Easier claims with Sompo Insurance

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How a S$3,000 bill became S$30,000

Read the full article from CNA here –How a S$3,000 bill became S$30,000?

One of the challenges in advising a client is managing the cash flow. The big purchases such as a holiday can be controlled but it is difficult to manage fixed expenses such as these tiny little installments that add up to an amount that ends up more than the income.

Personally I don’t mind installment free payment via credit cards but those in-house credit facilities is a No-No! My advice to my clients is if there is no ready cash, go for a lower priced item and save up to buy the ideal model. For e.g. if a TV cost $1,200, a 12-month installment will works out to around $125/mth. Try to save that amount for a year instead of committing to the loan. 2 possible scenarios-

1) You saved for 6 months and find that it’s not possible cos you over-budgeted. You are still richer by $750.

2) You managed to save $125 for 12 months. That’s $1500! You can buy a better or newer model 🙂

If we had just jump into the credit facilities, we are stuck with just bad debts and a depreciating equipment.

Does a smaller loan on your property makes sense?

The outlook for mortgage rates is that the rates are expected to go up. It is a known fact the mortgage rates have a significant impact on the cost of buying a home. When the rates increase, your monthly payments go up. A 5 basis point change in the rates can be significant in the long run especially the loan size is huge.  Assuming a loan of $1,000,000 at 1.60% increased to 1.65% will see an installment repayment from $3,499 to $3,524 over 30 years. Thus, consumers are always concern about the rates. While mortgage rates is beyond our control, we can decide on another major factor that affects the repayment installment i.e. the amount of loan to commit. A common decision to be made by property buyers is should they pay more upfront and take a smaller loan or should they pay less upfront and hold more cash for liquidity. But there is no right or wrong answers to that decision. On top of the investment opportunity to generate a better returns than the mortgage rates, it also depends on a person’s mindset to be debt free.

Let me share one of my client’s situation and you decide what you will do. We shall call him Mr. Million.

Mr. Million had purchased a property and took a 30 years mortgage loan of $1,000,000 at 1.6% p.a. The monthly repayment as well as the total repayment amount is as follow.

1 mil 30 yrs

The monthly installment is $3,499. The total interest paid will be $259,781.

Mr. Million have a spare cash of $150,000 and he was unable to decide to reduce the loan to $850,000 or just hold that cash and re-invest it.

Option 1: If he choose to reduce it by $150,000.



  1. He reduces the monthly installment to $2,995
  2. The total repayment is reduce to $228,233


  1. He lose the liquidity of $150,000 for liquidity
  2. The $150,000 can serve as a backup fund for his monthly installment of $3,499 if needed.


Option 2: If he choose to take a $1,000,000 loan and set aside the $150,000 with (i) guaranteed 1.7% p.a. over 3 years or (ii) a guaranteed 2.08% p.a. over 5 years.

1 mil 3 yrs

(i) After repaying $3,499 monthly for 3 years, the remaining loan amount will be $920,175.

The $150,000 would have grown to $157, 875 after 3 years. He can do a capital reduction or re-financing when the lock-in period cease. With that, the new loan amount will be $762,300.


This will reduce the monthly installment to $2,899 and a total repayment interest of $176,976.

(ii) Alternatively, he can hold this $150,000 over 5 years at a rate of 2.08% p.a.


After repaying $3,499 monthly for 5 years, the remaining loan amount will be $864,790.

The $150,000 would have grown to $162,900 after 5 years. He can do a capital reduction or re-financing when the lock-in period cease. With that, the new loan amount will be $701,890.


This will reduce the monthly installment to $2,840 and a total repayment interest of $150,173.

So, what does all these means? Below is a summary:


In conclusion, while we were taught to  take up a lowest possible loan to reduce our liabilities, it is always good to look at the opportunity cost. There is no best option. It depends on a person’s preference to have the lowest liability, pay the least interest or pay the least cash outlay.

Do note the above scenario is assuming the interest rate remains at 1.6% through out the repayment period. The results may change accordingly to the various factors and you might want to do a proper assessment first before deciding the best course of action.




Mental Capacity Act

Imagine this – You have a sum of money in a bank but the bank refuse to let you withdraw it because the staff felt you do not have the mental capacity to manage it. If you think this sounds ridiculous, you many want to know this is a real case which happen a decade ago.


(The link to the full story had broken but you can read the full legal suit between Mdm. Hwang vs OCBC via here. )

While most of us do not have that $8.8 million in banks now, we can neither assume we will not have it in future nor we will not suffer from dementia.  With more and more elderly in Singapore and such incidents will become more common, the Mental Capacity Act was enacted in 2008.  This Act allows a person to appoint someone to act on his behalf when he does not have the capacity to make a decision for himself due to mental incapacity. The Parliament amended the Mental Capacity Act in 2016 to allow paid professionals to make key decisions for those who can no longer decide for themselves as there are more elderly without any family members or there may not be any suitable family member who are suitable to handle the elderly’s affairs.

The common concerns when I shared with people on the Mental Capacity Act or more commonly known as Lasting Power Attorney is they are worried the appointed person abuse his authority or takes over his assets etc.  If you wish to know more about the topic of safeguarding your assets and distributing it to the right people in the right way, you may want to attend this session organised by my company.

Here’s a little video on dementia  but Mental Capacity Act is not just about dementia.

If you are interested, just submit the form below and I will help you to register for the session.

WhatsApp Image 2018-04-19 at 17.48.46


Personal Accident Plans

I did a search on e-scooter accidents and it shows there are at least 4 such accidents in April alone.

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May you be a e-scooter rider or a pedestrian, both will suffer physical and financial pain should an accident happened. The pedestrian obviously will be injured with bruised or cuts. If the injuries are serious, he may be hospitalised. The injuries may also not be severe enough to be hospitalised and a dressing or casting may be able to treat the patient. In such case, it will be a financial pain on top of the physical pain he is already suffering. Most people will demand compensation from the e-scooter rider but we have seen that it can take sometime to identify the rider i.e. if we ever did. We also cannot assume the rider can afford to pay as the riders are just students or teenagers in some of the cases. The real challenge is the ability and the willingness to pay. What if the rider is an irresponsible person who just refuse to pay a cent?
accidentFrom the point of rider, you can get injured as well. On top of that, the casualty can go after your for the medical bills and other damages. Do you have that ability to handle such a situation of issuing a “blank cheque”?

If some of these thoughts ever go thru’ your mind either as a pedestrian, an e scooter rider or even a cyclist, what have you done to have a peace of mind?


If you have not do anything excepting thinking and worrying, here is a little solution. You may want to look into a personal accident plan that covers mainly two things.

1) Medical expenses
2) Public Liability

Medical expenses will take care of the medical bills incurred from an accident. It usually covers Traditional Chinese Medicine, Chiropractor fee and Physiotherapy.

If you are a rider or cyclist, Public Liability will come in useful if the casualty wants you to compensate the damages.

Appreciation Lunch

Appreciation Lunch with fellow members from CFP Examination Board. Missing the boy in the cup 🙂

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Autism Awareness Day


As explained by Autism Resource Centre (Singapore), Autism is a lifelong developmental disability that affects a person’s ability to make sense of the world and relate with others. Thus they are often misunderstood by many from their behaviors and some may choose to avoid interaction with them.

Some good news – Autism is is not a disease and it cannot be ‘caught’ or ‘cured’. Many with autism become successful members of society with early intervention and education.

2nd of April is Autism awareness day, please share the right information regarding autism to people that you know.


Severe self-injury is a behavior that occurs in a some of children and adults with autism spectrum disorder (ASD). For that reason, many insurers rejects application of a person with autism. In additional to creating awareness for autism, there is a need to create an awareness of this plan that is created specially for children with autism. It covers both the parents and the child for different benefits.

The table of coverage is as below.


Disclaimer: The information in this website and the links provided are for general information only and should not be taken as constituting professional advice from the website owner.

For advice, please send your queries to kimheng@avallis.com.

HFMD peaks in Singapore


The above article was published in “the Asianparent“.

Parents can minimize the risk of the child infected with HFMD by not bringing them to areas like playground or shopping malls but some places, such as schools, cannot be avoided.

In most cases of HFMD, the treatment is similar to the child having a fever. But in more severe cases, the child needs to be hospitalised for dehydration because the child is in so much pain due to the ulcers in the mouth and cannot eat or drink. It is common for the parents to take childcare or annual leave to look after the child if he is infected with HFMD and the parents may have to take a no-pay leave if they had used up their entitled leaves. The medical fees for the HFMD is not much different from the usual consultation with the GP unless it leads to an hospitalisation. Even with that situation, it will be covered if your child has a hospitalisation medical insurance such as the integrated shield plans.

There are also instances where the child is not infected but the childcare centers are to be close for disinfection due to HFMD. In such cases, none of your medical insurance may be claimable.  If you are concern about such incidents, you can look at very affordable insurance plan that may cost less than $1 a day.

A brief summary of different plans in the market that can cover you for the medical bills incurred for HFMD as well as the closure of your childcare center due to HFMD can be seen here.


This plan covers mainly on HFMD


There are plans for parents who wants a more comprehensive of illness to be covered.


A wider area of coverage for childcare or school fee subsidy.


In addition to HFMD, these plans also cover the injuries that a child sustained from accidents e.g. run and fall in school or home.

If you need more information on these plans, please drop me an email.

Investment Seminar

We had our first seminar in 2018 on the 20th March 2018. The investment seminar started with Mr. Robert Rountree who is the Global strategist from Eastspring Investment sharing his insights and 2018 outlook on the financial market. It was followed by Mr. Isaac Low, Principal Partner and Head of Investment Advisory of Avallis Financial, sharing how our approach to investing can add value to our client’s portfolio while maintaining controlled risk exposure.

Thanks to Eastspring Investment, Avallis Financial and the many who had worked behind the scene to make this investment seminar a success.

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The next seminar will be on Estate Planning and should be in May 2018. Let me know if you are interested so we can keep you update on the seminar.

Changes to Integrated Shield Plans(ISPs)

It is likely that you are reading this because you are concern or confused with the changes to the private integrated shield plans today(07/03/2018). In case you are here by accident and still unaware of the changes, you can read the  following for more information.

5% co-payment for new Integrated Shield Plan riders to help address over-consumption of medical services

Before discussing about the changes, let us first understand the need for it.

The following is a premium table for insured age 1 to 75 of an ISPs from one of the service providers in 2008 and in 2018. These premiums can be partially paid from the CPF Medisave Account up to the withdrawal limit base on the insured’s age.


In order to cover both the deductible and co-insurance, the insured need to purchase the rider as below. It also shows the increase from 2008 to 2018.


The premiums for the main plan had increased 20 to 30% and the riders increased almost 200% to 300%. While different insurers may had adjusted their rates differently, the fact is all had sky rocketed over the last few years. Thus a change is needed and the question is  “what” and “when” .

Before going to the details, let’s see if you are affected. The application date of your policy determines the impact of the new changes to your private integrated shield plans. The chart below shows the impact of the application dates on your ISPs.


Do note there is no changes to your policy if it was applied before 7th March 2018. However, we cannot rule out the possibility the insurers of making any changes to the plans.

What are the changes?

The patient must bear the lower of 5%  or an annual cap of S$3,000 co-payment for new Integrated Shield Plan riders.

To manage cost, insurance companies will also also have their approved panel of doctors. The annual cap of S$3,000 applies if  the insured is treated by the doctors in the approved panel or had received prior approval from the insurer on the treatment. This works similarly to some of your employee benefits where the insurer requires your medical consultation to be with a particular GP.



Example of the new IP Claim 

Example 1



If there is no rider purchased, the patient/insured will have to bear the full amount of $13,150 assuming the balance is claimable by his IP.



Example 2Capture


We can see from the two examples that the new IP has not much impact on small bills. The bill size needs to be at least $60,000 in order to have any difference between a preferred and non-preferred or pre-authorised and not pre-authorised treatment.


There are a few options that we can do to reduce or remove the 5% gap. There is no right or best way to do it and it depends on individual’s objective as well as budget. If you had purchased your IP before 7th March 2018, good for you. If you had not, please do so ASAP instead of KIV for any changes from insurer.

My colleagues and myself are conducting sessions for groups who need any clarification on the changes or to know how it affects you. All you need is to have a minimum group of 5 and we will arrange for a session for your group or staff.