Questions from a Young Person

Hi Mr. Tan,

1) I joined the workforce recently. I plan to start saving $100 a month. Can you recommend any cash value insurance, unit trust or bonds?

Reply:
It is better to buy Term insurance and to invest your savings in a diversified, low cost fund. Read this FAQ: http://www.tankinlian.com/faq/savings.html
You should avoid a cash value policy, as the cost is high and takes away too much of your savings.

2) I currently hold two life term insurance policy, i.e. the Dependent Protection policy and a Term policy bought while under National Service. Can a person claim under two or more life term insurance if a mishap occurs?

Reply:
You can claim on all of your life insurance policies, including the two Term policy that you mentioned above. Life insurance is a valued policy and is not subject to the principle of indemnity (which applies to motor and medical insurance). The principle of indemnity limit your claims to the actual expenses that you have incurred.

3) Can a person invest in shares without a stock broker?

Reply:
You have to buy shares through a stockbroker. The commission is low, i.e. 0.3% only.