10th July 2009
Consumer Spotlight
- According to a recent survey, most working adults here are hugely underinsured. Singaporeans are covered on average for only 2.8 times their average annual income instead of the suggested level of 10 to 12 times. Life insurance penetration for the mass affluent and upper mass segments is 91 and 82 percent respectively, but it is only 61 per cent in the lower mass segment.
- Affected by the global financial meltdown last year, millionaires here shrank 22 percent to 61,000 people. A lot of these individuals are in the US$1 to 5 million ranges. The millionaires have reacted to the crisis by moving more of their assets into cash and fixed-income securities, away from equities. Most prefer simpler and liquid investments.
- More people over 55 are leaving their CPF savings untouched instead of making a withdrawal on turning 55. Last year, 56 percent chose this option as they can earn higher interest by leaving their money with CPF. The poor investment climate also contributed to this trend.
- According to a survey commissioned by Council for Third Age, 74 percent the respondents expressed their wish to grow old and retire in Singapore, but only 56 percent felt that it was affordable to do so. Preference to retire overseas increases with personal income and education. Half of those aged 50 and below have started financial planning for their later years. More than half the respondents would work past the retirement age of 62.
- Most Singaporeans are getting married later or not getting married at all. The median age of men and women at first marriage is 30 and 27 respectively. The proportion of single citizens has risen across all age groups. Half of the marriages here now involve at least one non-Singaporean citizen. Non-citizens now make up a third of the population, up from one-quarter 10 years ago. Last year alone 200,000 non-residents joined the local workforce.
- Singapore consumers ranked fourth among eight countries in overall risk appetite. Most are willing to take career risks but are relatively risk-averse when it comes to their finances. They are generally unwilling to engage a professional financial planner.
- Singaporeans are the biggest online shoppers in the Asia-Pacific region. On average, each Singaporean spent US$4,018 (S$5,868) last year; surpassing those in Hong Kong, India and Japan. The most popular online buy is plane tickets. Cyberspace shopping is expected to grow further.
Just For Health
- The number of people who used Medisave to cover part of their treatment for chronic illnesses has jumped 5 times in the last 2 years. At the end of last year, there were 98,901 people under the Chronic Disease Management Program. Depression and Schizophrenia will be included later this year. Most of the patients are above 50 and nearly half have 3 or more chronic diseases. Diabetes is the leading ailment.
- Doctors at NUH are offering a new surgical technique that leaves no scar and less pain. It involves just a single incision of up to 2 cm on the patient’s navel to insert surgical instruments for treatment of gall stones, stomach tumours, inflamed appendices and hernias. It may cost more, but it appeals to the younger patients who are more self-conscious about post-operative scars. For a non-subsidised patient, it costs about 50 percent more for this new surgery technique than the traditional keyhole surgery.
- HIV is up among gays and bisexuals. The increase comes as overall figures rose 7.8 percent. There is an increasing number of gay men getting infected due to open relationships with their partners. Men have become complacent and do not use protection. Spike also seen among intravenous drug users.
Financial Matters
- The MAS poll with 19 economists showed their consensus of expecting a sharp recovery with growth hitting 4.2 percent next year, as compared to the 3.3 percent they forecasted in March. The economic bounce-back will follow a deep 6.5 percent contraction this year.
- The MAS has banned 10 financial institutions from selling structured notes for periods ranging between six months and two years after a seven-month investigation into the manner in which the structured notes were mis-sold. About 9,900 people lost most or all of their investments totalling about $520 million in Lehman Minibonds, DBS High Notes 5 and others.
- Banks and other financial institutions will tighten their internal controls. A raft of measures will be in place to protect the interest of consumers who buy investment products. These include having a cooling-off period of up to seven days and banning bank tellers from referring customers to staff selling investment products.
- Insurance broker Lockton Companies (Singapore) has launched the “After The Event Insurance”. This scheme is underwritten by First Capital Insurance; it will provide a package for those involved in lawsuits by insuring their legal and court fees if they lose their case. The premiums are a one-off payment which can range from 15 percent to 45 percent of the sum insured.
Competitors' Movement
GE
- From 1 Jul, GE will offer a new Living Organ Donor Transplant benefit in its SupremeHealth Shield plan. This enhancement allows the policyholders to obtain reimbursements of up to $50,000 for hospitalisation and surgical fees when they donate a kidney or liver to a family member – namely, a parent, sibling, child or spouse in Singapore. Premiums will increase and existing policyholders will be eligible after renewing their policies from Oct 1.
Family3
- A limited-pay whole life participating plan with options for either 10-pay or 15-pay.
- Guaranteed coupon of 2.5% of the sum insured starting from the 10th or 15th policy anniversary.
- Non-guaranteed cash bonus starts from 2nd policy year (0.8% of the sum insured, and it increases to 1.5% of the sum insured from 10th policy years onwards).
- Coupons deposited interest rate at 3% p.a.
- Smart Invest
- Regular premium Investment-Linked Plan
- 100% premium allocation to investment.
- Total investment value will be payable upon death.
- Guaranteed Rewards
- Single premium par endowment plan with annual payout from the end of accumulation period.
- Choice of 3 plans: 3 years accumulation period with payout over 17 years, 5 years accumulation period with payout over either 10 years or 15 years. Payout consists of guaranteed coupon and non-guaranteed cash bonus.
- Guaranteed survival benefit at between 6.5% and 7.5% of single premium.
Prudential
- Prulink Premier Saver Account
- Regular premium investment-linked policy with minimum premium of $250 per month.
- 15 years premium payment with direct income option whereby policyholders can withdraw monthly or yearly income stream.
- 5% bonus unit starting from 5th policy year.
TM Asia Life
- TM Nest Egg (SP- Guaranteed 3)
- 5-year non-par single premium endowment plan
- Yearly coupon of 2.5% of sum insured with no coupon deposit option
- Available for cash and SRS
- TM Peace of Mind - CancerCare
- Standalone Critical Illness Plan with term up to age 70.
- It allows 5 claims on early cancer on different organ. Benefit payable is the lower of 10% of sum insured or $30,000.
- Remaining sum insured will be payable upon major cancer.
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