Late reply to someone who asked earlier....



Life insurance

In regards to tax deductability, it is actually quite interesting. It is only really applicable if you're in the income tax paying scale...ie roughly earning >RM2k/month. The higher your income, the more benefits of tax deductability.
If you look into your income tax form, there are 2 deductions for "EPF & Insurance"(which they just increased the allowance for in 2006) and "Medical".

If you buy life insurance in Malaysia, you can have your premium fully tax deductable(to max allowable)

Eg, your life insurance premium is RM3k/year. If you are in the 13% tax scale, then you save 13% of Rm3K from going to the goverment by just buying life insurance. If you're in the 21% tax scale, then you save 21% of RM3k.

Say you are rich and your life insurance premium is RM10k/year and you're in the max 28% tax scale. Thats more than the allowable deduction for "EPF and Life Insurance", so you proportion part of the RM10K till the max of "EPF & Life Insurance" and put the rest into "Medical". You save 28% of RM10K a year. Much much higher than any FD rate.

One thing you have to know is that the life insurance in Malaysia are all "investment-linked". I don't know of any plan in Malaysia that don't have this. This is why the premium is substantially higher than say Canada for such a low coverage.

By investment linked, it means that whatever premium you paid invested. The insurance company will reinvest that back for you(they behave just like a fund manager). The negative thing is that if you surrender the policy early, you only get back a portion on what you paid. For life insurance to be worthwhile, you need to invest for long period, meaning at least 20 years to get benefit (on top of the benefit of tax deductability). Think of this as a life long investment, just like another EPF (the yearly dividend is almost the same).

Don't forget the benefit of medical and life insurance coverage. Eg. if you're sick and your insurance got a good medical coverage, just drop by Gleneagles for a specialist consult charged to your insurance company. You don't have to be rich to go see an expensive doctor/best treatment!



Another tip.....for those who have a home loan and plan to take MRTA, you can get a life insurance cum MRTA plan.....same coverage + with an investment scheme.



Of coourse, all the above are overly simplified!

minolta

BTW, i'm not an insurance salesman.

What is MRTA?

Stitchy®

1% - 3% good money management. As I know 1 contracts is RM2000 up front, so considering you play with one contract your capital is about RM200,000 - RM300,000 Correct me if I am wrong.
And 1 point movement is RM50 right. So just want to know do you day trade or hold more than a day?

Do you mean claim the difference of Rm4,000 under "medical"?can this be done?

RM2000?

for CI futures,its RM1300 only.I'm still a part timer,i'm still incapable of earning that much ,my capital is around a few thousand.Since i'm trading small time only,i dont need that much.The earning(IF) is quite satisfying to me,my target isnt a thousands or more,but profit,as long as i profit,i'm happy

I do day trades,since i dont need to go to school anymore,i could monitor it whole day,if i think it is worth holding more than a day,then i'll do so,if not,then i will close the position on the end of the day.

RM2000 was when I ask the broker last year.
One more question though, the commission is RM50 for buy and RM50 to sell am I right?
So RM 100 for a complete transaction.
I don't trade the index just browsing through the Star and having a look at the KLCI chart for the last few month.
Also one point movement in the index mean +/- RM50 right?

This post has been edited by whtrader: Feb 20 2006, 01:55 PM

Currently,its RM1300.
The price changes now and then,but it will be around there,wont go too far.Unless there is holiday or stuff like that.The price was RM3000 the week before the 1 week CNY holidays.

Nope,RM50 per trade(includes buy and sell)

kloffe is RM50 per point,cpo is RM25 per point.

One more thing,kloffe is kloffe(CI futures),KLCI is KLCI.Both of them are not 100% same,although their price moves parallel to each other.A lot of people look at the KLCI chart and thought that it is the future's chart,but it isnt.The futures has its own chart.

This post has been edited by mobiusone: Feb 20 2006, 03:18 PM

Ah thank you for updating me . Do you know where I can find the futures chart?

free futures chart?

nah...i dont think there is one

You have to subscribe to some of the charting softwares to get it

This post has been edited by mobiusone: Feb 20 2006, 10:49 PM

The Star paper tells U how many insurance companies out there are offering Investment-Linked Plan.

dolphin_chan...which day?

This post has been edited by KVReninem: Feb 28 2006, 09:33 PM

Every Monday to Friday StarBiz. Investment-linked funds section.

This post has been edited by dolphine_chan: Mar 1 2006, 09:06 AM

For those who doesn't know this, here's something interesting I came across.

http://en.wikipedia.org/wiki/Emission_trading

I heard about this MRTA before from the insurance agent. I think it is a type of insurance that cover you if you cant continue to pay the mortgage loan to your bank, in case of some accident or anything. I'm not so sure about the details of this insurance, maybe the insurance company will help you to pay for the rest of the loan or anything... Need additional explanation from other people...

MRTA=Mortage Reducing Term Assurance

U R rite, normally these days the bank will ask you to get when you get housing loan from them. To cover you and them from any events of death and disablement during the mortgage term only.

It depends on your mortgage term, the amount of coverage will keep reducing as you continue to pay your loan. So when your mortgage is over, so is the coverage.

It's better to get, coz ppl nowadays take 20-30 years of mortgage from bank(as some banks even offer mortgage term up 70 years old) and no one knows what will happen during those 20-30 years, to avoid default in loan payment as well as having the bank lelong your property.

IMHO. this is stupid. You do not take MRTA unless you were forced to. The simple reason is MRTA only handle your mortgage and nothing else. If something really bad happen to you, you need more than your housing loan taking care of. If your house is paid off but you have no money, you still lose your house since you need to sell your house for money.

So, it is cheaper and more effective if you save the money from MRTA and buy life insurance. In that case, you protected in more circumstances and you get paid more than just the house price.

MRTA is for the benerfit of the bank.. It does not benefit you, the house buyer that much.

Dreamer

You are right. It benefits more to the bank than the buyer.

But what to do? If anything happen to me, my family still need a place to stay.

Therefore, I bought MRTA and life insurance. One is to cover my housing loan coz I don't to lose my property to the bank, and the other for my life.

Some questions regarding stock trading.

1) What is the different between PN4 & PN17?

2) What happen if the share we already bought and later been classified as PN4/PN17. Do we still can sell/trade the share?

3) What are disadvantages of trading warrants apart from ineligible to receive dividend?

4) Anybody have traded with OSK188 online (totally online without have to call the remiser). What is your comment about their online facilities?

5) I notice that a lot of counters rising from December until middle of February before most counters drop price together. What your comment regarding this scenario?

TQ

This post has been edited by jalut: Mar 7 2006, 04:42 PM

Why can't you save the money from MRTA and buy a bigger life insurance?? Is it because you are taking a 90% housing loan and the bank force you to buy MRTA??

Dreamer

How much MRTA costs? I meant in a monthly installament? RM100 per month? RM200 per month?

The Power of Three will set us free.