Young Should Invest In Life

Consumers not to ignore the importance of acquiring life insurance from a young age. It is a necessity younger people cannot afford to forgo. Often younger consumers focus more on what they want rather than what they need and, as a result, view spending money on life insurance as a hard-to-justify grudge purchase, along with the belief that life insurance is not really necessary in your early 20s, that it is expensive and it is easier to save money where you can get it quickly and easily.

Rather what should be considered is the positive side of taking out a life policy when you get your first pay cheque. Investing in a policy at a younger age resulted in significantly lower policy costs which are less likely to make a dent on your disposable income.

Another reason to consider life insurance is because it forces you to consider your long-term future and ensure that you get into the habit of putting a bit away that will help you should the unforeseeable happen.

Younger consumers should study the types of life insurance plans available in the market today & select one fitting their needs & budget. When you decide to get a policy, select a company that you trust.

Yes You Need A Life

I'm in my 20s and I've heard that I need life insurance. I don't have kids, though, or a large amount of student loans ... do I still need it?

There is quite a bit of conflicting information in regards to life insurance.

Financial Obligation
I'd like to start with why you'd need life insurance. If you were to pass away, is there someone who depends on your financially that would be unable to support themselves (ie children, a spouse, or a parent that you support)?. Or if you are totally disabled and you need this money for health care, & home care.

Protection
There are many different types of life insurance. As a rule of thumb - life insurance should be purchased for financial protection planning. Therefore - a term insurance or whole life would be a good starter that would fit into your needs & budget.

Retirement
I would strongly discourage endowment or unit-linked policy. The reason is because I believe insurance should be used for protection planning and you should invest for retirement through EPF, Private Retirement Scheme or Mutual Funds.

I don't recommend that you try to do both by having a fancy insurance policy. In my opinion, it's very expensive to blend the two and there are high agent's commissions etc associated with these policies.

Term Insurance Versus Whole Life Insurance
If you determine that you need life insurance, you can take out a 20 or 30-year term life insurance policy and get much more coverage than you can for the monthly premiums on a whole life insurance policy with a far lower death benefit. It's better to get hundreds of thousands of dollars in additional coverage with term life insurance than to have an insurance policy that is slowly building up cash value. Also, did you know that oftentimes your insurance agent's commission on whole life insurance is equal to 100% of the first year of your premiums?

Group Insurance
Many companies offer group term life insurance equal to 1-2 times your salary as part of their company benefits package. If your company does, make sure you name a beneficiary for this policy. A beneficiary is the person who inherits the money if you die. This is generally enough money to pay for funeral costs and cover some other expenses like paying off your debts.

Group insurance is a temporary insurance & acts like a catch 22 plan. Once you leave employment - you are no longer insured under the employer's group insurance. If you are asked to leave because of illness - then you are unlikely to be accepted for new life insurance or premium loaded or benefits limited. For example - you are asked to leave employment due to cancer - your group insurance policy will cease to cover you - and you can forget about applying for new life insurance plan.

Indonesia Life Updates 2015

The value of unit-linked products will likely expand at a faster pace this year although insurers have seen constant declines in the growth of new premiums over the last three years. Indonesian Life Insurance Association (AAJI) communications director Christine Setyabudhi said the association hoped to book growth in the instrument, which combines insurance and investment, by 10 to 15 percent this year.

The target is lower than the 18 to 20 percent growth set for traditional insurance premiums.

Unit-linked new premium expansion has demonstrated a declining trend since 2013. Data from the AAJI showed that the product’s contribution to total life insurance premiums decreased from 46.84 percent in 2013 to 45.84 percent in 2014 and 45.12 percent last year.


Total new premiums reached Rp 57.60 trillion (US$4.31 billion) as of September last year.“Our survey shows that unit-linked holders prefer to buy traditional insurance products after purchasing one to two unit-links,” she said on the sidelines of a seminar on Friday.

However, she said unit-linked development had been overwhelming in the past five years as its premiums dominated total insurance.In 2015, unit-linked products contributed Rp 72.34 trillion, or 56.22 percent, of the insurance industry’s total premium of Rp 128.66 trillion, according to an unaudited report from the AAJI.

In 2014, the instrument reaped Rp 66.53 trillion, or 55.14 percent, of premiums worth Rp 120.65 trillion.The data also showed that unit-linked premiums grew by 8.73 percent year-on-year (yoy) last year.

Christine, who is also the president director and CEO of insurance company BCA Life, said several insurance companies had carried out market expanding measures to invite more people to buy unit-links.“They have tried to open middle and lower markets by offering cheaper monthly premiums, some of them starting as low as Rp 500,000,” she said.

Unit-links tapped just 1.4 percent of the country’s gross domestic product (GDP) last year, up from 1.11 percent in 2014, according to AAJI data.

The penetration rates were lower than those of total life insurance, which reached 3.1 percent of GDP last year.Indonesia Stock Exchange (IDX) evaluation and company monitoring unit head Poltak Hotradero said there was still enough cake for industry players given the low penetration of insurance in the public.

A similar view was expressed by Financial Services Authority (OJK) non-bank financial industry monitoring head M. Ihsanudin. He said life insurance companies could benefit from the positive macro-economic situation to tap deeper into the market.

“Now, we need to increase insurance agents and the public’s financial literacy so that they will share the same optimism,” he said.OJK data showed that the equity of the country’s life insurance industry stood at Rp 71 trillion and its assets were worth more than Rp 330 trillion as of December last year.

The value of the assets constituted 41 percent of Indonesia’s total insurance business assets.

Meanwhile, as much as 29 percent of the insurance industry’s portfolio was dominated by stocks, 24 percent by mutual funds, 17 percent by time deposits and 16 percent by bonds.

Who Is Dr Abu Balar Mohamad Diah

Tangga Batu MP Datuk Dr Abu Bakar Mohamad Diah - Deputy Minister of Science, Technology and Innovation - has expressed his dissatisfaction on social media over the large potholes along Bukit Rambai, Malacca.

The district office has not done anything after complaints were made. He then sarcastically encouraged people to take pictures of the potholes, saying that the view at the location was "beautiful".

Group Beats Policeman

A group of 10 men beat up a policeman after he asked them to move their cars at Taman Seri Taming near here. The incident occurred at about 6.30am on Sunday, when the victim and his friend were on their way to Taman Desa Baiduri on motorcycles.

The victim stopped when he saw two cars, with 10 men inside, parked in the middle of the road.
The policemen then asked the drivers of the grey Proton Waja and black Nissan Sentra to move their vehicles to the side of the road so they would not obstruct traffic.

The group of men appeared unhappy with the instruction and attacked the policeman, taking away his wallet and handphone after beating him up. He said that the victim was able to escape his attackers.

Death Of Life Insurance Agent

MetLife Inc. is preparing to part ways with a central force in the company’s history: its life-insurance agents. The nation’s largest life insurer by assets is in talks to sell a network of about 4,000 sales people to Massachusetts Mutual Life Insurance Co. It is “the end of an era for MetLife.

A sale of MetLife’s agent army would sever ties with an important contributor to the company’s rise as a nationwide giant. Decades ago MetLife had some 14,000 agents. For many years, they walked door to door to make sales and collect premiums. They became a fixture of American culture often portrayed in movies and television shows such as “Father Knows Best.”


The potential move is part of a larger effort by MetLife to slim down and respond to a shifting regulatory environment. It decided in January to divest a large piece of its U.S. life-insurance unit to reduce some of the capital burden it is expected to face under new federal regulations.

The talks also are a sign of the times for the life-insurance business broadly. Life-insurance agents at MetLife and other large companies began dropping in number as mutual funds gave families savings alternatives, and sales-practice scandals led to widespread class-action litigation and settlements.

Industrywide sales of individual life-insurance policies have dropped 45% since the mid-1980s, according to the most recent data available from industry-funded research firm Limra. About 30% of American households have no life insurance at all, up from 19% about 30 years ago.

Meanwhile, the number of full-time U.S. agents affiliated with a specific company like MetLife dipped to 145,000 in 2013, according to the most recent information available from Limra. At the industry’s height in the 1970s, more than 250,000 agents were attached to specific companies, according to a different Limra calculation.

MetLife and other publicly traded life insurers increasingly have turned to independent financial advisers, stockbrokers, banks and direct marketing for help as their sales networks diminished. In the past, MetLife has even experimented with touch-screen-equipped kiosks at Wal-Mart Stores

Tougher regulations have made it even more difficult to keep large sales armies in place as insurers spend more heavily on training, compliance and other monitoring. Insurers often spend tens of thousands of dollars for each agent in the initial years, on everything from income subsidies to medical benefits. “It’s no secret a career agency system is an expensive proposition,” said Piper Jaffray analyst John Nadel.

What set MetLife’s decision in motion was its designation by the U.S. as “systemically important” under the 2010 Dodd-Frank financial-regulatory overhaul law. That means regulators believe the company could pose significant risks to the financial system should it collapse. The law requires that those firms hold extra capital.

MetLife is challenging that designation in federal court and it cited the law’s requirements as a reason for its decision last month to spin off, sell or take public a piece of its U.S. life-insurance unit.
Another U.S. insurer labeled systemically important, American International Group Inc. also announced last month that it would sell its adviser group, striking a deal with a private-equity firm and a Canadian pension-fund manager. That group operates with roughly 5,000 independent advisers that sell products from AIG and others. The sales price is $400 million to $500 million, according to people familiar with that transaction.

An additional driver away from big agent networks, analysts said, is a proposed Labor Department rule that would require advisers working with retirement accounts to act as fiduciaries, putting their clients’ interest first.

The potential buyer, Springfield, Mass.-based Massachusetts Mutual, currently has about 5,600 agents. Also known as MassMutual, it is one of a small number of prominent life insurers owned by their policyholders. The deal being discussed would be $200 million to $400 million, said a person familiar with the matter.


Insurers owned by policyholders have remained committed to career sales forces despite the pullback by publicly traded rivals. New York Life Insurance Co., for example, has 12,000 agents, according to a spokesman. Because these companies don’t report earnings quarterly, they face less pressure to bring down the costs associated with recruiting and training agents.

Some agents that currently sell MetLife products say they expect little to change day to day because both firms allow salespeople to offer a range of life-insurance products. But it is unclear whether and how agent compensation structures might change if the deal is completed, they said.

Philippine Life Update

Increased product awareness and sustained economic expansion are fuelling double-digit growth in the Philippines’ insurance sector, as the emergence of micro-insurance products helps boost penetration rates and premiums. The industry posted a record performance in 2015, as total premium income rose by 18.2% to reach P233bn ($4.9bn), according to the sector regulator, the Insurance Commission (IC).

Commissioner of the IC, reported that the life insurance segment posted the strongest growth, with premium income rising by 18.8% to P188.5bn ($3.96bn) for the year. The non-life component, meanwhile, which typically posts annual growth of between 5% and 10%, increased to P37.3bn ($783.1m), a 16.2% year-on-year jump.

Strong growth is expected to continue this year - predicting that life and non-life premium income could rise by as much as 28% in 2016, to around P300bn ($6.3bn).

But despite solid expansion in premium revenue and the Philippines’ status as one of the most liberalised ASEAN markets, overall penetration rates remain low.

Premiums in the Philippines as a share of GDP stood at around 1.7% in 2014, compared to 2.9% in Indonesia, 5.2% in Thailand and 7.6% in Singapore, according to research from Germany-based insurer Allianz.

A sizeable portion of that growth – in terms of both policyholders and, to a lesser extent, premiums – is expected to come from the micro-insurance segment, a form of low-cost insurance that offers premiums equivalent to a small portion of the daily minimum wage.

As of the end of 2015, some 30m of the 38m Filipinos covered by insurance carried some form of micro-insurance, the IC reported.

The regulator expects micro-insurance uptake to rise to 50m in the next two to three years, to cover roughly half the population. If achieved, this would mark a more than 15-fold increase over the 3.1m policyholders registered in 2009, the year in which the segment became fully regulated.

While low-cost micro-insurance products account for more than 75% of all policies issued, they represent only a fraction of combined premium revenues, at just 3% of the industry total.

According to current regulations, premiums for micro-insurance products cannot exceed 7.5% of the daily non-agricultural minimum wage – a policy aimed at encouraging uptake of insurance coverage among low-income earners.

However, increased awareness of coverage benefits and the broader range of products authorised by the IC are expected to boost the micro-insurance segment’s premium share to 5% or more by 2018.
The range of products approved by the IC has steadily increased in recent years, with nearly 170 options ratified by the regulator as of early 2014.

Life and non-life policies account for the majority of products sold, though the IC announced early this year that micro-agriculture, micro-health and micro-pre-need products, such as education and pension insurance, would soon be available on the market.

At the end of January revised micro-insurance regulations were unveiled, clarifying the roles and responsibilities of agents and brokers; setting out rules for distribution channels; and establishing guidelines for product-bundling and risk-sharing between local and foreign insurers.

While mutual benefit associations (MBAs) and cooperatives have traditionally dominated the micro-insurance industry in the Philippines, larger, more established, private insurers have been increasingly eyeing the segment.

“In the past, traditional insurers saw the poor as beyond the reach of insurance. With micro-insurance, they realised that the only thing necessary for [low-income] people to buy insurance is to make insurance affordable and accessible.

The IC recently announced that several foreign insurers were planning to establish operations in the Philippines, with a handful of operators from Japan, Taiwan and Europe reportedly showing a strong interest in the market.

Mainstream insurers could gain access to smaller, rural markets through link-ups with existing micro-financial services providers, such as MBAs. This scheme has already proved successful with the expansion of micro-banks into previously unserved municipal districts, particularly in rural areas.

According to the IC, local partnerships or acquisitions could offer an avenue for market entry.

There are still a number of companies that have not renewed their licences yet, so that could be an indication someone is coming. This could also help encourage local policywriters to expand into the micro-insurance segment as a means of broadening their base and establishing strong market share in anticipation of increased foreign competition.

Death Is Expensive

 

Even in death, Malaysians are not spared the rising cost of living, as funeral services and ceremonies have become more expensive in recent years, compounded by the goods and services tax (GST). Checks at various funeral parlours showed that a non-Muslim’s last journey could cost nothing less than RM4,800. Previously, burial services cost between RM4,200 and RM4,500. Today, prices start from RM4,800.

Ernest, who has been running the business with his partner Lianna for the past three years, said his company's funeral packages start at RM4,800 and only applied to Christian and Buddhist funerals. For the Taoists, it is more expensive because there are a lot of customs and priests involved and a lot of prayers and materials are required for the funeral service. At RM4,800 there is no way I can get it done. The Taoist funeral services start at RM8,500.

Cremation costs varied according to location. The Petaling Jaya Municipal Council charges RM180. In Cheras, it is RM100 only. In Sentul it is RM400 if firewood is used. In Loke Yew, it is RM600 for a firewood cremation. However, in Shah Alam it can cost up to RM750.

Al-Ikhlasiah Pantai Dalam mosque undertaker, Hamdan Mohd Yusof said for Muslims, the cost for cleaning the remains, Islamic prayers and the shroud as well as burial came up to RM950. The motorcycle workshop owner, 47, said he has been offering undertaker services on a volunteer basis for the past 15 years. Giving a breakdown of the cost of a Muslim burial, Hamdan said it cost RM350 to dig a grave, while the cost of cleaning and shrouding the remains was RM150.

The cost of the hearse is set at RM1 per kilometre, he added, saying that if someone wanted to transport a person’s remains from Seremban to Kuala Lumpur, the round trip for the hearse could cost as much as RM100. But that price, he added, was subject to current transportation costs and highway tolls. Hamdan said all the payments were channelled to the mosque's burial fund, without any profits taken for himself or anyone from the mosque.

FWD Thailand 68% Growth Rate

FWD LIFE Insurance Thailand aims to become a top-five company by 2018 after reporting strong performance last year. Currently the country's eighth-ranked life-insurance company, FWD said its annual premium equivalent in 2015 grew by 68 per cent year on year, the fastest in the sector, compared with the market average of 9 per cent, while its total premium income increased by 20 per cent.

The company said it also had Thailand's fastest-growing agency channel last year with 90-per-cent growth from 2014 and the fastest-growing bank channel at 49 per cent. It attributed that to its strong partnership with TMB Bank and the launch of new products focusing on needs identified through customer research.

FWD reorganised its operations to build a synergy across all TMB branches. It said it also recorded the fastest-growing alternative channel in 2015 with 240-per-cent growth, which was supported by its partnerships with brokers across Thailand in retail sales, direct marketing and group business.

Chief executive Mike Plaxton said FWD would become a top-five life-insurance company by focusing on its staff.  These are "the same people that gave a great result last year and who live our deep commitment to being a customer-led company that helps to take care of our customers' financial freedom so they can live their passions today", he said.

FWD plans to launch a number of strategic initiatives in 2016 including mobile payments via Line, the launch of a new responsive corporate website and customer engagement initiatives FWD-branded apps and games.

Indonesia Workers' Benefits

The House of Representatives passed the controversial public housing savings (Tapera) bill into a law on Tuesday despite opposition from employers.The new law will become the legal basis for the establishment of a housing savings program for workers called Tapera.

The housing savings program is a way for the government to help low-income people attain proper housing, Public Works and Public Housing Minister Basuki Hadimuljono said in his speech after the bill’s approval. He said that the new program would help tackle the country’s current housing backlog, which stood at 13.5 million homes in 2014.

Following the approval of the bill, the government will establish a Tapera committee in three months and a body to manage the fund in six months.

Under the Tapera program, formal workers and independent workers with a salary above the minimum wage are obliged to join the program, while independent workers with a salary below minimum wage and foreign workers working in the country for more than six months can voluntarily join.

The mandatory savings amount has not been decided in the new law, but it will be about 2.5 percent of a worker’s salary. Two percent will be paid from the workers’ wages, while the other will be contributed by the employers.

The Indonesian Employers Association (Apindo) strongly opposed the program as it deemed that the contributions for the savings program would place a burden on finances. The association said the program also overlapped with another government housing program covered in the Workers Social Security Agency (BPJS Ketenagakerjaan), which also provides its members with down payment assistance for home purchases.

Employers are currently required to pay at least 19 percent of workers’ wages for workers’ compensation, such as for old-age benefits, life insurance, workplace incident insurance, pensions, medical insurance, in addition to annual wage increases, which reach 14 percent a year.

Basuki added that the ministry would also merge its housing loan liquidity facility (FLPP), which has total funds of Rp 33.3 trillion (US$2.4 billion), with the Tapera savings program, to aid financing for low-income people’s housing.

The government will also source funds amounting to Rp. 10 trillion for the Tapera management body from the existing Housing Savings Advisory Board for Civil Workers (Bapertarum-PNS).

Basuki said that the technical details, including the percentage of the contribution for the savings program, will be stipulated in seven government regulations to be issued within two years, as well as one presidential regulation, one presidential decree and a regulation on the Tapera fund management body.

 “When we draft the government regulation, we will involve businesspeople, and we will also adjust the percentage to their financial capability and economic conditions,” said Tapera special committee head Yoseph Umar Hadi.

He said that the timing would be used by the government to consolidate the current employment burden bore by businesspeople, including the old age benefit (JHT) fund and pension fund.

The ministry’s director general for housing finance, Maurin Sitorus, said that the program might take full effect in 2018, providing time for businesspeople to join the program. - See more at: http://www.thejakartapost.com/news/2016/02/24/bill-tapera-savings-program-passed-law.html#sthash.YifHiYfK.dpuf

Thailand Life Updates 2015

The Thai Life Assurance Association (TLAA) hopes that an improving economy will support the growth of the life-insurance industry, but it will closely monitor purchasing power after the prolonged economic slowdown and the high household debt.

 

Last year, total premium income of the life-insurance industry grew by 6.7 per cent, lower than the target of 7 per cent because of lower purchasing power. However, the TLAA hopes that the expected GDP growth of 3.7 per cent this year will help boost premium income by 9 per cent, said association president Sara Lamsam.

Based on the growth target of 9 per cent, total life-insurance premiums will reach Bt585.7 billion.

In past years, the industry enjoyed double-digit growth. Sara noted that purchasing power was an indicator of whether the industry would return to that level of growth, and the TLAA would closely monitor household debt and living costs, which can affect purchasing power. This year, premium income from first-year policies is targeted at Bt130 billion, representing growth of 9 per cent year on the year. Income from single-premium policies is targeted at Bt53 billion, representing growth of 3 per cent, and new-business premium income is projected at Bt183 billion, growth of 7 per cent. Renewal premiums are targeted at Bt402 billion, growth of 10 per cent.

The TLAA targets a persistency rate of 83 per cent.

Last year, total premium income grew by 6.7 per cent to Bt537.51 billion. Apart from the economic slowdown, several life-insurance companies also toned down promoting single-premium policies, which affected total income and the persistency rate, Sara said.

"We will re-evaluate the factors of economic slowdown and high household debt in the middle of this year as to whether they will influence life-insurance [sales] and whether this industry will have a chance to grow by double digits," he said.

The association believes that a stronger economy driven by government spending and stimulus packages will spur sales of life insurance. Moreover, amended regulations in line with the Asean Economic Community have encouraged Thai insurance firms to invest outside the country, especially in Cambodia, Laos, Myanmar and Vietnam. The next destinations for Thai life-insurance investment are Indonesia and the Philippines.

The ageing of society and the tax deductions from buying life insurance are still key factors for the long-term growth of the industry, Sara said.