Most people will assume that their hospitalization expenses are taken care of after signing the dots on their proposal form. Policy documents are put away without first reading the terms and conditions in it. When comes the time to make claim, some are disappointed, leading to finger pointing at insurance agents......
The following reminder is an extract from www.insuranceinfo.com.my which I find important for consumers shopping for a medical hospitalization insurance policy.
1)Buy according to needs and budget
Lower premiums will have lower claim limits, and the amount covered is commensurate with the premiums you pay. Understand what your needs are and how much you can afford to put aside regularly. It also pays to shop around and look at policies from various companies, as these will differ in coverage, benefits and costs.
2)Full disclosure of information
Do not hide anything about your medical history. Some will even ask about immediate family members,. You should never lie, as it can and will result iin claims not being paid.
3)Fully understand your policy
Ask your agent for more information about the policy you want to buy, and do not be shy about it. Understand what the terms and conditions are, as well as the scope of cover provided. You should at least be aware:
i.What is covered (limits of benefits provided)
ii.What is not covered (for example: investigative admission, prosthetic limbs)
iii.Period of cover (if policy renewal is guaranteed after a claim)
iv.Waiting period (the amount of time before you can make the first claim)
v.Annual and lifetime limits
vi.Co-insurance (cost-sharing between insured and insurer)
vii.The amount of premiums to pay (static or increases with age)
4)Be aware of exclusions
There will be a list of conditions and illnesses where claims cannot be made.
5)15 days free-look period
Once you receive the policy documentation, read through it thoroughly and see if you are agreeable to it. If you are not, you can return the policy within 15 days and receive a full refund of premiums (certain costs may be deducted)
6)Claims procedure
Always check with the insurance agent or company before undergoing treatment. They can advise which are their panel clinics, and what you are entitled to. In the case of emergencies nd treatment is sought at a non-panel facility, the insured usually has to pay for it firs, and will be re-imbursed later.
7)Buy additional riders
If required, you can buy extra coverage on your policy (for example, overseas treatment of waiver of the annual limit).
8)Review policy annually
The cost of medical care increases every year. It is prudent to regularly check if the existing coverage meets current costs.
Tuesday, November 2, 2010
Wednesday, September 1, 2010
Finding out your spending habit
When ask the percentage of income an individual spend on food, transportation, house, children, etc., most will show a blind face.
It is always good to start off our financial planning by finding out where we spend our money. Do consider using a spreadsheet.
On the first left column, list down the category. My broad categories are Food, Transportation, Children, Books, Clothing, Utilities, Insurance, Entertainment and Donation+Offering.
You can further break down the broad category into smaller categories such as food at home and eating out.
As for the first row, put date. The last column would be total. From here you get to work out the total amount you spend on each category. After 2 to 3 months, you will be able to find out your spending pattern.
Tuesday, August 31, 2010
Financial Planning Concept
I learned my first planning lesson in Form 3 of home science classes. Mrs.Karim was our cookery class teacher while Mrs.Kok taught us sewing. I picked up valuable ideas and skills from them. In the home science exam, we were supposed to cook for a meal.
The meal consisted of 3 dishes and a soup for a meal. Below were the things we needed to write down.
1. Decide what to cook and which to cook first(set the goal and set priority),
2. Write down recipes and check if you have the ingredients (gather relevant data and information),
3. work out a time schedule for each step to follow. Estimate time taken for each step. (Analyze info and develop the process for implementation.)
4. Cook according to what were written down. (execute the plan)
5. Constantly check to ensure stewed meat does not dry up, etc., until completion. (Monitor and review)
In upper form, in order to carry out any experiment, the same procedure will follow. Similarly, in financial planning, the logical way to follow is
1. Determine what i want to achieve financially and prioritize them
2. Arrange, file up, and put on paper what are the resources and liabilities i have, e.g. how much money i have in the bank, invested in shares or unit trust, loans etc.
3. Analyze the assets and liabilities and the income sources
4. Detail and write down the financial problems I have and the solutions that I can have
5. Implement steps to solve my problems and to achieve my financial goals
6. Check and adjust the implementation to ensure problems are solved and goals can be achieve.
It is easy to say than to implement. Get a financial planner to advise you.
The meal consisted of 3 dishes and a soup for a meal. Below were the things we needed to write down.
1. Decide what to cook and which to cook first(set the goal and set priority),
2. Write down recipes and check if you have the ingredients (gather relevant data and information),
3. work out a time schedule for each step to follow. Estimate time taken for each step. (Analyze info and develop the process for implementation.)
4. Cook according to what were written down. (execute the plan)
5. Constantly check to ensure stewed meat does not dry up, etc., until completion. (Monitor and review)
In upper form, in order to carry out any experiment, the same procedure will follow. Similarly, in financial planning, the logical way to follow is
1. Determine what i want to achieve financially and prioritize them
2. Arrange, file up, and put on paper what are the resources and liabilities i have, e.g. how much money i have in the bank, invested in shares or unit trust, loans etc.
3. Analyze the assets and liabilities and the income sources
4. Detail and write down the financial problems I have and the solutions that I can have
5. Implement steps to solve my problems and to achieve my financial goals
6. Check and adjust the implementation to ensure problems are solved and goals can be achieve.
It is easy to say than to implement. Get a financial planner to advise you.
Monday, August 30, 2010
Rules to follow in family financial Planning
Budget:
Have a budget. Plan your budget with care and make sure you adhere to your financial goals.
Savings:
Pay yourself first! Every month, set aside at least 10% of your income as savings. Place these savings in a separate bank account and choose not to have the ATM card facility.
Make savings a way of life: Begin saving TODAY. Know the concept of compound interest.
Make savings a way of life: Provide an emergency fund, ideally at 6 times of monthly expenses.
Make savings a way of life: Allocate your savings for retirement fund, but most importantly - Live Within Your Means.
Loans & Credits:
Loans & Credits: Know the purpose of your loan and repayment capabilities; and, be aware of the terms and conditions of the loans.
Loans & Credits: Know the effective interest rate on your loans; and, keep payments within 40% of gross monthly salary.
Loans & Credits: Always be a good paymaster so you have a positive credit report; and, NEVER borrow from unlicensed money lenders.
Signs that you need financial advice:
You only pay the minimum amount every month for your credit card.
You take frequent cash advances.
You have little or no savings.
You depend on overtime or bonuses to pay your living expenses.
You consistently pay your bills late.
You borrow money from family or friends to pay your debts.
Financial Basics:
Make and stick to a budget.
Save at least 10% of your monthly salary.
Track your expenses and cash flow.
Live within your means.
Spend wisely, learn to differentiate between needs and wants.
Delay gratification.
Have an emergency buffer fund of 6 months of your total expenses.
Managing debt better:
Borrow or take loans only for productive purposes.
Ensure that you can pay the installments comfortably.
As a guide, your monthly loan repayments should not exceed 40% of your gross monthly income.
Adhere to the repayment schedule to avoid unnecessary charges.
Use surplus fund or extra income to reduce your total debts.
Building Wealth:
In order to build wealth, start saving early.
You need to ensure you have a positive net worth (asset - liabilities).
Diversify your investments in order to spread your risks.
The higher the return you get from an, investment, the greater the risk.
Be wary of get-rich-quick schemes.
Tips on using credit cards:
Limit the number of credit cards you have to just two.
Do not use a credit card if you cannot make the monthly payments.
Avoid using credit card to get cash advances.
Always check your credit card monthly statement to ensure there are no irregularities.
Have a budget. Plan your budget with care and make sure you adhere to your financial goals.
Savings:
Pay yourself first! Every month, set aside at least 10% of your income as savings. Place these savings in a separate bank account and choose not to have the ATM card facility.
Make savings a way of life: Begin saving TODAY. Know the concept of compound interest.
Make savings a way of life: Provide an emergency fund, ideally at 6 times of monthly expenses.
Make savings a way of life: Allocate your savings for retirement fund, but most importantly - Live Within Your Means.
Loans & Credits:
Loans & Credits: Know the purpose of your loan and repayment capabilities; and, be aware of the terms and conditions of the loans.
Loans & Credits: Know the effective interest rate on your loans; and, keep payments within 40% of gross monthly salary.
Loans & Credits: Always be a good paymaster so you have a positive credit report; and, NEVER borrow from unlicensed money lenders.
Signs that you need financial advice:
You only pay the minimum amount every month for your credit card.
You take frequent cash advances.
You have little or no savings.
You depend on overtime or bonuses to pay your living expenses.
You consistently pay your bills late.
You borrow money from family or friends to pay your debts.
Financial Basics:
Make and stick to a budget.
Save at least 10% of your monthly salary.
Track your expenses and cash flow.
Live within your means.
Spend wisely, learn to differentiate between needs and wants.
Delay gratification.
Have an emergency buffer fund of 6 months of your total expenses.
Managing debt better:
Borrow or take loans only for productive purposes.
Ensure that you can pay the installments comfortably.
As a guide, your monthly loan repayments should not exceed 40% of your gross monthly income.
Adhere to the repayment schedule to avoid unnecessary charges.
Use surplus fund or extra income to reduce your total debts.
Building Wealth:
In order to build wealth, start saving early.
You need to ensure you have a positive net worth (asset - liabilities).
Diversify your investments in order to spread your risks.
The higher the return you get from an, investment, the greater the risk.
Be wary of get-rich-quick schemes.
Tips on using credit cards:
Limit the number of credit cards you have to just two.
Do not use a credit card if you cannot make the monthly payments.
Avoid using credit card to get cash advances.
Always check your credit card monthly statement to ensure there are no irregularities.
Thursday, August 26, 2010
Housing Loan
When we got married in 1990, my husband and I pooled our income together to buy a house. It is a corner, double storey terrace house. At that time the house was RM150K. 20 years later, which is now, we were told the house can fetch RM500k because of its locality.
Half a million as compared to RM150K seems to be a good price. However, punching number in my financial calculator, the annual growth was 6.2%. If I factor in the interest which we paid to the bank, the annual growth is merely around 3%, not very impressive as compared to fixed D!
20 years ago, the loan interest was calculated using a formula BLR + ? %. The BLR kept increasing until our housing loan interest became double figure! That means the monthly prepayment was not even sufficient to cover the interest! It was some kind of Ah Long dilemma. We were somehow sort of lucky during that period because my company introduced housing loan subsidy. The interest was brought down to flat rate of 4%, and we managed to settle the payment in year 2000.
Checking with the PBB and BSN today, the housing loan interest is calculated based on BLR-2.2% for the duration of the tenure. BSN will pay for the legal fee, transfer fee etc which they call 0% moving fee, but if you decide to settle in full before the tenure term ends, penalty is 3% of the loan amount. Whereas PBB only implement 3 year lock-in period but you have to be responsible for the moving fee yourself.
Nevertheless, I should think that it is quite a good time to take up a housing loan now as compared to 20 years ago.
Year BLR Remarks
2009 6.50 5.95 (February)
5.55 (March)
2008 6.75
2007 6.75
2006 6.00
2005 6.00
2004 6.00
2003 6.50
2002 6.50
2001 6.75
2000 6.75
1999 8.00
1998 10.50 12.27%
1997 9.25
1996 8.50
1995 6.60
1994 8.25
1993 9.50
1992 9.00
1991 7.50
1990 7.00
Half a million as compared to RM150K seems to be a good price. However, punching number in my financial calculator, the annual growth was 6.2%. If I factor in the interest which we paid to the bank, the annual growth is merely around 3%, not very impressive as compared to fixed D!
20 years ago, the loan interest was calculated using a formula BLR + ? %. The BLR kept increasing until our housing loan interest became double figure! That means the monthly prepayment was not even sufficient to cover the interest! It was some kind of Ah Long dilemma. We were somehow sort of lucky during that period because my company introduced housing loan subsidy. The interest was brought down to flat rate of 4%, and we managed to settle the payment in year 2000.
Checking with the PBB and BSN today, the housing loan interest is calculated based on BLR-2.2% for the duration of the tenure. BSN will pay for the legal fee, transfer fee etc which they call 0% moving fee, but if you decide to settle in full before the tenure term ends, penalty is 3% of the loan amount. Whereas PBB only implement 3 year lock-in period but you have to be responsible for the moving fee yourself.
Nevertheless, I should think that it is quite a good time to take up a housing loan now as compared to 20 years ago.
Year BLR Remarks
2009 6.50 5.95 (February)
5.55 (March)
2008 6.75
2007 6.75
2006 6.00
2005 6.00
2004 6.00
2003 6.50
2002 6.50
2001 6.75
2000 6.75
1999 8.00
1998 10.50 12.27%
1997 9.25
1996 8.50
1995 6.60
1994 8.25
1993 9.50
1992 9.00
1991 7.50
1990 7.00
Wednesday, August 25, 2010
What is life insurance all about
Once I read a story which explained very well of how insurance works.
Long ago, there was a village with 100 households. They were all padi farmers. Not far from the village lived a gang of robbers that came down from the mountain on the last day of each year. The robbers would target at the village and shot an arrow. Whichever house nearest to the fallen arrow would be required to give the robbers 100 sacks of rice. 100 sacks was in fact all the padi harvested in a year, living the family nothing to live by for the following year!
One day, a wise man from the nearby village heard about the ill-fated village and decided to pay the village a visit. He shared with them an idea of how every one can help each other to reduce the loss to the minimal. The brilliant idea was for each household to contribute a sack of rice at the end of the year. 100 household would mean 100 sacks of rice. At year end, no one should be in fear anymore of losing his fortune for a year!
This concept is similar to life insurance. Every policyholder does contribution from his premium to form an insurance pool. Should any of the policyholder pass on, the money from the pool is used for compensation.
Technical definition would be:
Insurance provides financial protection against a loss arising out of happening of an uncertain event. A person can avail this protection by paying premium to an insurance company.
A pool is created through contributions made by persons seeking to protect themselves from common risk. Premium is collected by insurance companies which also act as trustee to the pool. Any loss to the insured in case of happening of an uncertain event is paid out of this pool.
Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that it spreads the risk of a few people over a large group of people exposed to risk of similar type.
Long ago, there was a village with 100 households. They were all padi farmers. Not far from the village lived a gang of robbers that came down from the mountain on the last day of each year. The robbers would target at the village and shot an arrow. Whichever house nearest to the fallen arrow would be required to give the robbers 100 sacks of rice. 100 sacks was in fact all the padi harvested in a year, living the family nothing to live by for the following year!
One day, a wise man from the nearby village heard about the ill-fated village and decided to pay the village a visit. He shared with them an idea of how every one can help each other to reduce the loss to the minimal. The brilliant idea was for each household to contribute a sack of rice at the end of the year. 100 household would mean 100 sacks of rice. At year end, no one should be in fear anymore of losing his fortune for a year!
This concept is similar to life insurance. Every policyholder does contribution from his premium to form an insurance pool. Should any of the policyholder pass on, the money from the pool is used for compensation.
Technical definition would be:
Insurance provides financial protection against a loss arising out of happening of an uncertain event. A person can avail this protection by paying premium to an insurance company.
A pool is created through contributions made by persons seeking to protect themselves from common risk. Premium is collected by insurance companies which also act as trustee to the pool. Any loss to the insured in case of happening of an uncertain event is paid out of this pool.
Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that it spreads the risk of a few people over a large group of people exposed to risk of similar type.
Monday, August 23, 2010
Medical Card - To upgrade or not to upgrade?
My husband bought a medical card from a renowned insurance company 7 years ago. The cover was RM100 for Daily Room And Board, RM50K for annual hospitalization and surgical procedure, RM150K lifetime limit, expired at age 70. No claim has been made so far.
Now that he is 7 years older, at the age of 50, we feel that 70 years old is not very far away. Reviewing the medical policy, we ask ourselves whether it is necessary and worthwhile to upgrade the medical card to a higher plan, or buy a second medical card to maintain the terms and conditions in the first medical card. The T&C was better and insurance charges was cheaper.
On inquiry, upgrading to age 80 will cost an additional monthly premium of RM191.30. To purchase a second medical card will cost another monthly premium of RM250 on top of what he is already paying RM150p.m.
After evaluation of the objective of upgrading, which is to ensure some kind of hospitalisation protection after age 70 to 80, we decide to invest RM250 monthly in an investment tool that can give us an average return of 8% per annum. This will give us an estimated dedicated hospitalization fund of RM137K at age 70.
Now that he is 7 years older, at the age of 50, we feel that 70 years old is not very far away. Reviewing the medical policy, we ask ourselves whether it is necessary and worthwhile to upgrade the medical card to a higher plan, or buy a second medical card to maintain the terms and conditions in the first medical card. The T&C was better and insurance charges was cheaper.
On inquiry, upgrading to age 80 will cost an additional monthly premium of RM191.30. To purchase a second medical card will cost another monthly premium of RM250 on top of what he is already paying RM150p.m.
After evaluation of the objective of upgrading, which is to ensure some kind of hospitalisation protection after age 70 to 80, we decide to invest RM250 monthly in an investment tool that can give us an average return of 8% per annum. This will give us an estimated dedicated hospitalization fund of RM137K at age 70.
Sunday, June 20, 2010
Living in Kota Kinabalu
It is a blessing to live in Kota Kinabalu. My life is casual and relaxing.
My house is located at a convenient spot. I can buy groceries and daily needs just about any direction near my house. My office is 10 min within walking distance. My children's school is 6km away from my house, and most of the time I can avoid traffic jam at different hours using different routes. I love jogging at Taman Tun Fuad Stephen early in the morning especially after rainy nights. The fresh air and the sound of stream flowing down from the slope is simply refreshing. Sometimes I choose to jog round the man-made lake at Likas Sport Complex. When time is a bit rush, I jog at Taman Tropicana.
My house is located at a convenient spot. I can buy groceries and daily needs just about any direction near my house. My office is 10 min within walking distance. My children's school is 6km away from my house, and most of the time I can avoid traffic jam at different hours using different routes. I love jogging at Taman Tun Fuad Stephen early in the morning especially after rainy nights. The fresh air and the sound of stream flowing down from the slope is simply refreshing. Sometimes I choose to jog round the man-made lake at Likas Sport Complex. When time is a bit rush, I jog at Taman Tropicana.
Friday, June 18, 2010
A cup of hot chocolate
I read this in a Chinese magazine, which speaks to me what is really important in life. How we now live, is really the choice made by us.
A group of graduates, well established in their careers, were talking at a reunion and decided to go visit their old university professor, now retired. During their visit, the conversation turned to complaints about stress in their work and lives. Offering his guests hot chocolate, the professor went into the kitchen and returned with a large pot of hot chocolate and an assortment of cups – porcelain, glass, crystal, some plain looking, some expensive, some exquisite – telling them to help themselves to the hot chocolate.
When they all had a cup of hot chocolate in hand, the professor said: “Notice that all the nice looking, expensive cups were taken, leaving behind the plain and cheap ones. While it is normal for you to want only the best for yourselves, that is the source of your problems and stress. The cup that you’re drinking from adds nothing to the quality of the hot chocolate. In most cases it is just more expensive and in some cases even hides what we drink. What all of you really wanted was hot chocolate, not the cup; but you consciously went for the best cups… And then you began eyeing each other’s cups.
Friday, June 4, 2010
Protecting my mangoes
In the previous mango season last year, bats came to enjoy my ripe mangoes at night leaving behind the mango skin with the flesh gone. This year I wrap the fruits about to ripe with plastic bags. This way keep the mangoes away from the bats. The birds like to poke on the fruits as well. I just couldn't wrap every fruit so let the birds enjoy the fruits together with me.
Mango Tree
It is now mango season. I have an apple mango tree just in front of my house. The flesh is smooth and sweet and juicy. Yummy! I eat at least 2 to 3 fruits everyday. This is also the season I find myself a few kilos heavier.
Mangoes are usually given to my family members and guests. Everyone loves my mangoes.......
Thursday, April 29, 2010
昙花一现A flash in the night-Epiphyllum
My memory of Epiphyllum was very long ago. It belongs to cactus species. It only blooms at night, and for one night only. We stayed until midnight just to see it fully bloomed. The next morning, it withered and fell.
A church lady passed away at the age of around 57 two nights ago, sudden death. I believe no one knew what happened exactly. She was a lone ranger, and not the sociable type, though not unfriendly. She stayed alone with her pet dog. Seeing that she usually sat on the bench alone after Sunday service, i sometimes talked to her but just social chat.
It is a strange feeling that some one sitting next to you in the church on Sunday could be cremated and became non-existence in the world a few days later. What if the person is some one dear to you in your life? Life, can somehow be expected to end this way which occur unexpectedly.
We can't prepare others for our death, but at least we can decide how we want to live our lifes。
A church lady passed away at the age of around 57 two nights ago, sudden death. I believe no one knew what happened exactly. She was a lone ranger, and not the sociable type, though not unfriendly. She stayed alone with her pet dog. Seeing that she usually sat on the bench alone after Sunday service, i sometimes talked to her but just social chat.
It is a strange feeling that some one sitting next to you in the church on Sunday could be cremated and became non-existence in the world a few days later. What if the person is some one dear to you in your life? Life, can somehow be expected to end this way which occur unexpectedly.
We can't prepare others for our death, but at least we can decide how we want to live our lifes。
Saturday, April 17, 2010
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