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revhappy 18-07-2018 11:18 AM

Hi BBCW, this may be slightly off topic. Do you use cardup at all? I pay rent of 1.8k and I am considering using cardup and UOB one account to hit the 2k spend and get 5% cashback minus the cardup fee of 2.6%.

What are the chances that cardup folds up like obike and takes our money and doesn't pay the rent to the owner?

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BBCWatcher 18-07-2018 12:06 PM

Quote:

Originally Posted by revhappy (Post 115545444)
Do you use cardup at all?

I don't.

Quote:

I pay rent of 1.8k and I am considering using cardup and UOB one account to hit the 2k spend and get 5% cashback minus the cardup fee of 2.6%.
There's a certain logic in that, and I see CardUp itself suggests you chase such rebate offers. UOB and CardUp had a joint promotion late last year (2017).

Quote:

What are the chances that cardup folds up like obike and takes our money and doesn't pay the rent to the owner?
That's possible. CASE suggests you should be able to file for a chargeback with your credit card company in that event. CardUp doesn't collect/keep deposits, to my knowledge, so your (limited) consumer rights should provide some protection. Credit card chargebacks are a hassle, of course, but doable.

You could split the rental payments into $900 chunks to cut your remaining risk in half. Just after the first payment arrives in your landlord's bank account, make the second payment. The second payment will still need to be received before your landlord's monthly payment deadline, but this can be done. And you can split credit card affinities that way if helpful for rebate purposes. If your landlord is particularly cooperative then he/she could let you know when each payment arrives, something you'd want to know anyway even if you don't chop the payment into chunks. I'm assuming CardUp wouldn't have a problem with this.

Just one caution about "chunking": in some contexts that's a financial crime, a crime called "structuring." The third highest ranking U.S. government official (second in line to the presidency) served hard prison time for structuring not too long ago. You don't have any illegal intent or purpose here, so I cannot imagine "chunking" this rental payment would run afoul of any law or regulation. But in other contexts, exercise some care.

revhappy 18-07-2018 01:23 PM

Quote:

Originally Posted by BBCWatcher (Post 115546257)
I don't.


There's a certain logic in that, and I see CardUp itself suggests you chase such rebate offers. UOB and CardUp had a joint promotion late last year (2017).


That's possible. CASE suggests you should be able to file for a chargeback with your credit card company in that event. CardUp doesn't collect/keep deposits, to my knowledge, so your (limited) consumer rights should provide some protection. Credit card chargebacks are a hassle, of course, but doable.

You could split the rental payments into $900 chunks to cut your remaining risk in half. Just after the first payment arrives in your landlord's bank account, make the second payment. The second payment will still need to be received before your landlord's monthly payment deadline, but this can be done. And you can split credit card affinities that way if helpful for rebate purposes. If your landlord is particularly cooperative then he/she could let you know when each payment arrives, something you'd want to know anyway even if you don't chop the payment into chunks. I'm assuming CardUp wouldn't have a problem with this.

Just one caution about "chunking": in some contexts that's a financial crime, a crime called "structuring." The third highest ranking U.S. government official (second in line to the presidency) served hard prison time for structuring not too long ago. You don't have any illegal intent or purpose here, so I cannot imagine "chunking" this rental payment would run afoul of any law or regulation. But in other contexts, exercise some care.

Thanks!

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Wishdom 18-07-2018 11:38 PM

I'm 26 and looking at a 200k term with accelerated ci.

I got a quote from GE, where they bundle up payassure as a rider. I was told that it will be cheaper if I add it as a rider. Is that really true?

The quote is to age 80 for ci, 65 for dii. Price is at 738+162.5

Some comparisons
https://i.imgur.com/BDrKa4dl.png
https://i.imgur.com/PrM1aUjl.png



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tangent314 18-07-2018 11:48 PM

Usually riders are cheap because any claims on the rider reduces the sum assured on the main coverage by that same amount. Check the policy first.

d9_lives 19-07-2018 11:44 AM

Fantastic! BBWatcher is one of the most helpful members in moneymind.

BBW, why don't you start your own financial blog/podcast?
Something like financialsamurai.

BBCWatcher 19-07-2018 11:53 AM

Quote:

Originally Posted by Wishdom (Post 115559270)
I got a quote from GE, where they bundle up payassure as a rider. I was told that it will be cheaper if I add it as a rider. Is that really true?

Quote:

Originally Posted by tangent314
Usually riders are cheap because any claims on the rider reduces the sum assured on the main coverage by that same amount.

You (Wishdom) should still shop around, specifically to check with AIA and Aviva on their DII offers.

By the way, in my view it'd be better (more effective, more powerful risk reduction) to spend precious premium dollars on raising the DII payout figure (if not already near the 75% cap), even if that means reducing or dropping CI. I would also make sure that your GE representative is quoting PayAssure with the 6 month waiting period, to avoid overspending those precious premium dollars.

Do you have any dependents? A lot of 26 year olds don't. If you don't, you don't need life insurance. And I don't know why you need life insurance to age 99, as one of your screenshots suggests. What's the logic there?

Wishdom 19-07-2018 02:25 PM

Quote:

Originally Posted by BBCWatcher (Post 115565077)
You (Wishdom) should still shop around, specifically to check with AIA and Aviva on their DII offers.

By the way, in my view it'd be better (more effective, more powerful risk reduction) to spend precious premium dollars on raising the DII payout figure (if not already near the 75% cap), even if that means reducing or dropping CI. I would also make sure that your GE representative is quoting PayAssure with the 6 month waiting period, to avoid overspending those precious premium dollars.

Do you have any dependents? A lot of 26 year olds don't. If you don't, you don't need life insurance. And I don't know why you need life insurance to age 99, as one of your screenshots suggests. What's the logic there?

I will love to shop around but it is quite confusing and I do not have close friends from aia and aviva.

The age to 99 is just there for comparison purposes. Do ignore it. I'm looking at age to 80 specifically.

My life insurance are a sort of protection for my parents' retirement. I think I currently have close to 1m coverage for death.

Noted on the dii. Much appreciated.

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salmonella 19-07-2018 10:39 PM

Thanks BBCWatcher!

Quote:

Originally Posted by BBCWatcher (Post 115320031)
In the hierarchy of insurance needs, DII ranks high, in my view. (And I have some.) Future earning potential is the most important asset most people have, and significant or total loss of that income would be utterly catastrophic.

ElderShield and CareShield Life are forms of Long-Term Care (LTC) insurance. They can be important, but they have a much narrower definition of disability. The debate about CareShield Life will be largely moot for younger adults (and future generations) since it’ll be compulsory. But it’s a different form of insurance anyway.

My spouse and I in our early 40s have medical (including. rider) and life insurance. We are both working, but do not have DII. I'd opted out of ElderShield, but my spouse did not and is probably being covered by ElderShield 400. I thought that ElderShield/Eldershield 400 was not useful for us and that we might as well self-insure for that level of coverage, and was therefore encouraging my spouse to opt out of it, before learning about CareShield Life.

Is DII or CareShield Life or both appropriate for us?

Quote:

Yes, absolutely. DII protects against income loss due to disability (partial or full inability to work). As far as I know all of the DII policies sold in Singapore end coverage at age 65, a typical/traditional retirement age. Savings (hopefully wisely invested), CPF LIFE, Medisave, and (if profoundly disabled) ElderShield or its CareShield Life successor, are supposed to carry you onward from there. Saving is more difficult with (up to) 75% income replacement and no salary increments. Having a disability that affects your income earning (and other aspects of your life, for that matter) is no great fun, to say the least. But zero insurance would be even worse.


The vast majority of people cannot self-insure against this particular risk (significant or total loss of future income due to a work-impactful disability) before and during the early years of their careers. But, over time, yes, they may be able to self-insure against disability and long-term care needs, as savings build up. And you should properly adjust your insurance coverage, if necessary, to account for that reality if your financial situation allows.
So, the thinking is to insure our ability to make hay while the sun shines, and DII is most targeted for this need. CareShield Life or the supplementary private plans are not suitable for this because:
- cost prohibitive to increase the payouts to something like 50% or 75% of pay
- these plans only provide coverage from age 30. (not an issue for my spouse or I, since we are already past 40)
- harder to qualify for payouts (i.e. 3 ADLs)

On the other hand, CareShield Life and the supplementary plans do provide coverage beyond DII
- beyond age 65. but at this age we should have already built our nest egg. If the nest egg is projected to be adequate we might self-insure and opt out of CareShield Life altogether. Otherwise, we might want to opt-in and purchase sufficient coverage for long-term care costs (beyond the expected daily living expenses which should hopefully be provided by the nest egg)

Is this correct, and have I missed anything?

Quote:

In DII, there are at least a few ways you can “automatically” adjust coverage. One way is to choose the longest waiting period (a.k.a. elimination period) before monthly benefits are paid. The longest available in Singapore is 6 months, and that’s fine. Your emergency reserve fund should bridge you at least that long, and if you don’t have an emergency reserve fund that can handle 6 months of income loss then you soon enough will, since that’ll be a priority to solve as you earn income. If the particular insurance carrier doesn’t offer a waiting period that long, and you still otherwise like their policy, so be it, but 6 months really is fine.

Another possibility is to pick a different term, such as age 60 instead of age 65. I’m a little less keen on that idea since you can always drop coverage at age 60 (or even earlier) if you’re able to self-insure. But it is possible to pull back from an age 65 coverage term limit right at the beginning, if you wish. If, for example, you’re expecting a large bequest (and reliably so) that couldn’t possibly be received any later than your age 60, then there you go, that coverage term might make perfect sense right out of the gate.
Do DII plans keep paying for as long as we are unable to work, up to 65? That sounds like it could be a lot of money in your bus example! Do they, for example, require you to take up whatever work you can do, and then pay the difference?

I wonder how many years someone can get vertigo for... Because if it can be gamed, it is unsustainable and we will eventually be bitten by premium increases.

Quote:

Your dead body won’t care, but somebody expecting to receive the balance of your estate might.
Ok, Someone told me that estate taxes of US assets for N.R.A. might be mitigated by opening joint accounts, bit also to check with a tax advisor. Do you know anything about this?

I can imagine situations where an adverse event affects both joint account holders at the same time, leaving a largeish bill for dependents...

Quote:

They’re not ideal, no. However, they are convenient, and that counts for something. Also, they use U.S. funds probably because they have no choice. The favorable tax treatment available with Irish domiciled funds likely doesn’t pass through to foreign institutions but only to individuals (who are non-U.S. persons).
Since utraderobo seems to work with Ireland-domiciled funds for withholding tax reasons, I suspect that the tax treatment should pass through.

I'd bet that the other robo-advisors were aware of the tax issues when they picked the US funds. Just that have a sneaking suspicion that they may have chosen to manage their costs (commissions and spread eat directly into their profit each time there is a trade or rebalancing event), whereas withholding taxes and estate taxes are borne by the customers and will only be felt in the long term so caveat emptor.

Another way is to buy term life policies to balance the 40% estate taxes, but that feels like it might exceed the cost advantages of the US funds.

Quote:

Originally Posted by w4rdsg (Post 115508531)
Hi BBBCW, question on that most exciting of topics, bond funds!

Years ago I bought LQDE for some USD corp bonds. I think I chose it over CORP because it’s 4x the size and has a higher yield.

You’ve mentioned CORP as your preferred Corp bond fund in the past. Is it just for the global diversification? Looking at CORPs holdings it seems to be dominated by Japan govt treasuries and US multinationals. I’m not super excited by the JP treasuries.

I guess I am biased to stick with LQDE even though it is down a bit more than CORP this year, but I’d be interested to know if you had any other reasons to prefer CORP?

I eschewed CORP for LQDA for the same reason... So the question I have is, why did you pick LQDE instead of LQDA? I believe it's the same fund, just accumulating and with a smaller unit value.

bobobob 19-07-2018 11:11 PM

Have you guys seen this interview?

https://youtu.be/3u7kDfEtKfs

It's long but entertaining. The guy makes some pretty big claims: America heading for an even bigger crash than 2008, countries will be returning to gold standard, encourages people to invest in Singapore lol.

BBCWatcher 20-07-2018 12:13 AM

Quote:

Originally Posted by Wishdom (Post 115567573)
I will love to shop around but it is quite confusing and I do not have close friends from aia and aviva.

You don’t need close friends at AIA or Aviva. You simply make two phone calls, and you ask for quotations on AIA’s Premier Disability Cover and Aviva’s Ideal Income. You’ve probably done far more research on buying the smartphone that you’re holding.

Quote:

The age to 99 is just there for comparison purposes. Do ignore it. I'm looking at age to 80 specifically. My life insurance are a sort of protection for my parents' retirement.
OK, so here’s the first question: are either or both of your parents going to be financially dependent on you at any point in their lives? I’m sure they will be sad if you were to depart this planet before they do, but would their lifestyles be materially negatively impacted because your financial support would not be available?

If the answer to that question is no, then they are not your dependents, and you do not need life insurance.

If the answer to that question is yes, then here’s the next question: is there anything you can and should be doing now to prepare better for the future when you will be supporting them financially? Yes, probably, but please let me know if that’s the situation.

Next question: Let’s assume your youngest parent is 25 years older than you are. (You can adjust that figure accordingly.) If you buy a life insurance policy that runs until your age 80, then that youngest parent will be age 105. Which might happen (very slight chance), but I see two problems here. First, if you were to die at age 78 (for example), you wouldn’t leave behind some modest wealth to help that parent for his/her (probably her) very few remaining years? Yes, you would, surely. The point I’m making is that this math does not compute. If your purpose is to support a parent as a dependent, then life insurance to age 80 is too long. You really don’t want to overbuy insurance if you can avoid it. You want to deploy precious premium dollars as powerfully and efficiently as possible, and put other dollars to good work saving, investing, and building wealth, including residual wealth you leave to dependent survivors.

....So, what are you thinking with age 80 here? I’m not following that part.

Quote:

I think I currently have close to 1m coverage for death.
Why? If you’re fully financially supporting both your parents now from your income, and expect that to continue for the rest of their lives, then that sort of figure could make a great deal of sense. Is that your and their real situation?

BBCWatcher 20-07-2018 12:33 AM

Quote:

Originally Posted by salmonella (Post 115576731)
My spouse and I in our early 40s have medical (including. rider) and life insurance.... Is DII or CareShield Life or both appropriate for us?

DII likely is quite appropriate, yes.

It’s fairly likely there’s overlap between your life insurance (and its “Total and Permanent Disability” coverage) and CareShield Life. Since your wife has ElderShield she’ll want to consider carefully whether it makes sense to switch over to CareShield Life when the time comes.

Quote:

So, the thinking is to insure our ability to make hay while the sun shines, and DII is most targeted for this need.
Correct. Your joint 20+ years of future earning potential is probably your single most valuable asset, and its partial or full loss would be a true calamity. And that’s a job for insurance, the only job, really: to help cope with calamities you cannot really cope with on your own.

Quote:

....Is this correct, and have I missed anything?
It’s a fair summary, I think.

Quote:

Do DII plans keep paying for as long as we are unable to work, up to 65?
Yes.

Quote:

That sounds like it could be a lot of money in your bus example!
Oh, yes.

Quote:

Do they, for example, require you to take up whatever work you can do, and then pay the difference?
It depends on the policy, and you have to read the policy definitions carefully. Aviva seems to have a somewhat less generation definition, and their premium may reflect that.

Quote:

I wonder how many years someone can get vertigo for... Because if it can be gamed, it is unsustainable and we will eventually be bitten by premium increases.
Not really. These insurers all require expert medical assessments, and they also won’t insure more than 75% income replacement in order to cut down on moral hazard problems. DII has been available in Singapore for quite a long time now, and there doesn’t seem to be any particular market problem.

Quote:

Ok, Someone told me that estate taxes of US assets for N.R.A. might be mitigated by opening joint accounts, bit also to check with a tax advisor. Do you know anything about this?
It probably doesn’t help. The most it could possible do is effectively double the exemption ($120,000 instead of $60,000), but even that might not be the reality if you’re gifting your spouse/partner his/her “half” of the assets.

You don’t really have to jump through hoops. The popular Irish domiciled/London traded ETFs work just fine. Keep your cash at your U.S. broker at or below $60,000 as well, and that’s that.

Shiny Things 20-07-2018 12:36 AM

Quote:

Originally Posted by bobobob (Post 115577450)
Have you guys seen this interview?

It's long but entertaining. The guy makes some pretty big claims: America heading for an even bigger crash than 2008, countries will be returning to gold standard, encourages people to invest in Singapore lol.

Lol, it's Peter Schiff. Schiff's been saying "there'll be an even bigger crash than 2008" since about 2009. He's never going to be able to admit he's wrong.

w4rdsg 20-07-2018 09:44 AM

Quote:

Originally Posted by salmonella (Post 115576731)
I eschewed CORP for LQDA for the same reason... So the question I have is, why did you pick LQDE instead of LQDA? I believe it's the same fund, just accumulating and with a smaller unit value.

I prefer distributing ETFs (I hold VWRD too) to use the coupons/dividends to maintain my desired allocation. If you are regularly DCAing then it gives you a few percent more flexibility to avoid having to sell to rebalance between stocks and bonds.

If your only USD asset is International Stocks then ignore that and buy an accumulating ETF like IWDA.

While I dislike selling to rebalance, I hate doing currency conversions. Commissions to banks and brokers compound too!

Maeda_Toshiie 20-07-2018 12:28 PM

Quote:

Originally Posted by Shiny Things (Post 115578572)
Lol, it's Peter Schiff. Schiff's been saying "there'll be an even bigger crash than 2008" since about 2009. He's never going to be able to admit he's wrong.

He'll be right one day; maybe within the next 100 years.


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