Jonathan Chua

Many of my clients often compare buying life insurance to gambling. Their rationale is that by paying premiums to cover an insured event, we are betting against the insurance company, as insurance is an expense and one effectively loses the “bet” if the insured event such as death, disability or critical illness does not befall us. It feels similar to placing a bet on a table game in a casino and hoping for a favorable outcome. So is insurance truly like gambling? Let us tackle this question from a risk management perspective. We understand that when it comes to risk financing, there are two options: 1) Risk Acceptance (Not buying Insurance) 2) Risk Transfer (Buying Insurance) Let’s explore the 2 options in detail. Figure 1 – Possible outcomes from being uninsured/under insured Financially, there are 3 possible scenarios that can happen to an individual who chooses not to buy life insurance and accepts any risks along the way. The optimal scenario ...

Insurance should cover every person who seeks coverage, whether or not they suffer from pre-existing medical conditions, chronic diseases or congenital health conditions, said Singapore’s ambassador-at-large Tommy Koh . Speaking on Thursday at an Institute of Policy Studies (IPS) roundtable on Singapore’s population trends, Koh, who is also special adviser to the IPS, said the government should step in to ensure that insurance coverage is fair and accessible for all. He identified insurance as one area where Singapore “didn’t get it right”, touching also on the nation-state’s failure to achieve inclusive growth — more specifically in terms of plugging the income gap. “We need to fix the equity of our existing healthcare system. We have a system at the moment that does not meet my standard of fairness,” he said. “I think the state should intervene and require all insurance companies to insure people with prior medical conditions. There should be no one in S...

It seems that the recent speech by the Managing Director of MAS has triggered a strong response from the industry. I guess it is because he mentioned points that will have a significant impact to the industry like raising the entry criteria from the current 4 'O' levels to keep up with current education trends and removing commission based sales to fee based structure. Some opinions I heard include: - "Oh no, it is going to mean more exams and paperwork." - "It simply will not work! Customers will not pay a fee. They have been so used to receiving free advice." In my opinion, raising the entry criteria is only keeping up with the current education standards. Most of the population is at least a diploma holder. At least, it will make the industry seem a little more professional as this point is often poked fun at with comments like "If you only have 4 O levels and cannot find a job, just go and be an insurance or property agent."....

U.S. insurance consumers want their insurers to offer more personalized service and reward customer loyalty, according to Ernst & Young’s Global Consumer Insurance Survey 2012.The survey also finds that consumers of life/annuity and property/casualty policies are willing to buy multiple products from the same carrier if they are tailored to meet their individual needs, and that Millennials believe the strength and health of an insurer’s brand is more important than the price of the insurance product. Ernst & Young surveyed more than 24,000 consumers of insurance products in 23 countries across seven global regions, making this body of research one of the largest surveys of consumer attitudes about the insurance industry ever conducted. We designed this survey to be far-reaching, to touch across geographies and demographics, and as a way to help insurers contend with one of their biggest challenges: anticipating their customers’ needs and devising ways to serv...

Retirement plans may not strike a chord with young investors. However, it is never too early to start saving for retirement. By selecting the appropriate wealth management platforms, including those providing financial protection, one can get a head start in achieving one's wealth goals and securing a comfortable life during their golden years. Investment-linked insurance The relatively modest returns of low-risk products may not match the expectations of younger investors, who tend to prefer fast returns and are willing to bear higher risks in exchange for higher returns. We have observed more young people joining the investment fray in recent years, growing their wealth through monthly investments in stocks, funds and similar products. While it is good for young people to invest early within their means, they should not neglect their own protection needs. Should an unfortunate accident result in the loss of ability to work, this will derail all of one's financial plans, no...