What's the best way to find health insurance for those in the 40-55 age group? Should we go for specialists like Bupa or should we rely on riders that come with a life policy? Thanks
_ DonANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA By law, life insurance companies cannot sell you a stand-alone health insurance policy; only non-life assurance companies can do that. No one is quite sure why the Office of the Insurance Commission (OIC) imposes such silly rules. Therefore, a health insurance policy is sold as a term rider with a life insurance policy. Simply put, it's like buying a car with optional extras. Essentially, there are two main choices, either a stand-alone policy from an assurance company, or a term rider from any of the life insurance companies.
Concerning stand-alone versus term rider, the choice is not always so simple because the main policies are governed by the OIC; therefore the range of benefits is very similar but the premium tends to vary quite a bit. So if you want a stand-alone health insurance policy, the only realistic choice is Bupa Blue Cross, which is a leading health assurance specialist in Thailand. In 1996 Blue Cross joined Bupa (British United Provident Association), which is one of the largest independent healthcare organisations in the world.
However, Bupa Blue Cross is not a life insurance company, so a major drawback is that its insurance premium is not tax-deductible. Secondly, the fine print in the Bupa Blue Cross policy tends to be more restrictive than that of other companies.
Personally I prefer a stand-alone policy for its transparency and simplicity. People in the 40-55 age group should expect to pay an annual premium of about 37,000 to 47,000 baht depending on the package. But if you want to include the full-blown patient coverage as well, the premium will be in the range of 76,000 baht.
I have been living in the US for the past 20 years, and I want to come back and live here after retirement. I have no idea how to make money from my $100,000 savings.
_ ChanaANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA According to the US Social Security Administration, 65-year-olds who retire in 2015 will face 17 to 21 years of post-career life on average, with more than one in four living at least 25 years beyond 65. As a result, today's retirees are basically stuck between a rock and a hard place: low interest rates, volatile stock markets and unprecedented longevity.
In an ideal world, I would suggest that you adopt the "4% rule" _ that is, if you invest in a moderately risky portfolio of 60% stocks and 40% bonds, you can initially withdraw 4% of your assets, increase that amount in subsequent years to keep pace with inflation, and still have a 90% probability of not running out of money over a 30-year retirement. But to be on the safe side, you may have to work longer and retire later, or both, in order to build up a sufficient nest egg to retire on.
Interestingly enough, Thailand is becoming more popular as a retirement destination for many Americans and Europeans.
The cost of living and health care are cheaper too, which should make it more affordable for people like yourself.
Can you help me organise my finances? My income is around 55,000 baht per month, I pay 12,000 baht for my apartment and utilities bills, plus around 7,000 baht for miscellaneous items. I have to pay 15,000 baht a month expenses for my children, and I also have a 9,000 baht monthly payment for a condo over the next 10 months. My job security hasn't been looking good lately. Thank you
_ MANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA A good place to start is to look at your cash flow. Your current cash inflow is 55,000 baht while your total cash outflow is 43,000 baht, which leaves 12,000 baht for savings. Cash outflows can be divided into two main categories: fixed expenses that do not change from month to month such as rent or mortgage payments, and variable expenses such as food, clothing, medical bills and recreation, which tend to vary from one month to another.
Ideally, your total monthly long-term debt payments, including mortgage and credit cards, should not exceed 36% of your gross monthly income.
Since there is not an awful lot you can do about your fixed expenses such as the mortgage on the condo, rent and utilities, additional savings can only come from a reduction in variable expenses.
Look for luxury items dressed up as necessities.
It is also a good idea to set up an emergency or "rainy day" fund equivalent to five to six months' living expenses.
The Thai Financial Planners Association is the certified financial planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted to them through email@example.com or posted at TFPA's webboard at www.tfpa.or.th
About the author
Writer: Thai Financial Planners Association