it came to financial purchases.
Oropeza said besides enhancing the quality and professionalism of agents, another major challenge would be in attracting and retaining talent in the industry as finding the right people was a common probleml faced by all financial institutions.
Thursday, December 16, 2010
Syriah Financial Planners
MALAYSIA will be able to produce about 500 syariah financial planners annually which would help meet the future financial needs of investors said the Malaysian Financial Planning Council.
Its president Kee Wah Soong said the number can steadily increase in a year from now as the MFPC ties up with more local institutes of higher learning.
According to the Economic Transformation Programme, Malaysia has less than 300 syariah financial planners.
"Under the ETP, with emphasis on wealth and asset management, there is a need for more competent and qualified people with technical knowledge and expertise. As for syariah financial advisers, there is a need for more than the traditional advisers," he said after the signing of several memorandums of agreement (MOA) yesterday.
The MFPC signed a MOA with Open Unviersity Malaysia to develop and executive Master in Financial Planning programme as well as memorandums of understanding with four other universities for registered financial planner and syariah registered financial planner (RFP) programmes.
They are Universiti Kebangsaan Malaysia, Universiti Utara Malaysia, Universiti Sains Islam Malaysia and University College Sedaya International.
The MFPC has held two Capstone Syariah RFP programme, a fast track pathway for existing practitioners, accountants, lawyers or academicians to become a qualified syariah financial planner.
Meanwhile Bank Negara deputy governor Datuk Mohd Razif Abd Kadir, who was also present at the event, said it is important that financial planners and advisers be equipped with knowledge on the syariah requirements to be in tandem with growth of the Islamic finance industry.
He said Islamic banking assets have expanded to reach 21.6 per cent of the total banking sector in Malaysia.
The Malaysian Islamic banking sector has registered double-digit growth over the recent eight years with an average annual growth rate of 20 per cent in terms of assets.
Enough For Retirement
Put your eggs in many baskets. That’s the best way to ensure you will have enough to spend after retirement.
A Million ringgit just isn’t what it used to be. So if you’re thinking of retiring at 40 after making your first million, you might have to make new plans.
Simply having a chunk of money in the bank will not guarantee security, especially after you retire and face a completely different lifestyle with new financial needs. What you need is a sustainable retirement fund that will protect you from the uncertainties of the global financial situation and the increasing cost of living.
Personal financial coach and financial planner Carol Yip encourages people to plan their retirement savings wisely. She believes that people should have various reserves of funds, and regularly review their lifestyle to assess whether their nest egg will be sufficient.
Aside from daily living expenses and post-retirement luxuries, medical costs are our biggest concern during this period.
Even if we are in relatively good health, old-age diseases will start to creep up on us and take their toll in our fifth or sixth decade.
With the rising costs of healthcare, will our savings be enough to cover doctors’ bills, medications and annual checkups? We cannot leave this up to fate.
A 2008 survey conducted by a local insurance company found that although 72% of the respondents claimed they were saving for retirement, 41% did not have a concrete plan for how to build their retirement funds. They just saved as much as they could and hoped that it would be enough.
(The survey interviewed 1,024 Malaysians with a monthly household income of RM3,000 and above, living in urban centres in Peninsular Malaysia and Sabah and Sarawak.)
Of those who saved, 64% did not consciously separate their savings for retirement. The survey was repeated in 2009, where as many as 91% of respondents said they were not sure how much would be needed for retirement.
“Many people have no clue about saving for retirement. We are so immersed in our daily work and challenges that financial planning becomes our lowest priority,” Yip laments.
This has led to far too many people who save haphazardly, or not at all, only to face the cruel truth when they lose their fixed income.
Children can be a form of life insurance, says a financial consultant - File photo The key point in retirement saving is not to begin only when you are retired or close to it! Instead, you should start saving as soon as you have a salary, so that you’ll have more time to set funds aside and grow it into a handsome pot of money.
“Knowing what you want to do at retirement and how much it costs to live the lifestyle you desire are crucial factors to consider. This should form the basis of a good retirement plan,” advises David Lee, senior wealth manager of Prudential Assurance Malaysia Bhd.
If you don’t know where to begin, there are many tools (see below) or experts available to help you work out your retirement “number” and plan your savings accordingly.
Retirement saving isn’t about hoarding money. It is about devising a plan that meets your unique financial situation and needs. It is also important to understand where you are in life now and where you are heading before making any plans.
Yip advises people to treat their lives as a business. “When you run a business, you have business plans, budgets, management meetings, and projections.
“Similarly, look at your own life and ask yourself, ‘Am I going to make more money next year, or is it going to be tough? Will I get a promotion or more bonuses? Is my lifestyle getting more expensive? Am I going to get married and have children?”
Constant review of your lifestyle, priorities and needs will help you determine whether your plan needs to be modified. For instance, if you get a salary raise, you can afford to make new investments, rather than spend it all on a bigger car.
People should create their own forms of retirement funds, or what Yip calls “self-insurance”. One is spoilt for choice, as you can choose to invest in fixed deposits, unit trusts, equities (stocks and shares), investment-linked insurance, property or even investment in a business.
Your choice of financial tool(s) depends on how much time you have, how much risks you are willing to take and your income level.
If you are in your 20s or 30s and are just establishing your career, regular investing and saving is an effective and convenient way to help you reach your retirement goal, says Lee.
“There are insurance products that ‘force’ you to save on a regular basis, and subsequently pay you a stream of guaranteed monthly income at retirement. As you have more time to ride the ups and downs of the market, you can also afford to take more risks investing in equities.”
If this article is sounding alarm bells because you are nearing retirement but have nothing apart from your EPF savings, it’s not too late to begin.
“At this age, you should ideally have adequate insurance protection, especially medical insurance,” Lee says, adding that people starting in their 40s or 50s should take far more conservative investment risks.
Most people would have FD savings, but if you are concerned that FD returns cannot keep up with the inflation rate, you could put the lump sum money in single premium insurance plans that offer a shorter accumulation period and provide guaranteed monthly income upon retirement, he adds.
It is important to look for an insurance plan that will ensure you get an income payout, regardless of the market situation in the near future.
Yip advises people to learn about the features of an insurance policy before buying it, just as they would understand the “specs” of a car before a purchase. “Many people are very confused by the description of the coverage, so they face confusion when they make a claim.
“You cannot blame the insurance company for not serving your needs. The onus is on you to find out more information about what you are buying,” she stresses.
Yip says, frankly, that an insurance policy may not be able to cover a person for every eventuality that occurs, or be enough to cover all the medical costs in the event of an illness.
This is why she strongly advocates getting the family involved.
“Family is a very important part of financial and retirement planning. Family members should think about how to save collectively for the future. Be creative. For instance, create a fund which members can chip in, for medical emergencies later on. This will also prevent any arguments or ugly scenes when the time comes.”
Yip also suggests that children can be a form of life insurance. So, involve them in your retirement savings and support.
“The Singapore Government has made this law through the Maintenance of Parents Act, which requires children with appropriate income level to support elderly parents who are not able to subsist themselves,” she explains.
If possible, delay retirement, she adds. “Continue to work for as long as possible so you can have peace of mind that you are able to support yourself and your family until much later. Having a job is a form of insurance by itself!”
Lee’s advice is to diversify your retirement portfolio. In other words, spread out your eggs into several baskets, so that your retirement plan will not be affected by just a single financial event.
Retirement planning is nothing to fear, even if you don’t have a mind for numbers. So start planning for your nest egg today, to ensure a comfortable and enjoyable life in the years to come.
A Million ringgit just isn’t what it used to be. So if you’re thinking of retiring at 40 after making your first million, you might have to make new plans.
Simply having a chunk of money in the bank will not guarantee security, especially after you retire and face a completely different lifestyle with new financial needs. What you need is a sustainable retirement fund that will protect you from the uncertainties of the global financial situation and the increasing cost of living.
Personal financial coach and financial planner Carol Yip encourages people to plan their retirement savings wisely. She believes that people should have various reserves of funds, and regularly review their lifestyle to assess whether their nest egg will be sufficient.
Aside from daily living expenses and post-retirement luxuries, medical costs are our biggest concern during this period.
Even if we are in relatively good health, old-age diseases will start to creep up on us and take their toll in our fifth or sixth decade.
With the rising costs of healthcare, will our savings be enough to cover doctors’ bills, medications and annual checkups? We cannot leave this up to fate.
A 2008 survey conducted by a local insurance company found that although 72% of the respondents claimed they were saving for retirement, 41% did not have a concrete plan for how to build their retirement funds. They just saved as much as they could and hoped that it would be enough.
(The survey interviewed 1,024 Malaysians with a monthly household income of RM3,000 and above, living in urban centres in Peninsular Malaysia and Sabah and Sarawak.)
Of those who saved, 64% did not consciously separate their savings for retirement. The survey was repeated in 2009, where as many as 91% of respondents said they were not sure how much would be needed for retirement.
“Many people have no clue about saving for retirement. We are so immersed in our daily work and challenges that financial planning becomes our lowest priority,” Yip laments.
This has led to far too many people who save haphazardly, or not at all, only to face the cruel truth when they lose their fixed income.
Children can be a form of life insurance, says a financial consultant - File photo The key point in retirement saving is not to begin only when you are retired or close to it! Instead, you should start saving as soon as you have a salary, so that you’ll have more time to set funds aside and grow it into a handsome pot of money.
“Knowing what you want to do at retirement and how much it costs to live the lifestyle you desire are crucial factors to consider. This should form the basis of a good retirement plan,” advises David Lee, senior wealth manager of Prudential Assurance Malaysia Bhd.
If you don’t know where to begin, there are many tools (see below) or experts available to help you work out your retirement “number” and plan your savings accordingly.
Retirement saving isn’t about hoarding money. It is about devising a plan that meets your unique financial situation and needs. It is also important to understand where you are in life now and where you are heading before making any plans.
Yip advises people to treat their lives as a business. “When you run a business, you have business plans, budgets, management meetings, and projections.
“Similarly, look at your own life and ask yourself, ‘Am I going to make more money next year, or is it going to be tough? Will I get a promotion or more bonuses? Is my lifestyle getting more expensive? Am I going to get married and have children?”
Constant review of your lifestyle, priorities and needs will help you determine whether your plan needs to be modified. For instance, if you get a salary raise, you can afford to make new investments, rather than spend it all on a bigger car.
People should create their own forms of retirement funds, or what Yip calls “self-insurance”. One is spoilt for choice, as you can choose to invest in fixed deposits, unit trusts, equities (stocks and shares), investment-linked insurance, property or even investment in a business.
Your choice of financial tool(s) depends on how much time you have, how much risks you are willing to take and your income level.
If you are in your 20s or 30s and are just establishing your career, regular investing and saving is an effective and convenient way to help you reach your retirement goal, says Lee.
“There are insurance products that ‘force’ you to save on a regular basis, and subsequently pay you a stream of guaranteed monthly income at retirement. As you have more time to ride the ups and downs of the market, you can also afford to take more risks investing in equities.”
If this article is sounding alarm bells because you are nearing retirement but have nothing apart from your EPF savings, it’s not too late to begin.
“At this age, you should ideally have adequate insurance protection, especially medical insurance,” Lee says, adding that people starting in their 40s or 50s should take far more conservative investment risks.
Most people would have FD savings, but if you are concerned that FD returns cannot keep up with the inflation rate, you could put the lump sum money in single premium insurance plans that offer a shorter accumulation period and provide guaranteed monthly income upon retirement, he adds.
It is important to look for an insurance plan that will ensure you get an income payout, regardless of the market situation in the near future.
Yip advises people to learn about the features of an insurance policy before buying it, just as they would understand the “specs” of a car before a purchase. “Many people are very confused by the description of the coverage, so they face confusion when they make a claim.
“You cannot blame the insurance company for not serving your needs. The onus is on you to find out more information about what you are buying,” she stresses.
Yip says, frankly, that an insurance policy may not be able to cover a person for every eventuality that occurs, or be enough to cover all the medical costs in the event of an illness.
This is why she strongly advocates getting the family involved.
“Family is a very important part of financial and retirement planning. Family members should think about how to save collectively for the future. Be creative. For instance, create a fund which members can chip in, for medical emergencies later on. This will also prevent any arguments or ugly scenes when the time comes.”
Yip also suggests that children can be a form of life insurance. So, involve them in your retirement savings and support.
“The Singapore Government has made this law through the Maintenance of Parents Act, which requires children with appropriate income level to support elderly parents who are not able to subsist themselves,” she explains.
If possible, delay retirement, she adds. “Continue to work for as long as possible so you can have peace of mind that you are able to support yourself and your family until much later. Having a job is a form of insurance by itself!”
Lee’s advice is to diversify your retirement portfolio. In other words, spread out your eggs into several baskets, so that your retirement plan will not be affected by just a single financial event.
Retirement planning is nothing to fear, even if you don’t have a mind for numbers. So start planning for your nest egg today, to ensure a comfortable and enjoyable life in the years to come.
Sunday, December 5, 2010
Takaful Insurance - Malaysia
Unlike conventional insurance, this scheme is about the intention to help one another in financial protection.
BEFORE Prophet Muhammad and the coming of Islam, tribes in the Arab desert lived by a social code whereby a group would bind together, in good times and bad.
If an individual member of their unit suffered harm, loss of property or death, the unit would cover such loss by revenge, blood-letting, or payment of blood money.
“Bound by these principles of al-aqilah (societal responsibility) and diat (blood money), they believed that if you harm somebody, you have to recompense another person for the harm caused. But if you cannot pay, then the community will come together to pay,” says Datuk Syed Moheeb Syed Kamarulzaman, chairman of the Malaysian Takaful Association.
Syed Moheeb adds that the concept of a group sharing in one’s misfortune was also prevalent among Chinese traders of yore.
“For instance, if those in a caravan group were attacked by bandits, if something happened to their camels, or if they faced trouble on their ship, then the rest of the group would chip in to pay for any losses.”
These age-old practices form the basis of the Takaful insurance system, which became more clearly defined under the spiritual beliefs of Islam, guided by the rules and regulations of Syariah.
Driven by the value of mutual protection, a Takaful scheme is similar to conventional insurance in many ways.
“In Takaful, many pay into a pool and funds from the pool are used to help the unfortunate few,” says Syed Moheeb.
“The difference is that, in Takaful, people put their money into the pool with the specific intention of helping the unfortunate.”
As illustrated by the historical perspective above, Takaful is based on the simple community practice of coming together to help one another.
“In Takaful, there are many edicts that encourage us to take care of other people, to ensure the financial stability of our kin, as well as to ensure that there is responsibility and bond with the society as a whole. In conventional insurance, which is purely a commercial transaction, these values are absent.”
The belief is that if you join a Takaful scheme with the pure intention of protecting the unfortunate, such good will be recompensed to you in the form of divine blessings later on.
Although Syed Moheeb quotes theQuran – “Help ye one another in righteousness and piety but help ye not one another in sin and rancour” (Al Maidah: 2) – he also notes that the concept of divine blessing is shared by all religions and philosophical beliefs.
However, he is not out to make Takaful sound more noble than conventional insurance.
“Insurance companies provide a service. They take heavy risks, and aim to be compensated for that. It is simply that the altruistic nature of Takaful works to the advantage of participants because it promotes the spirit of cooperation and brotherhood. If there is a surplus, then the participants will get something back.
“In Takaful, everyone’s risk is shared. So, the pool of money does not belong to the Takaful operator, who is only managing it. It belongs to all those who participate in the scheme,” he explains.
On the other hand, when you buy conventional insurance, you are transferring your risk to the insurance company. Hence, your money belongs to the company, which will use the funds to pay the unfortunate and keep the balance.
In practice, there are also other differences between Takaful and conventional insurance policies.
Although the types of available Takaful products are similar to conventional insurance in terms of classes (life, family, motor, medical), they are based on Syariah-compliant principles that create differences in the way a person contributes to the fund and receives benefits.
Syed Moheeb explains: “In Islamic law, any exchange must be fair in value (fair exchange or equality), and it must take place within a stipulated time frame (certainty).
“Therefore, to make the concept of insurance applicable under Syariah law, the wording of the contract is changed, so that it is not a contract of exchange, but a contract of donation.
“In the proposal form, the policyholder declares that ‘I donate into this pool and appoint a Takaful operator as the managing agent to handle the funds according to the best practices’.”
Malaysia is the No.2 Takaful market in the world, second only to Saudi Arabia. With eight companies and four more to come, the Takaful industry here has been growing at an average rate of 40% per year, compared with 12% for the conventional insurance industry, he adds.
It is significant that Syed Moheeb uses the phrase “joining a Takaful scheme”, instead of “buying Takaful”. “We do not sell Takaful, but we invite people to participate in the scheme or the fund.”
He is also quick to refute the perception that Takaful is only for Muslims.
“This was never the case. Perhaps this perception came about because our target market was Muslims, due to the fact that only one in 20 Muslims had any life insurance, so it made more sense to sell family or life Takaful to them.
“But of course, non-Muslims can join the Takaful scheme as well. Anybody who wants to protect his financial risk can benefit from Takaful.”
In most Takaful companies in Malaysia, an average of three or four out of 10 policyholders are non-Muslims, demonstrating their increasing interest in Takaful products, of which there is a wide range of choices.
Syed Moheeb advises consumers to do their research well before choosing which fund to join.
Even if you have already purchased conventional insurance for life, family, medical, or motor coverage, you can still consider Takaful funds to plug any gaps in your existing coverage.
“One should compare the product features, ensure the pricing is commensurate with that and look for a company that is able to provide good service.
“Do check the claims-paying capabilities of the company, as well as its reputation.
“Make sure you have a good and responsible Takaful broker or agent who will help you determine if you have protected yourself to the optimum level. Our priority is helping you ensure that all your needs are addressed,” he assures.
BEFORE Prophet Muhammad and the coming of Islam, tribes in the Arab desert lived by a social code whereby a group would bind together, in good times and bad.
If an individual member of their unit suffered harm, loss of property or death, the unit would cover such loss by revenge, blood-letting, or payment of blood money.
“Bound by these principles of al-aqilah (societal responsibility) and diat (blood money), they believed that if you harm somebody, you have to recompense another person for the harm caused. But if you cannot pay, then the community will come together to pay,” says Datuk Syed Moheeb Syed Kamarulzaman, chairman of the Malaysian Takaful Association.
Syed Moheeb adds that the concept of a group sharing in one’s misfortune was also prevalent among Chinese traders of yore.
“For instance, if those in a caravan group were attacked by bandits, if something happened to their camels, or if they faced trouble on their ship, then the rest of the group would chip in to pay for any losses.”
These age-old practices form the basis of the Takaful insurance system, which became more clearly defined under the spiritual beliefs of Islam, guided by the rules and regulations of Syariah.
Driven by the value of mutual protection, a Takaful scheme is similar to conventional insurance in many ways.
“In Takaful, many pay into a pool and funds from the pool are used to help the unfortunate few,” says Syed Moheeb.
“The difference is that, in Takaful, people put their money into the pool with the specific intention of helping the unfortunate.”
As illustrated by the historical perspective above, Takaful is based on the simple community practice of coming together to help one another.
“In Takaful, there are many edicts that encourage us to take care of other people, to ensure the financial stability of our kin, as well as to ensure that there is responsibility and bond with the society as a whole. In conventional insurance, which is purely a commercial transaction, these values are absent.”
The belief is that if you join a Takaful scheme with the pure intention of protecting the unfortunate, such good will be recompensed to you in the form of divine blessings later on.
Although Syed Moheeb quotes theQuran – “Help ye one another in righteousness and piety but help ye not one another in sin and rancour” (Al Maidah: 2) – he also notes that the concept of divine blessing is shared by all religions and philosophical beliefs.
However, he is not out to make Takaful sound more noble than conventional insurance.
“Insurance companies provide a service. They take heavy risks, and aim to be compensated for that. It is simply that the altruistic nature of Takaful works to the advantage of participants because it promotes the spirit of cooperation and brotherhood. If there is a surplus, then the participants will get something back.
“In Takaful, everyone’s risk is shared. So, the pool of money does not belong to the Takaful operator, who is only managing it. It belongs to all those who participate in the scheme,” he explains.
On the other hand, when you buy conventional insurance, you are transferring your risk to the insurance company. Hence, your money belongs to the company, which will use the funds to pay the unfortunate and keep the balance.
In practice, there are also other differences between Takaful and conventional insurance policies.
Although the types of available Takaful products are similar to conventional insurance in terms of classes (life, family, motor, medical), they are based on Syariah-compliant principles that create differences in the way a person contributes to the fund and receives benefits.
Syed Moheeb explains: “In Islamic law, any exchange must be fair in value (fair exchange or equality), and it must take place within a stipulated time frame (certainty).
“Therefore, to make the concept of insurance applicable under Syariah law, the wording of the contract is changed, so that it is not a contract of exchange, but a contract of donation.
“In the proposal form, the policyholder declares that ‘I donate into this pool and appoint a Takaful operator as the managing agent to handle the funds according to the best practices’.”
Malaysia is the No.2 Takaful market in the world, second only to Saudi Arabia. With eight companies and four more to come, the Takaful industry here has been growing at an average rate of 40% per year, compared with 12% for the conventional insurance industry, he adds.
It is significant that Syed Moheeb uses the phrase “joining a Takaful scheme”, instead of “buying Takaful”. “We do not sell Takaful, but we invite people to participate in the scheme or the fund.”
He is also quick to refute the perception that Takaful is only for Muslims.
“This was never the case. Perhaps this perception came about because our target market was Muslims, due to the fact that only one in 20 Muslims had any life insurance, so it made more sense to sell family or life Takaful to them.
“But of course, non-Muslims can join the Takaful scheme as well. Anybody who wants to protect his financial risk can benefit from Takaful.”
In most Takaful companies in Malaysia, an average of three or four out of 10 policyholders are non-Muslims, demonstrating their increasing interest in Takaful products, of which there is a wide range of choices.
Syed Moheeb advises consumers to do their research well before choosing which fund to join.
Even if you have already purchased conventional insurance for life, family, medical, or motor coverage, you can still consider Takaful funds to plug any gaps in your existing coverage.
“One should compare the product features, ensure the pricing is commensurate with that and look for a company that is able to provide good service.
“Do check the claims-paying capabilities of the company, as well as its reputation.
“Make sure you have a good and responsible Takaful broker or agent who will help you determine if you have protected yourself to the optimum level. Our priority is helping you ensure that all your needs are addressed,” he assures.
Saturday, December 4, 2010
Protect Yourself
MY son said to me while I was driving, Daddy, please drive properly. Use both your hands!
I had momentarily taken my left hand off the steering wheel and was placing it on the arm rest. I was pleasantly surprised by his sensible remark and promptly obeyed.
It seemed like only yesterday that he was born, and then in the blink of an eye, my son has grown up!
It was more than three years ago when I first came to Malaysia to work. At that time, my wife had just conceived our first child, a boy.
Today, besides being a chatty and active two-and-a-half year old boy, he is even giving me tips on safe driving! I wonder where he learnt such things, perhaps from his nursery school.
Engage any parents in a conversation regarding their children and you will hear the excitement in their voice and see the sparkle in their eyes. And what would parents do to protect their children? Just about everything and anything!
Such commitment is perfectly understandable.
Someone recently pointed out an in-flight safety procedure that seems to contradict the parental instinct.
In one segment of the standard flight safety video, passengers are informed that in the case of an emergency, oxygen masks will automatically drop from the overhead compartment of the cabin. Adults who are travelling with young children are instructed to attend to themselves first before helping the children.
One would think the adult should assist the child first. But this procedure is exactly what is needed to give children the best chance of surviving an emergency.
The adults have to remain conscious and alert to be able to help the children and ensure their safety.
So to help the kids, adults must first help themselves!
This concept illustrates an important concept of wealth management protecting ourselves in order to provide for our children.
When my children were born, I bought additional insurance policies. One would have thought that these were all child-specific policies. Well, yes and no.
Yes, I bought insurance covering health, critical illness, etc, for my children. And no, I did not just buy policies for them, but more importantly, I bought additional life insurance policies for my wife and I.
Why? It is based on the same principle as the oxygen mask safety procedure. In order to ensure that children will be provided for financially, it is vital that parents first protect their income streams, before they can hope to ensure their children's financial safety.
Some years back, a friend's parents were unfortunately involved in a fatal road accident.
Bearing the grief of losing loved ones was significant but at least she had no financial difficulties to worry about as her parents had the whole family and assets well insured.
For the more affluent parents of today, there is also a conscious effort to provide their children with an early head-start in life. This can take the form of funds for post-graduate studies, or for the down-payment for their child's first car or house.
Till today, my parents still say that they are saving the allowance I give them on my behalf!
I certainly would want to provide my children with the very best healthcare and education. And this means that I have to first take care of myself and my wife too.
So the next time you hear the safety flight instructions, remember that they are right. A conscious parent can do a lot more for his/her child than an unconscious one.
So whenever I drive now, I am reminded of my son's comment to drive safely by keeping both hands on the wheel. Ensuring my own safety is the first step in establishing the financial security for my family and loved ones.
Tat Han Chong: Senior Vice-president and senior head of UOB's personal financial services division.
I had momentarily taken my left hand off the steering wheel and was placing it on the arm rest. I was pleasantly surprised by his sensible remark and promptly obeyed.
It seemed like only yesterday that he was born, and then in the blink of an eye, my son has grown up!
It was more than three years ago when I first came to Malaysia to work. At that time, my wife had just conceived our first child, a boy.
Today, besides being a chatty and active two-and-a-half year old boy, he is even giving me tips on safe driving! I wonder where he learnt such things, perhaps from his nursery school.
Engage any parents in a conversation regarding their children and you will hear the excitement in their voice and see the sparkle in their eyes. And what would parents do to protect their children? Just about everything and anything!
Such commitment is perfectly understandable.
Someone recently pointed out an in-flight safety procedure that seems to contradict the parental instinct.
In one segment of the standard flight safety video, passengers are informed that in the case of an emergency, oxygen masks will automatically drop from the overhead compartment of the cabin. Adults who are travelling with young children are instructed to attend to themselves first before helping the children.
One would think the adult should assist the child first. But this procedure is exactly what is needed to give children the best chance of surviving an emergency.
The adults have to remain conscious and alert to be able to help the children and ensure their safety.
So to help the kids, adults must first help themselves!
This concept illustrates an important concept of wealth management protecting ourselves in order to provide for our children.
When my children were born, I bought additional insurance policies. One would have thought that these were all child-specific policies. Well, yes and no.
Yes, I bought insurance covering health, critical illness, etc, for my children. And no, I did not just buy policies for them, but more importantly, I bought additional life insurance policies for my wife and I.
Why? It is based on the same principle as the oxygen mask safety procedure. In order to ensure that children will be provided for financially, it is vital that parents first protect their income streams, before they can hope to ensure their children's financial safety.
Some years back, a friend's parents were unfortunately involved in a fatal road accident.
Bearing the grief of losing loved ones was significant but at least she had no financial difficulties to worry about as her parents had the whole family and assets well insured.
For the more affluent parents of today, there is also a conscious effort to provide their children with an early head-start in life. This can take the form of funds for post-graduate studies, or for the down-payment for their child's first car or house.
Till today, my parents still say that they are saving the allowance I give them on my behalf!
I certainly would want to provide my children with the very best healthcare and education. And this means that I have to first take care of myself and my wife too.
So the next time you hear the safety flight instructions, remember that they are right. A conscious parent can do a lot more for his/her child than an unconscious one.
So whenever I drive now, I am reminded of my son's comment to drive safely by keeping both hands on the wheel. Ensuring my own safety is the first step in establishing the financial security for my family and loved ones.
Tat Han Chong: Senior Vice-president and senior head of UOB's personal financial services division.
Wednesday, December 1, 2010
Up to RM250,000
KUALA LUMPUR: The Malaysia Deposit Insurance Corporation Bill 2010 was tabled for first reading in Dewan Rakyat on Tuesday, paving the way to increase the deposit insurance limit from the current RM60,000 to RM250,000 for next year.
The bill states, under its scope of coverage for deposits, that the corporation would insure Islamic and conventional deposits up to the amount prescribed by the minister on the recommendation of the corporation.
Finance Minister Datuk Seri Najib was reported to have announced on May 11 that the deposit insurance limit would be increased to RM250,000 effective 2011.
He was also reported to have said that the Malaysia Deposit Insurance Corporation would bring forward legislation to enable the government to increase the deposit insurance limit.
Deputy Finance Minister Datuk Dr Awang Adek Hussein tabled the bill set to replace the existing Malaysia Deposit Insurance Corporation Act 2005.
The bill will be debated in this current meeting, said Dr Awang Adek.
The temporary government deposit guarantee would lapse as scheduled at the end of this year and the enhanced protection package would continue to provide increased protection to depositors, said Dr Awang.
The bill seeks to provide for the continuing existence of the Malaysia Deposit Insurance Corporation established under the Malaysia Deposit Insurance Corporation Act.
The bill will also provide for the establishment of an explicit national takaful and insurance benefits protection system and enhancements to the existing national deposit insurance system.
These are part of the legislative proposals to enhance financial consumer protection for Malaysians as Malaysia exits the temporary Governent Deposit Guarantee scheme on Dec 31.
The existing act will be amended to improve the design of its financial safety net mechanism, to equip the Malaysia Deposit Insurance Corporation with adequate powers to effectively deal with troubled member institutions, in line with developments in other jurisdictions following the global financial crisis, the bill stated.
The bill states, under its scope of coverage for deposits, that the corporation would insure Islamic and conventional deposits up to the amount prescribed by the minister on the recommendation of the corporation.
Finance Minister Datuk Seri Najib was reported to have announced on May 11 that the deposit insurance limit would be increased to RM250,000 effective 2011.
He was also reported to have said that the Malaysia Deposit Insurance Corporation would bring forward legislation to enable the government to increase the deposit insurance limit.
Deputy Finance Minister Datuk Dr Awang Adek Hussein tabled the bill set to replace the existing Malaysia Deposit Insurance Corporation Act 2005.
The bill will be debated in this current meeting, said Dr Awang Adek.
The temporary government deposit guarantee would lapse as scheduled at the end of this year and the enhanced protection package would continue to provide increased protection to depositors, said Dr Awang.
The bill seeks to provide for the continuing existence of the Malaysia Deposit Insurance Corporation established under the Malaysia Deposit Insurance Corporation Act.
The bill will also provide for the establishment of an explicit national takaful and insurance benefits protection system and enhancements to the existing national deposit insurance system.
These are part of the legislative proposals to enhance financial consumer protection for Malaysians as Malaysia exits the temporary Governent Deposit Guarantee scheme on Dec 31.
The existing act will be amended to improve the design of its financial safety net mechanism, to equip the Malaysia Deposit Insurance Corporation with adequate powers to effectively deal with troubled member institutions, in line with developments in other jurisdictions following the global financial crisis, the bill stated.
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