Month: June 2018

Next to rent, food is the largest bill that most households face. If you wonder why hundreds of dollars seem to disappear from your bottom line every month, read about these cash drains.

1. Convenience store snacks – Stopping at the local convenience store for a drink and a snack can easily become a habit. It seems like an innocent treat, a little pick-me-up on the way to work or a reward for another day finished. But what does this habit cost? For example, imagine that you purchase a 20-ounce soda and a small bag of chips every workday. The average soda price is around $1.25 and the chips are another $1. In a five-day workweek, this habit totals $11.25, or $45 per month. The fix? Consider purchasing a large bag of chips from the grocery store (around $2) and keep this bag in the car, making it last all week. This one adjustment will save you $12 per month.
2. Buying name brands when generic will do – Yes, sometimes the name brand version of a product will be of a better quality than the generic. However, many products are virtually identical, regardless of brand. Experiment with generic products to see which are better deals without losing taste and freshness. Every generic product that replaces a name brand on your shelf can shave 5-10% off of your grocery bill for that item.
3. Not using coupons and sales – Men are especially guilty of this one. Clipping and using coupons takes a little time but can substantially reduce your food bill, especially on items that do not have an acceptable generic equivalent. It only takes a minute to scan the grocery store weekly flyer to find the bargains in the store. Sometimes you can pair an in-store sale with a coupon for extreme savings. One word of caution: Do not let coupons convince you to buy premium brands that will cost you more in the long term than the coupon is worth. Manufacturers use coupons to entice consumers to try, and hopefully get hooked on, their product.
4. Huge portions in restaurants – A few years ago the restaurant industry hit on a new way to sell more food. They simply increased the size of the plate portions and raised the price accordingly. Few folks complain about the inflated price because the portions are so generous. When dining as a couple, do not be embarrassed to split an oversized plate between the two of you. Every time you use this technique you are halving your restaurant bill.
5. Wasting leftovers – This is worst in single occupancy households. You cook a large portion of food, eat until full and put away the leftovers. The next day you do not feel like eating the same meal twice, so you make something else. Most of the leftover food ends up in the garbage or being fed to a pet. If you are single and find yourself throwing out food every week, try working out a dining schedule with your other single friends. Take turns cooking for one another so that all of the food is used on the night it is made. If you don’t want nightly dinner guests, try taking the leftovers to work and doing a lunchtime food swap with your co-workers.
6. Not disputing overcharges in the grocery store – Food items are frequently marked down and discounted. Sometimes the reduced price does not find its way into the automated checkout system. Pay attention to the food items as they are being scanned and point out any discounts, buy-one-get-one bargains or reductions that are not calculated into the bill. Before you leave the store, glance at the register receipt to double check that you are paying the correct price.
7. Shopping on an empty stomach – Snack items and junk food looks wonderful when you are already hungry. Try to put off grocery shopping until just after you’ve had a meal.
8. Buying into menu extras – This is another restaurant sales tactic. From loaded baked potatoes to shrimp toppings on salad to that delicious appetizer, it is easy to say yes, yes, yes! These add-ons add up to big bucks for the restaurant. Just say no.
9. Not taking home the ‘doggie bag’ – This is the equivalent of wasting leftovers, restaurant style. The big difference here is that you are leaving behind food that you have paid a premium for. Take home the leftovers, even if they do not appeal to you right now. Eating the remainder for lunch the next day could save you $5 to $10.
10. Allowing kids to make impulse purchases – It happens so often that it’s nearly a cliché. The kids convince you to purchase the new Hannah Montana cereal. You pay $4 for a box of cereal that ends up in a landfill or as bird food. Children are even more susceptible to advertising than the adults, and they have the added luxury of not worrying about the financial impact of their food purchases. When possible, grocery shop without them or hone your ‘saying no’ skills.

What is insurance?

Speaking from the Asian market viewpoint, insurance is still something most people would stir clear of. Everyone can somehow come up with at least one reason why they shouldn’t take up a policy but in the first place, do they really understand what insurance is about? If they don’t, I really hope they’d give an insurance agent a chance to explain to them – why insurance has become a necessity today (and not just tomorrow) – when he/she approaches them.

Have a look at the list below. I’m sure at least some, if not all, are on your own concern list.

1. Emergency fund

It’s not uncommon nowadays to hear about down-sized o solvent organisation. One minute you’re right on top of the chart, and the next you’re given four month’s compensation (or none at all) to leave the company because they can’t afford to pay you anymore. It’s really terrifying especially for those who have huge commitment to their families and tonnes of debts to pay.

Saving some of your salary from the beginning of your career could save at least some of your trouble should retrenchment happen to you.

In insurance, there is such thing as a policy loan and this is immediate and less painful compared to getting loans from a bank or a money lender.

If the going gets tougher, surrendering the policy for the cash value would be an alternative to policy loan.

2. Retirement fund

How much do you need to support your standard of living every month? When you retire, how many more years do you think you have before you hit the road and not come back to earth? Most people live for a good thirty years after retirement. So what are you going to survive on if your income has stopped? Most people find that their provident fund or some savings in the bank wear out just five years after their retirement. After that, some go back to work, some depend on their children (which is a struggle and uncertain) and some… well, live miserably for as long as they can.

Putting aside some money for an endowment plan is a good way to build up a retirement fund. The moment you retire, the money is just right there, begging to come out and give you an easy life after you’ve worked for so many years. That’s the time to pamper yourself. Make sure you have lots to spend by then!

3. Education fund

This is for people who plan to have children. Before your child is born, look around for good education fund. Nowadays, college fees are killers. Some people sell their properties just so they can send their children to college. Others struggle to work 25 hours a day so their children get to learn some kind of skills in small institutions.

Instead of just putting money in the bank where you save before you create, purchase an education plan where you can create the fund for your child as you save. Most of these plans come with premium waiver in case a parent is unable to continue paying due to death or disability.

4. Hospitalisation and surgical

You can determine a lot of things in your life but some of the huge issues in life that you can’t foresee are accidents and illnesses. You could be hospitalised for any reason at all. You know you didn’t plan for all these but they come and steal your savings like a thief in broad-daylight. So if you have a medical card, your hospital and surgical bills can are paid by the insurance company, as long as you remember to renew it annually. Just think: you may not have paid much for your premium but whenever you need money for a medical emergency, it’s right there for you.

5. Critical illnesses

Upon diagnosis of a critical illnesses such as a stroke, the insurance company pays a lump sum of money to the insured. This is useful for covering expenses are than your hospital bills since the bills are already paid for by your hospitalization and surgical policy.

6. Personal accident

There are three types of people in the world where personal accident policies are concerned. The first group does not think that getting into an accident is possible if you’re always very careful. But please remember that accidents DO happen anywhere, anytime and to anyone. You don’t have a crystal ball to tell you when or whether or not you’re going to have an accident. You can be the most cautious person in the world but the person next to you may not.

The second group consists of ‘PA extremists’. They buy all the personal accident policies they can find or are offered but are not sure whether all the policies are necessary and/or claimable.

The third group is buys moderately. Whichever group you belong to, know that you need a personal accident policy to go with your life and medical plans. For more information, please read my 11 Things to Consider When Purchasing a Personal Accident Coverage. Somehow, people tend to realise they need this only when it’s too late.

7. Death or total permanent disability

This is a basic life policy where a lump sum is paid to the policyholder if he/she is disabled or to the beneficiary upon the death of the policyholder.

When a person is disabled and are unable to perform the tasks that his job requires of him, he will not be able to earn any income. The money claimed from this policy can be a lot of help with regards to continuing his financial support of the family, additional medical expenses or even hiring a nurse for home care.

Upon death, the money claimed could help loved ones in funeral expenses or settlement of outstanding liabilities.

8. Income protection

In the event of a misfortune, the income of a person is always one of the first thing to be affected. Whether or not you have a family, a financial commitment is something you can’t avoid. If you’re single, you have your car and/or credit cards to pay for. If you have a family, your expenses are three to ten times more, depending on the size of your family. When your income stops, your commitment suffers.

Buying an insurance policy helps you to continuously support your own or your family’s needs should an unfortunate event happen. Remember, whatever your marital status is, your responsibilities do not disappear along with your inability to bring in income. Somebody still has to pay your bills…

9. Business continuation

If you are a proprietor of a business and you have a few partners, it would be good to buy policy which allows you to divide the shares of your business equally should something unfortunate happen to any one of your partners. Upon death or disability of a partner, the insurance company could provide the finances for the other partners buy his/her share so that the business can continue to function.

10. Senior citizen’s fund

Who says insurance is not for those over the age of 55? A senior citizen can still buy a policy which pays the sum assured upon the death of the insured. This would be helpful for their loved ones to settle funeral expenses or leftover medical bills. None of us, regardless of what age we are should have to leave this world, worrying about how our loved ones would have to cope financially when the emotions involved is bad enough.

Having said that, it’s all about how a person prioritise his/her expenses. Saving money in the bank is essential too but we can’t keep all the eggs in just one basket. Insurance is also a form of savings. It is a necessity now because it provides protection besides handling your other financial worries. Everyone is encouraged to have a comprehensive coverage – life policy, critical illnesses policy, hospitalization and surgical policy and personal accident policy – in order to optimize the benefits of insurance.

Get one today before it’s too late. No one needs to look back and say, “Should’ve”, “Could’ve” or “Would’ve” on their hospital bed.

Nowadays, almost everything you buy or any company you register with would offer you a Personal Accident coverage with high sum assured and discounted premium. These offers can be really attractive. Anyone would feel inclined to buy. After all, a coverage is a necessity. It’s cheap! And you only have to pay 50% of the usual premium now and every time you renew your policy!

Some people own over 20 personal accident policies without knowing the benefits. When it’s time to make claims, probably only one or two of those would pay. What about the others? They tell you, “Oh, this plan does not cover what you just went through…” So you paid – discounted as it may have been – for absolutely nothing. You’d have to make sure you die of an accident in order to reap the benefits of all the policies you’ve bought. Well, it’s not you, but your beneficiary who will get that lump sum you’ve been hoping for.

Here are some of the things you need to take into account when purchasing a personal accident coverage:

1.      Accidental Living Benefit

If you survive an accident, you will receive a lump sum for the above benefit as stated in your policy. The living benefit is usually twice the sum assured, which is the death benefit.

2.      Accidental Death Benefit

If you do not survive an accident, you beneficiary will receive the sum assured.

3.      Accidental Dismemberment Benefit

If you survive an accident with loss of any part of your body, you will receive a percentage of the total amount of cover, depending on the severity of your injuries. The percentages vary from insurer to insurer.

If you survive an accident with permanent and total disability, you will receive the sum assured.

 4.      Medical Reimbursement

Let’s side-track for a paragraph. A hospitalisation and surgical coverage allows you to claim if you are hospitalised. However, if you are admitted to the emergency ward for some stitches following an accident, you will not be able to claim from your hospitalization and surgical policy.

Medical reimbursement under the personal accident policy lets you claim your medical and surgical expenses, whether it is an out-patient or in-patient treatment for any injuries caused by an accident. There is a maximum amount of claim, depending on the plan offered and the amount of sum assured.

 5.      Treatment Benefit

If you are hospitalised within a certain period of time because of your accident, you will be reimbursed for your medical expenses, up to a maximum amount according to your policy.

 6.      Physician Benefit

You will be reimbursed up to a certain amount of cover if you seek alternative treatment for injuries caused by your accident. These treatment could be acupuncture, bone-setting, chiropractic therapy, osteopathy, or physiotherapy.

 7.      Weekly Indemnity

If you sustain temporary total disability due to an accident and are unable to perform your normal routine, you will receive an amount every week up to a certain period of time as stated in your policy.

 8.      Accident Hospital Income

If you are hospitalised because of an accident, you will receive a daily income up to a certain period after the accident as stated in your policy.

 9.      Home Care

If you are hospitalised as a result of an accident, you will receive an amount in one cash payment for each accident.

 10. Public Conveyance Benefit

If your policy provides this benefit, you will receive a certain amount of cover if an injury or death occurs as a result of an accident while you are travelling in any public transportation.

 11. Broken Bones and Burns

If you suffer broken bones or burns as a result of an accident, you will receive a percentage of the amount of cover, depending on the severity of the injury.

 Of course, there is not one policy that has all the benefits. You can always consult your insurance agent on the benefits that you wish to receive for the policy that you purchase. For some people, they may not see it necessary to purchase one with the benefits of broken bones and burns cover. Others, may prefer accident hospital income to weekly indemnity. However, if your agent is creative in nature, he/she would be able to package a few policies in such a way that they cover as comprehensive as possible and provide most, if not all the benefits.

Having said that, your needs (and budget) should be the main concern of your agent. He/she should be able to whip up a concoction that best caters your needs.