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Partnership Insurance
Usually, partnership insurance plans are simple cross-purchase policies whereby one partner buys individual policies on each of his partners for the equivalent of each of their share capital (or share value at time of taking up the plan).
Trust Company – Can be set up by the partners as a separate company, e.g. ABC Trust Company. The ABC Trust Company then purchases policies on each of the partners. There will be one policy for each partner – owned by the Trust Company for the benefit of the beneficiaries (the Partners). Upon a claim, the tax-free proceeds are paid to the Trust Company. The surviving beneficiaries receive the cash proceeds and then, under a Buy-Sell agreement, purchase the deceased partner’s share from his / her Estate. The purchased share is then distributed equally, or in proportions specified in the written terms of the Buy-Sell agreement, among the surviving partners. This method eliminates the need for multiple policies to be bought by each partner. As with all recommendations, you, as the agent, are reminded to check with your principal company as well as your lawyer (who has to be familiar with company regulations as well as insurance practices) on the feasibility of your proposals.
The Buy-Sell Agreement – This legal agreement should be properly drawn up by a lawyer who is familiar with such procedures as well as the importance of funding such as arrangement.
Points to be included in agreement:
- How the business is to be valued – an agreed purchase price to be reviewed regularly.
- Surviving Partners are to purchase Deceased’s Partner’s share from his/her Estate.
- Surviving Partners are to assume all debts & liability of the business and discharge the Deceased Partner’s estate from any further legal obligations thereafter.
- The partners are to bind their Estates to the sale of their respective shares in the event of death.
- Agreement on how this purchase is to be funded. (This is where the method of funding using Life Insurance has to be agreed upon).
When funding by Life Insurance:
- Ownership & maintenance (premium payments) should be specified.
- If sum assured is to be reviewed regularly to reflect the value of the business shares.
- How insurance cash values is to be disposed of in the event the Partners retire.
- How the life insurance policies (on the lives of the Surviving Partners) now owned by the Deceased’s Estate should be disposed of.
- Should there be an excess or a shortage (proceeds not corresponding with share values), an agreement on how the difference is to be settled.
Any policy may be used to fund the agreement. However, permanent plans with major illness cover are recommended. Partners, who are critically ill or become totally & permanently disabled would likely be unable to contribute to the business anymore and should therefore, be encouraged to sell-out to the surviving contributing Partners. In exchange, the cash proceeds the afflicted Partner receives for his business share can help him /her tide over hefty medical treatments and other costs involved in making the sudden change in lifestyle.
Feel free to fill up this inquiry form if you have further inquiries on our services.
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Group Benefits For Employee
It has been rightly said that human assets are far more important than physical assets. Besides insuring physical assets like factories, offices and plant and machinery, enlightened corporations also provide many employee benefits to attract reward and retain good staff.
The normal group or employee benefits provided are Group Medical, Group Personal Accident and Group Term Life.
Recent developments in medical insurance now present corporations with choices of non-portable insurance, portable insurance or transferable medical policies. There are pros and cons of each and also tax considerations.
Many corporations have group insurances but have not reviewed them for sometime and are missing out on improved premiums and coverage. Besides the run of the mill group insurances, there are several novel schemes to attract and retain good staff. With the lower EPF contribution by employers, companies now have the opportunity to distinguish themselves from others by offering employee benefits.
Please contact us if you are interested in any of the following:
- Is my firm getting the best of value in terms of coverage, premiums and service?
- Are my employee benefits competitive (if not superior) to my competitors?
- Am I attracting and retaining good staff or can I do better by way of implementing some novel employee benefits?
- Are there advantages to out-source the administration of my company employee benefit schemes?
Employee benefit schemes are meant for the benefit of your staff and also for the benefit of the employer in terms of better welfare, morale and productivity. Are you getting this payoff?
Feel free to fill up this inquiry form if you have further inquiries on our services.
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Business Operation Insurance
Businessmen set up business for one primary reason – to make a profit. They face opportunities and risks. Besides market risks, there are a wide spectrum of risks which are generated by the business operations.
Just to name a few:
- Destruction of assets by fire and other extraneous perils (storm, earthquake, flood, etc.) and resultant loss of profits.
- Burglary.
- Liability to workers for their safety (workman’s compensation and employers common law liability).
- Liabilities to public.
- Professional liability (giving of advice).
- Directors and officers liability for wrongful acts and decisions.
- Contracts Insurance.
While most businesses have taken up insurance against some or most of these risks, the insurance may not be the most suitable and the coverage may not be adequate. Most businesses have not done a thorough risk audit and consequently may not have identified some potentially catastrophic risks. Many have found out only after a disaster has struck them or their neighboring business.
Please contact us if you are interested in any of the following:
- To do a review of your business operations risks.
- To do a review of your present insurances as to appropriateness and adequacy and competitiveness of your premiums paid.
- To review all your potential liability risks.
- To consider outsourcing your insurance function.
Feel free to fill up this inquiry form if you have further inquiries on our services
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Business Continuity Planning
Of the different business forms, proprietorships and partnerships need business continuity planning most because unless there are well thought out plans, these businesses often die with the death of the owner(s).
Corporations are a separate legal entity and they survive the death of shareholders but there are many problems that can arise if there are no shareholders agreements or other business continuity plans. Financial losses are not the only consequence if there are no continuity plans. Relationships can be strained and even families can break up. Besides the well-known buy and sell agreement, there are other ways to ensure an efficient and successful continuity plan.
Please contact us if you are interested in any of the following:
- What are the likely business continuity problems that I a sole proprietor face?
- What are the likely business continuity problems that I a partner face?
- What are the likely business continuity problems that I, a shareholder, face?
- What is a buy and sell agreement and can it apply in my case?
- How do I value my business and how do I determine its potential future value
- What happens when my business breaks up for other reasons?
- What is a key-man policy and how can it help in my business continuity plan?
- How can I find a buyer for my share
- How can I get a good price?
- When should I plan for business continuity since I’m still young?
Feel free to fill up this inquiry form if you have further inquiries on our services.
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General Insurance
Whether it is your personal or company asset (home, office, furniture, equipment, cargo, stocks ,etc) or your liability exposures, advisers are able to arrange competitive coverage and take care of your servicing and claims.
We provide the full range of General Insurance:
- Fire Insurance
- Employers’ Liability
- Consequential loss
- Products Liability
- Public Liability
- Directors officers Liability
- Contractors All Risk
- Engineering Insurance
- Fidelity Bond, Guarantees & Credit Insurance
- Marine Insurance
- Money Insurance
- Professional Indemnity
We go through the following process to ensure that you obtain value-added advice and solutions:
- Detailed study of your needs and existing insurance policies
- Sourcing and Quotations
- Selection of policy and placement of cover
- Continuous Service including claims handling
- And ensuring premiums are competitive at every renewal
Our advice and services are provided FREE. We are compensated by commissions by the insurance companies to compete for your business and we have better negotiating power and market information to obtain good terms for you.
Feel free to fill up this inquiry form if you have further inquiries on our services.
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Unit Trust
Investing in unit trust funds has become a very common and popular choice to accumulate wealth. The number of funds available in the market stands in excess of 600 as at June 2004; these include funds offered by insurance companies through their unit-linked policies. This number is set to increase further as the investor community continues to grow. The main advantages unit trust funds offer include the inherent diversification of risk, accessibility to overseas securities, affordable and flexible financial commitment, liquidity of holdings, and management expertise. The fact that the entire investable portion of your EPF account can be invested in unit trust funds underlines the endorsement given to this class of investment.
There are several categories of funds available for the individual investor. In the main, they can be classified by asset classes such as money market, fixed income, equities, or by allocation in terms of geographical regions, industrial sectors, or a combination of the above. In selecting funds for investment, past performances are not the only indicators. The level of risks taken to generate those returns, the fund cost structure and growth potential in the given economic environment, the managers’ investment philosophy and their investment track record are other important factors to consider.
This is where we help and guide you in making good investment decisions. We help you not only in recommending the fund to purchase, but on an ongoing basis, we can help you manage your portfolio of funds to maximise return in the face of changing market conditions.
Before advising you on the appropriate funds to invest, we would take into account your personal and financial situations at the present time as well as your goals and objectives for the future. As independent advisers, our aim is to do what is best for you; your interest is paramount. Our desire is to maintain a long lasting partnership that is rewarding for both you and us.
Please contact us if you would like to know any of the following:
- Your risk profile and suitability of your present investments in unit trust
- Whether there is a need to rebalance your portfolio
- How to invest your EPF savings and cash savings in unit trust
- Which unit trusts are suitable for investing your retirement funds
Feel free to fill up this inquiry form if you have further inquiries on our services.
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Estate Planning
Estate Planning is not just for those about to die, or the wealthy one who have to pay estate duty. Besides accepting death as a certainty, we must recognize its unpredictability. Besides accepting estate duty as inevitable, we must examine whether there are ways to save if not totally avoid estate duty.
The benefits of estate planning are many:
- To save heirs and beneficiaries maximum of your assets at death and to pay minimum duty to the Government.
- To achieve speedy probate process and payment of estate duty thus freeing up your assets
- To distribute ones’ wealth according to ones’ wishes and avoid transfer to unintended beneficiaries
- To protect the estate against creditors
- To achieve family unity and avoid disputes
- To obtain the best terms for asset like business ownership
- To provide sufficient liquid assets so that real property and businesses and shares can remain intact or be disposed at favorable times
There are many benefits of preparing a will even if your assets are not going to be dutiable (i.e. to pay duty for it) Otherwise your assets will be distributed by a prescribed allocation method under Interstate Succession. (i.e. dying without a will) without a will. Do you know that only half of your assets will go to your spouse and the other half to your child (or children)?
If you have a big estate (and this includes cash and cashable assets like cars, jewelry, shares, club memberships etc) you should explore ways to reduce any potential estate duty. There are other ways than giving your money or assets away. And be careful of dying within 5 years of any gift, as these gifts will still be considered part of your estate.
You can consider trusts but there are many types of trusts so you have to be careful about choosing the right one.
If you are thinking of migrating you must be careful about how this will affect your estate.
Contact us if you need to know about any of the following:
- Your current estate net worth and potential estate duty
- Your estate planning needs
- Writing a will
- Setting up a trust
- Insurance plans especially
- Gifts
- Assignment
- Estate planning for proprietors
- Estate planning for partnerships
- Estate planning for shareholders
- Power of attorney
We work with lawyers and accountants on our panel.
Estate planning is just one of the components of a comprehensive financial plan. We provide planning and advice on protection planning, investment planning, tax planning and retirement planning also.
Feel free to fill up this inquiry form if you have further inquiries on our services.
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Tax Planning
Besides accepting death and taxes as certainties, it pays to examine whether there are legitimate ways to save on taxes. I.e.: Tax avoidance but not tax evasion.
There are a number of potential avenues to save on taxes, some well known and some known only to the initiated. We help clients to identify the potential areas of tax savings which they can benefit from consulting our panel of tax consultants. Just to name a few areas:
- Separate assessments
- Child relief
- Insurance and Security
- Business Insurance
- EPF deductions
- Maid levy
- Capital Gains
- Trust
- Rental and Interest
- Incorporation
Tax planning is just one of the components of a comprehensive financial plan. We provide planning and advice on protection planning, investment planning, retirement planning and estate planning also.
Feel free to fill up this inquiry form if you have further inquiries on our services.
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Education Planning
“The Best Education plan is always a good Insurance Plan on the Parent.” This must be remembered always. Many parents tend to purchase Education Plans without considering proper coverage for themselves. If the Parent still insists on the Education policy for the child, OBLIGE, but package enough term cover on the parent’s life to ensure that the family will receive income when calamity strikes.
This presentation is meant to help you put together a package consisting of a regular Endowment/Education Policy with an Anticipated Endowment policy (if the Budget is large enough). Ultimately however your Goal must be to help the Clients achieve their Accumulation Goal for their Children’s Education.
- The Anticipated Endowment’s regular Cash Payout is what is termed ‘REGULAR GRANT’ in the presentation.
- The ‘Annual/Monthly Income’ is an Income rider. Alternatively you may add on a Level Term/ Critical Illness rider/ policy which will provide a lump sum of Cash in the event of Death, TPD and Critical Illness.
The Cost of Education has been rising ahead of inflation, at approximately 5% to 6% per annum. It is also noted that many parents are intending to send their children overseas because of the high level of stress in the local scene or the inadvertent need to get a “better” qualification in order to compete in the job market.
It is important for you to find out how your prospects feel about local education and why they may/may not consider sending their children overseas. If an overseas education is desired, you should find out where in the world they would like to visit for their children’s graduation.
Note that Endowment Plans alone may not be able to fulfil the prospect’s goal. Other plans, such as Single Premium policies (Bonds, Unit Trusts, etc) should also be considered.
Feel free to fill up this inquiry form if you have further inquiries on our services.
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Investment Planning
People often mistakenly think of savings and investing as being synonymous, or as different words for the same thing.
The fact is that we should differentiate between the two and make conscious effort to address both aspects in managing our finances.
Savings is putting money aside for an expected or contingent expenditure. This may be money reserved for the next six mortgage repayments, or money to standby for a medical emergency; basically the certainty that money is available when it is needed becomes important. Critical factors are safety and liquidity (i.e. ease of converting into cash) in order that cash flow problems would not arise. In reality, the safety factor no longer exists when bank interest rates are persistently lower than the inflation rate, like what we are experiencing these days. While the amount of money can be preserved, its value (i.e. purchasing power) will decline over time.
Investing, on the other hand, is focused on growing your wealth rather than just maintaining value. To grow and accumulate wealth, you would need to acquire assets that are expected to appreciate in value over time. These expectations, however, are mere expectations. There is no certainty that the expectations would materialize, and that is the risk that you as an investor must be prepared to take on. The level of risk would typically commensurate with the level of return expected; the higher the reward desired, the higher the risk is required, which in turn, corresponds to the type of asset. A critical success factor is managing investment risk at an appropriate level through proper allocation of different asset classes. Another factor is the ability to respond appropriately to the changing conditions in the financial markets.
This is where professional would help to guide you in making good investment decisions, not just once, but on an ongoing basis.
Lal & Partners is licensed to advise and transact in insurance products and unit trust funds. Before advising you on the appropriate products to invest, we would take into account your personal and financial situations at the present time as well as your goals and objectives for the future. Our aim is to do what is best for you; your interest is paramount. Our desire is to maintain a long lasting partnership that is rewarding for both you and us.
Please contact us if you would like to know any of the following:
- Your risk profile / tolerance
- Suitability of your current investments
- Ideas on how to invest your CPF savings and your cash savings
- Ideas on how to invest your retirement funds
Feel free to fill up this inquiry form if you have further inquiries on our services.