As a country whose location is near the Equator, Singapore experiences “dry and wet days” throughout the years. Generally speaking, the dry months last from March to August. While, the wet months typically span from September to February. Its tropical climate makes the weather unpredictable.
The most convenient way to travel while it is raining is through a personal or a public car. There is no denying that hailing a cab becomes difficult when it is raining! What’s more? You may experience surge pricing when hailing a cab or booking a Grab car. Surge pricing is the adjustment of ride prices to match driver supply and rider demand. During periods of excessive demand where there are not enough drivers on the road (i.e., rainy weather), Grab increases its normal fares.
To combat this issue, insurance cooperative NTUC Income launched the product Droplet last October. Droplet is a pioneer when it comes to protecting the commuters against unpredictable surge pricing on ride-hailing platforms. Further down the road, it aims to cover other platforms aside from Grab. Just wait for their announcements by the end of the year.
HOW DOES IT WORK
Reap the benefits of Droplet by purchasing the rainsurance at least a day ahead of your rides. The premium will be no more than S$9.60 for the day. You can submit as many ride receipts for claim and receive a maximum of S$50 in a day. Commuters who buy the Droplet coverage closer to the forecast of rain are likely to pay a higher premium that those who purchase the premium cover in advance.
Image Credits: pixabay.com
To buy the insurance, you must select a date range that you would like to receive coverage. Then, you must send your claims by forwarding your E-Receipt through email (to [email protected]).
As of now, Droplet only covers rides booked on the Grab app. It will pay up to 60% of your trip fare or the cancellation fee should it be raining at the point of pickup.
THE BOTTOM-LINE
This post shall end with a statement from NTUC Income.
“Droplet is a blue-sky response to consumers’ pain point – surge pricing due to rain – when they book a ride on ride-hailing platforms. In Singapore, where an average of 167 days of rainfall can be expected a year, consumers can now meaningfully address this pain point with insurance cover by Droplet.”
It is exciting to see how insurance products sync with the modern times. Hopefully, other insurers will be as innovative as this one for the commuters to enjoy the benefits of having options.
Purchasing health insurance can be a daunting task. It may be a tricky situation if your family member has cancer. Fortunately, you can make different choices that offer the best coverage for prescription drug and medical needs.
These cautions and suggestions will help you to shop for policy for your cancer treatment:
Plan Covers Your Clinics, Hospitals, and Doctors
Evaluate your plan if it includes a cover for doctors, hospitals, and clinics. Plans may change your preferred clinics, hospitals and doctors. If your plan is not covering your clinics and doctors, you have to change this policy. Doctors or hospitals out of network may increase your expense.
Plans like australian health insurance – iSelect offer special benefits to a policyholder. You have to do your homework to find out a reliable plan. Keep it in mind that high-deductible plans need you to pay 100% of medical costs until you mollify your deductibles. Deductibles can be more than out-of-network care.
Plan Cover Costs of Prescription Drugs
Some plans are associated with co-pay that is a fixed rate for the prescription of each patient. Other insurance plans may charge one co-insurance that is ideal for the total charges of a drug. It may be expensive for a cancer patient who undergoes multiple services like radiation therapy and chemotherapy for treatment. For cancer medications, a co-pay can be a cheap option than co-insurances.
Plans often divide medications as per formulary into categories or tier. The medicines in higher tiers can be expensive for you. Cancer medications are placed in the highest tier. You may compare every formulary to see the tiers/categories of your drug.
Effects of Step Therapy
Several insurers follow “fail first” or “step therapy” rules in healthcare policies. They necessitate patients to try cheap medications before offering coverage for drugs the doctors would prescribe. If initial medicines prove useless for a patient, the treatment may progress toward expensive therapies.
Advocates of patient and physicians are concerned that this therapy can delay the access to treatments offering maximum benefits. Therefore, they consider it wrong for patients. Several states have laws that permit doctors to apply or supersede these policies. If your state doesn’t enact this law, you can talk to the insurance company to know about their policies.
Work-based Insurance Plans
Several work-based insurance plans offer open enrollment period almost once in a year. It allows you to evaluate your health plans. You can add a new member of family or change plans to avail this opportunity. You may get an option to keep similar plans without any change. If you get an option to change plans, you must carefully evaluate new prospects and their way to cover the treatment of cancer patients.
Carefully secure copies of paperwork relevant to your claims, such as FMLA (family medical leave, sick leave, receipts, bills, EOBs (explanation of benefits and necessary medical letters. Maintain your records and send reimbursement bills to your insurance provider.
Have you ever wondered how much money do we need in our silver years to be able to afford our desired lifestyles? Most adults would be relying solely on their CPF funds to finance their retirement. Asset-rich but cash poor retirees could be thinking of renting their HDB flats out to supplement their retirement funds. There are indeed several ways to build up our retirement income. However, we must be mindful of avoiding some of the dangerous assumptions when planning for our retirement.
Oversight To Account For Inflation
Inflation can have a big impact on retirees even if they have been historically low. According to Monetary Authority of Singapore, Singapore’s historical core inflation averaged an annual 1.7% since 1990. While 1.7% per annum may not appear alarming, it will compound to a staggering 66% over a span of 30 years! If you are a retiree receiving a fixed amount of stipend, the value of your money will decrease with each passing year. Hence, your retirement funds will be eroded by inflation if they are not carefully managed. Unfortunately, inflation does not stop just because you have stopped working. Therefore, it becomes important that your investment grow at rates that are at least equal or better than the rate of inflation to protect the value of your retirement funds. How do we then continue to enjoy the taste of life at our retirement years without feeling the pinch of inflation, especially when we have stopped working and receiving salaries?
Reliance on Rental Income From Property
Some adults plan to rely on rental income from investment properties to supplement their retirement funds. However, with the recent cooling measures announced in July 2018, investing in a second residential property is increasingly out of reach for most working adults.
Some retirees might be thinking of renting out the vacant rooms in their HDB flat especially as their children gradually might have left the home that they grew up in. However, this option comes with its own set of inconveniences. It could take a couple of months before a tenant can be found. There is also the administrative hassle of providing tenant’s details to HDB for record-keeping. Of course, all these pale in comparison to stories of horror tenants who damage the HDB flat or are tardy in their rental payments. In such circumstances, renting out their HDB flats may not be the best option to supplement your retirement income.
CPF LIFE Alone Might Be Insufficient
For a retiree who sets aside the maximum Enhanced Retirement Sum (S$271,500), the monthly payout from CPF LIFE is expected to be about $2,000 per month. If this amount is sufficient to pay for your daily expenses during your retirement, then this is definitely a good safety net for you to rely upon. However, it is not true that all Singaporeans and Singapore Permanent Residents can depend on their CPF funds to finance their retirement entirely. In fact, it is widely reported that almost 4 in 10 CPF Accounts do not even have enough funds to meet the Basic Retirement Sum. For the group of retirees who do not generate enough funds from their CPF LIFE payouts, it is necessary to generate extra income from alternative sources such as investments.
Future-proof Your Retirement Funds With The AIA Retirement Saver (III)
Given that young professionals lead hectic lifestyles, they may not have the time and energy to plan for their eventual retirement. Yet, planning ahead to future proof our retirement is essential and the AIA Retirement Saver (III) is one of the ways to do that. The AIA Retirement Saver (III) is a simple and hassle-free retirement solution which provides a guaranteed stream of retirement income for 15 years. Your hard-earned savings is safely secured since the capital is guaranteed; you will get back every dollar that you contributed at your desired retirement age. On top of that, you will receive potential monthly dividends which could help to cushion the impact of inflation. Premium payment duration is also flexible; single lump sum, 5 years, 10 years or simply pay till your desired retirement age – 55, 60, 65 or 70. It is easy to get started because no medical underwriting and check-up is required. In essence, the AIA Retirement Saver (III) is truly an easy and stress-free solution tailored to any individual retirement plan.
Conquer The Uncertainty & Plan For Your Desired Retirement
With the AIA Retirement Saver (III) solution, individuals can cast aside their retirement worries as their savings will be in the good hands of professionals. The AIA Retirement Saver (III) can be an additional pillar to supplement your retirement funds. As it can be tailored to maintain the purchasing power of your retirement funds, you can be assured that you will still be able to enjoy your desired lifestyle during your twilight years. Don’t leave your retirement to uncertainty. You can certainly plan for the uncertainty by taking action now.
As consumers get savvier about insurance, the Do-It-Yourself (‘DIY’) approach of “Buy Term and Invest the Difference” is gradually gaining in popularity. Briefly, it is the combination of buying a term life insurance and investing the “savings” from the lower premiums being paid. This contrasts with Investment-Linked Policy (‘ILP’) which has both life insurance and investment components. An example would be the AIA Pro Achiever which has been designed to include both insurance and investment elements in the most optimal manner. In general, ILP is preferred by consumers who want more exposure to investments than what other life insurance products may be able to provide. Therefore, it will be too foolhardy to dismiss ILP altogether. It definitely still has its merits and exists to benefit certain groups of consumers and situations.
ILP invests in a methodological and structured manner
One of the biggest merits of purchasing an ILP is to have investment professionals take over the actual investing. An example would be Mercer’s partnership with AIA to manage the investments under the AIA Pro Achiever policy. As a leading global investment consultant, Mercer possess the requisite expertise and rigor to manage and grow the investments in a methodological and structured manner.
Furthermore, the premiums collected under the AIA Pro Achiever policy will be fully earmarked for investment right from the start. Expenses for this ILP are also low since no sales charge will be levied. Bid-offer spread is also not applicable. What these imply are that every dollar contributed will have the potential to experience investment growth. Therefore, policyholders can afford more time with their loved ones with the knowledge that their investment portfolios are under the experienced hands of Mercer.
On the other hand, the DIY approach is prone to possible lapses. That is because it is not uncommon for one to juggle multiple roles (eg: the hardworking worker, the responsible parent) simultaneously today. During stressful periods, emotions could go on overdrive while investment may take a backseat instead. As a result, a case of “overwhelming emotions” or “absent-mindedness” could potentially ruin any well-planned investment strategy. However, by buying an ILP, such incidents can be avoided since the investment component has been outsourced to professionals. Regular-premium ILPs also employ a dollar-cost average approach that helps to even out market volatility. Over the long term, it allows the policyholder to fully reap the benefits of staying invested in the market.
ILP is a flexible finance instrument
ILP is a flexible finance instrument that can be catered to investors according to their risk-appetite profiles. For instance, the AIA Pro Achiever policy offers 3 types of portfolios; Adventurous, Balanced or Cautious. This provides a choice for policyholder to select a portfolio that best matches his or her expected returns/risk profile. The flexibility extends further as policyholders are able to switch or rebalance their funds from time to time at no additional fee. This is critical as risk appetites would naturally evolve when certain life milestones are reached.
In addition, AIA provides leeway for policyholders to adjust monthly premiums especially since one’s cashflow could fluctuate from time to time. For instance, during an unexpected windfall or upon receipt of annual bonuses, policyholders have the option of topping up their premiums. Likewise, when liquidity gets tight, policyholders are at liberty to take a premium holiday. Finally, there is always the option of making withdrawals when a critical need or emergency arises.
ILP also serves as a life insurance
Let’s not forget that ILP also doubles up as a life insurance which means that there is a death benefit attached to it. On this, investment-linked policyholders are typically covered up to the policy value or to the amount that they have invested. This offers an extra peace of mind as immediate family members would be able to receive the sum assured in the event of an untimely passing. A noteworthy feature of the AIA Pro Achiever is the additional death benefit payout of 100% total regular premium paid in the event of accidental death during the first 2 policy years.
AIA also recognises that with increased life expectancies, policyholders may prefer to stay invested longer. Therefore, AIA Pro Achiever allows policyholders to stay invested till age 100 (also the policy maturity)! Furthermore, AIA Pro Achiever actively rewards policyholder that stays invested for the long term. Firstly, charges for premium holidays, partial withdrawals etc are waived after the 13th year of paying premiums. Upon reaching this milestone, policyholders are also awarded an extra 5% allocation on their premiums annually. Such loyalty features suggest that the AIA Pro Achiever provides even more value for money for policyholders that stay invested longer.
Get in touch with an AIA appointed representative to find out more about the AIA Pro Achiever today!
Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Money Digest to buy or subscribe for any securities and/or investment products. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any company or investment. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.
I believe it is safe to say that “Insurance” is an unfamiliar territory for most Singaporeans. For young adults who recently joined the workforce, it is a necessity that comes with the new responsibilities of adulthood. Weighing your insurance options is just the start!
You may have encountered policy terms such as premiums and deductibles. However, do you know what each term means? I shall focus on the former.
DEFINING INSURANCE PREMIUM
In its simplest form, an insurance premium is the amount that an individual or an institution must for upon signing on a policy. It represents a bind that the insurer must provide coverage for the claims made against the policy. More so, it is the income earned by the insurance company.
HOW INSURANCE PREMIUM IS CALCULATED
There are many interacting factors that affect the prices of the insurance premium. For starters, the price heavily depends on the type of insurance (e.g., Critical Illness policy or Car Insurance policy). Other factors include the area where the policyholder lives, the likelihood of claims being made, the behavior of the policyholder, and the amount of premium offered by the competition.
Let us take the Life Insurance policy as an example. Various factors affecting your specific premium include the:
a. policyholder’s age at present time,
b. scope of coverage that the policyholder buys,
c. length of the policy,
d. and the policyholder’s life and health expectancy.
WAYS TO ACCOMPLISH PAYMENT
Singaporeans were blessed with a number of options when it comes to paying for the insurance premiums. Some insurers require the policyholder to pay for the total amount before the coverage starts. While, others offer installments (e.g, semi-annual payments).
It is vital to highlight that you may encounter situations that entail the increase of insurance premium. Firstly, it may increase after the policy period ends. Secondly, it may increase if you made claims during the previous period. Lastly, it may increase if the risk associated to the type of insurance gets more pervasive.
Image Credits: pixabay.com
THE BOTTOM-LINE
In summary, the insurance premium is the amount of money charged by the insurer for an active coverage. The total amount depends on multiple factors including age and address. Individuals may pay premiums annually or in smaller amounts over a year. Also, this amount changes over time. The policy is usually voided when the insurance premiums are not paid.
