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8 comments
1) I refer to yr comment on “guarantee”. How fool-proof is a guarantee, if the said insurer goes bust with the maturity time ? If it happens, what will then happen to one’s fund ?
2) Also, any difference between a guaranteed capital fund investment and a protected capital fund investment ?
Your comment is appreciated. Tks.
ReplyHi Stephen,
the guaranteed component of course depends on the insure not going bust. If they do, the Insurance Act provides for the setting up of a Policy Owner’s Protection Fund (”PPF”) to compensate policy owners. Under the current provisions, the PPF will cover up to 90% of an insurer’s liability on any life policy.
Rather than relying on the terms capital guaranteed or capital protection (which really is a misnomer), it is best to understand the product thoroughly and know what is the best case and worst case scenario.
ReplyHi Martin,
Tks. Is the PPF also applicable to an investment company, the issuer, , going bust, like Lehman Brothers, if the product is a guaranteed/protected capital investment fund/structured product , whose underlying instruments are reliable ?
ReplyHi Stephen,
It only applies for life policies.
No specific answer to your 2nd question. Really have to look at it on a case-by-case basis.
ReplyHi Lioninvestor,
Appreciate if you could answer the following questions:
Is it worth taking more than one life insurance?
I understand that insurance companies does not allow policy holders to choose nominees so how does this work in the event the policy holder dies?
Thanks.
ReplyHi Lana,
It really depends on how much coverage you need. Also, do not forget there are various kinds of insurance covering different aspects:
1) Hospitalisation and surgery
2) Death
3) Critical illness
4) Disability income
5) Personal accident
6) Total and permanent disability
There were some issues with nomination:
http://www.lia.org.sg/ftpsite/others/S73_FAQ_7Dec05.pdf
Nomination is still possible with NTUC plans.
When there is no nomination, the insurer will pay the policy proceeds of up to $150,000 to a proper claimant without the grant of probate or letters of administration. The balance of the policy proceeds above $150,000 will be paid upon production of the grant of probate or letters of administration.
The law will be amended to allow for nomination:
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