Categories
Physical

Investment linked insurance and insurance savings plan

I think many people get confused over this topic so let me pen this down:

  1. Any plan with the word insurance inscribed to it like investment linked insurance or insurance savings plan means just that – it is an insurance plan, i.e. a protection plan that covers you for any untoward incidents.
  2. When you buy an insurance plan, e.g. a medic card insurance, it will cover you from the moment you purchased it
  3. It will not insure you when you are 80 years old.
  4. Put differently, if you buy insurance in 2019 and nothing happens to you in 2019, that portion of premium you paid for 2019 is lost forever (the insurance company will take this as their profit)
  5. If you have been buying insurance for 20 years and nothing happens to you in these 20 years from the moment you first purchased, then the insurance company profits from the premiums you paid.

Standalone medical card insurance vs investment linked medical insurance

  1. Standalone medical insurance means the insurance company is collecting premium for the year/month insured. Nothing more and nothing less
  2. Say for instance for now, an RM300 Room and board + RM300K annual limit for hospitalization, the insurance premium that one has to pay is as follows:
  1. A 36 years old will have to pay RM107/month vs a 66 years old who will need to pay RM493/month for the same coverage as #3 above
  2. If both made the payment for 2019 and nothing happened to them, then the insurance company will profit ALL from the premiums paid
  3. Investment linked insurance simply means that instead of RM107/month or RM493/month, one pays more so that the excess (not the full insurance premium paid) will be invested (usually back into KLCI or fixed deposit – to return about 3-5% per annum, if you are lucky. It can go negative return as well.)
  4. As you are paying through out the years, the insurance premium will be increased. This is due to cost claim ratio, inflation, medical cost etc
  5. Insurance savings plan has the same concept as above and is usually linked to a term insurance. What this means is also the same – one portion will be paid for insurance and the balance will be reinvested, and hence the name insurance savings plan
  6. For example if you pay RM100 into this plan, RM40 will be paid for insurance and RM60 will be reinvested. That RM40, since it is for insurance will be lost forever if nothing happens to you in the year the premium is paid. (in reality the amount for reinvestment will be lower after deducting agent fee etc)

Conclusion

  1. Do not buy insurance products for savings or investments – go for unit trusts, fixed deposit etc for investment
  2. Insurance, when you buy it, covers now. If you buy now, the premium you pay will not cover (it wont be sufficient to cover) when you are 30 years from now
  3. You only insure now, NOT the future
  4. What IF something bad happens to me – this is also another fallacy which we need to tackle in a separate post
Categories
Physical

Capitalism

Most of us might not consciously appreciate it, but we have been under the ideology of capitalism since World War 1. A lesser known fact was that socialism almost took over the world, as surely as the rising sun, only to collapse under its own weight at the very last minute. It is like saying today Facebook will be overtaken by Friendster. Just like back then, if you make such bold claim today, you will be ridiculed upon.

Categories
Physical

Secret of the Gods Part 3

Final Song

Strong spine. Determined by the skeletal muscles that are attached to the bones.

Categories
Physical

Secret of the Gods Part 2

Second Song

In Part 1, I revealed that the secret is energy. And that ultimately, if we do this right, we should be brimming with energy in all our 16 waking hours per day.

So what is this energy?

Categories
Physical

Secret of the Gods Part 1

“Then the LORD God formed a man…and breathed into his nostrils the breath of life, and the man became a living being.” Genesis 2:7(b)

Categories
Physical

Music can tell you about your personality

According to one research, we are exposed to music for nearly 20% of our waking lives. That’s like approximately 82K hours of music assuming you live for 70 years and sleep 8 hours per day. (70 years of life is about 600K hours of life).

Which of the following describes your taste in music?

Categories
Physical

How to correct your posture with the Alexander technique

The short history of the Alexander technique from Wiki:

“Frederick Matthias Alexander (1869-1955) was a Shakespearean orator who developed voice loss during his performances. After doctors found no physical cause, Alexander reasoned that he was doing something to himself while speaking to cause his problem. His self-observation in multiple mirrors revealed that he was contracting his whole body prior to phonation in preparation for all verbal response. He developed the hypothesis that this habitual pattern of pulling the head backwards and downwards needlessly disrupted the normal working of the total postural, breathing and vocal mechanisms.”

Categories
Physical

How to Get More Energy

Do you remember Tom Rath? We talked about him about 3 years ago. (Click here for the post). That’s right – that’s the author of Strengths Finder 2.0, a book recommended to me by my friend and a book that I have been recommending to my friends. Have you done your Strengths Finder 2.0?

He wrote another book called Eat Move Sleep. (He wrote a few other books too). I thought this book best summarizes the physical aspect of this blog I’m seeking – eat, move and sleep!

Categories
Physical

CNY Breeze and 3 Player Mahjong

In Malaysia, Chinese New Year is always preceded by fresh and pleasant breeze. We call it the new year breeze. It will come up within a month before Chinese New Year (CNY).

The most important activity during CNY is the 3 player mahjong. So today let’s review the game:

Categories
Mental Physical

Scroll of Heaven, Scroll Of Earth

From the popular anime series Naruto, episode 37 (click here for the link), the second phase of the chunin exam requires the genin* teams to obtain one earth scroll and one heaven scroll upon entering the ‘Forest of Death’. The objective is to reach the building in its centre within five days. Each of the 26 teams will be given either one scroll, making this a sudden death round. (13 teams will be eliminated).