Health Insurance Tips

PROFESSIONAL INVESTMENT ADVISORY SERVICES Quarterly Client Newsletter wealth + security Issue Eighteen 2015 Health Insurance Tips Guaranteed Renewability A health insurance policy is meant to provide cover in times of need. In this regard, it is important to seek out a policy that includes guaranteed renewability. If not, a large claim can lead to the insurance company not granting renewal of the plan when you most need it. This would generally occur following a substantially large claim, eg cancer treatment. Pre-Existing Conditions Pre-existing conditions pose one of the most significant challenges when applying for health insurance. Any previous health conditions or ongoing treatments must be diligently listed and explained in the health questionnaire to allow the insurance underwriter to determine your insurability. If you have an existing plan which already covers the pre-existing conditions, you should consider retaining it in some form especially if it is portable. It is also important for one to take up a health insurance plan as early as possible so that illnesses that develop later in life are already covered by our insurance plans. There are various outcomes based on the type and severity of the ailment: 1) Policy is accepted as standard. 2) Policy is accepted with an additional cost (loading). 3) Policy is accepted with exclusions for anything related to and including the pre-existing conditions. 4) Policy is declined. Outpatient Benefits In an ideal world, we would all like to visit the doctor without being confronted with a bill. Indeed outpatient benefits, where one receives treatment from a clinic or hospital but is not hospitalized, can be included in a health plan; but this comes at a high price. The likelihood of one claiming under outpatient benefits is high and In this issue... - Health Insurance Tips - PIAS Model Portfolios Update for Q1 2015 Continued on next page... - PIAS Investment Outlook for Q2 2015 - PIAS 2015 Awards and Accolades SETTING THE PROFESSIONAL STANDARD FOR FINANCIAL ADVICE IN SINGAPORE

Health Insurance Tips Continued... therefore insurance companies must charge enough to cover these expenses. Some employers have arranged a plan to cover their employees for outpatient treatment. An alternative to lower the cost of insurance is to only insure the most costly risks, i.e. hospitalization and/or include a co-payment/deductible. Maternity Benefits While some insurance policies include maternity benefits, it is important to note if there are any waiting periods. Claims can only be made for treatment after the waiting period which can be as long as 24 months; so you will need to plan ahead. Dental Cover Like outpatient benefits, dental cover is nice to have but not essential for the budget minded individual. It is good to compare the expense of the policy against the costs of the treatments you think you will need. If you have strong healthy teeth and don t anticipate anything more than 1 or 2 visits to the dentist per year, a dental plan may not be necessary. Some employers have arranged a plan to cover their employees for dental treatment. Maximum Entry Age, Maximum Age of Coverage Health insurance plans are generally subject to a maximum entry age, eg 75 years, so it is important to plan ahead to avoid getting caught without insurance. Another point to bear in mind is the maximum age of coverage where lifetime or up to age 99 is preferred. Author Rainer Ackbari, Financial Adviser Representative PIAS The views expressed in this article reflect the personal views of the writer. Professional Investment Advisory Services Pte Ltd and its affiliates, directors, associates, connected parties, employees and/or representatives may not agree with all the views expressed in the article and may own or have an interest in the securities covered in this article. For the full disclaimer, please refer to the last page of the newsletter. SETTING THE PROFESSIONAL STANDARD FOR FINANCIAL ADVICE IN SINGAPORE

PIAS Model Portfolios Update for Q1 2015 2015 Q1 has been an eventful quarter for financial markets as divergence of monetary policies around the world dominated the headlines. However beneath the surface, old themes continue to play with tumbling oil prices, falling bond yields and the strengthening of dollar against virtually all other currencies which has led to rising exchange-rate volatility. Our model portfolios ended the quarter on a positive note, after weathering through market events. (See Chart A). Overall, markets held up relatively well, despite several headwinds, with most major regional indices returning positively for the first quarter of 2015. US equities (S&P 500) delivered positive returns of 4.50% as company earnings continue to grow. European equities (DJ Euro Stoxx 50) have risen strongly by 10.41% with the support of European Central Bank s bond buying program aimed at reviving the lacklustre Eurozone through increased wealth effect. However, depreciating Euro has resulted in lower translated profits for overseas investors. Emerging Market ( EM ) equities (MSCI Emerging Markets) lagged the developed market indices, but still posted good returns of 5.88%. Most Asian countries benefitted from the drop in global commodity prices. (Return figures are all in SGD terms). As for our model portfolio funds, global equities generated returns of -0.36% to 8.37% for the quarter. Emerging markets and commodities have borne the brunt of selling pressure attributed to a combination of currency fluctuations, political instability and falling commodity prices with 10.1% to -7.44%, and -9.26% to -4.20% respectively. Total return and Asian bonds led the fixed income funds with returns of 2.10% to 0.07% while short-duration and global high-yield provided mixed returns from 0.31% to 5.52%. (Return figures are all in SGD terms). From an asset allocation perspective, we are decreasing exposure to Emerging Markets equities and Commodities as the macro-backdrop for both asset groups remains challenging. In their replacements are Europe equities, Global bonds and Mixed Assets Aggressive Mandate. Stock markets continues to make new highs as global interest rate environment remains at all time lows. No one can predict exactly when the tide will turn, just as how the oil price plunge caught most of us by surprise. Overall, we will continue to monitor the situation closely, and we believe that PIAS model portfolios helps in diversification purposes and delivering good returns over the long term. Author Jazil Johari, Analyst (Investment), Product & Research PIAS Figures extracted from Financial Express. Chart A: A - Aggressive S FS 04/09/2014 GTR in SG [3.31%] B - Growth S Funds FS 24/12/2013 GTR in SG [3.12%] C - Balanced S FS 24/12/2013 GTR in SG [2.11%] D - Conservative L FS 24/12/2013 GTR in SG [1.99%] E - Moderate S FS 24/12/2013 GTR in SG [1.92%] 31/12/2014-31/03/2015 Data from FE 2015

PIAS Investment Outlook for Q2 2015 Since the start of 2015, investors have been anxiously looking to US Fed for direction of US interest rate. As anticipated, US Fed dropped the word patient in its statement. However, US Fed chairwoman, Janet Yellen, indicated that Fed policy is likely to remain highly accommodative. European and Japanese central banks continue to inject liquidity through their quantitative easing. European Central Bank s (ECB) EUR 1.1 trillion program will be carried out at least until September 2016 and longer if necessary. Bank of Japan (BOJ) kept its asset-purchase program of JPY 80 trillion unchanged at its March meeting. Flushed with liquidity, global economy continues to recover but many analysts expect the rate of growth in 2015 will be more moderate. Global purchasing managers indexes are indicating a mild expansion in the coming quarters (refer to Chart 1). Global equities had a good start and generated a return of 6.06%. The current economic situation saw global equities continuing to perform in Q1 2015. Global equities had a good start and generated a return of 6.06%. Emerging market equities achieved an impressive 5.88% gain while Singapore equities edged up by only 1.55%. Government bond returns were merely 0.91% with the massive liquidity injections by the European and Japanese central banks. Commodities continued its drop but at a slower pace. (Returns are all in SGD terms. See Table 1 for ease of comparison). Table 1: Market returns for Q1 2015 in SGD terms Indices 2014 Returns MSCI World 6.06% MSCI Emerging Markets 5.88% Chart 1: Global purchasing managers indexes (PMIs) 65 60 55 50 45 40 35 30 07 08 09 10 11 12 13 14 15 MSCI Singapore Citi World Government Bond Index S&P GSCI Commodity 1.55% 0.91% -4.99% No-change line Manufacturing Services Composite

PIAS Investment Outlook for Q2 2015 Continued... US equities saw new highs in Q1 2015, benefiting from solid underlying corporate profit growth and muted inflationary pressures ( Goldilocks ). The low inflation and unemployment supported higher-than-average valuations. However, the upcoming Q1 2015 corporate earnings may post a small decline due to 50% plunge in energy sector earnings and negative translation effect from a strong US dollar. Another worry for US equities is raising interest rates. However, US equities have historically delivered positive performance following the start of Fed tightening cycles (see Chart 2). Though history is not necessarily an indicator of future performance, this fear may be overblown. Chart 2: Average Performance of S&P 500 Total Return Index following the initiation of the Fed tightening 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 2% 6% 0% 3 months after 6 months after 9 months after 12 months after Source: Barclays, Morningstar. As reported by Barclays, the start dates of the last six periods of Fed tightening were: 31 Jul. 1980, 31 Mar. 1983, 30 March 1988, 4 February 1994, 30 June 1999 and 30 June. 2004. European equities saw keen investors interest who expect European companies earnings to benefit from a weaker euro and lower oil prices. On a trade-weighted basis the euro has depreciated about 18% over Q1 2015 compared to one year ago. A Greek exit is a low probability and with Greece submitting a fresh list of economic reforms to its creditors to try to unlock financial aid, default on its loan obligations could be avoided. In the unlikely situation of a Greek exit, there should not be a permanent drawdown in European equities unless it is accompanied by a global growth scare. 7% 9% decision to postpone the second VAT hike to April 2017 and the weak oil price should support private consumption. The latest wage negotiations at large Japanese companies was positive to engineer reflation. Nation-wide local elections in April is important as lower support ratings may lead the government to delay unpopular reforms on medical and pension system. In Asia, China overall economic activity is still lackluster. However, with relaxation of credit, investment activity in the housing market could be boosted. In India, moderating inflation and a favourable budget have allowed the RBI to surprise the market with policy rate cuts. As the Modi government steps up infrastructure investment, it will boost economic growth and should translate into better corporate earnings. For Singapore, recent macro indicators have worsened with the country expected to lag the region in export recovery cycle. Coupled with negative impact from the housing market, Singapore companies should be expecting subdued earnings. However, the surprise monetary policy easing by the central bank has helped to improve sentiment slightly. In such low interest rate environment, fixed income instruments would not provide much yield. High yield bonds provide better return with the spread over treasuries. High yield spreads are expected to tighten on the back of low default rates due to faster economic growth in the US and Europe and investors continued search for yield. Also, with the US dollar strengthening, US high yield bonds will be favoured. Author Joseph Kwok, Deputy General Manager, Product & Research PIAS 06 Apr 2015 Japanese equities had a good run in Q1 2015 and returned more than 14% (in SGD terms). Japanese government s

PIAS 2015 Awards and Accolades Global Banking and Finance Review The Global Banking & Finance Review GBFR has About GBFR Awards awarded Professional Investment Advisory Services Pte The Global Banking and Finance Review awards Ltd with 2 prestigious awards! honour institutions that stand out in their particular area of expertise in the finance industry. They recognise 1. Best Financial Advisory Firm - Singapore 2015 achievement, challenge, progress and inspirational change in finance globally. 2. Best Financial Advisory Company CEO - Singapore 2015: Mr. Christopher Teo These awards once again reaffirm our premier branding within the Financial Advisory market in Singapore.

PIAS 2015 Awards and Accolades International Finance Magazine On top of winning 2 prestigious awards from Global Banking & Finance Review, The International Finance Magazine IFM has also awarded Professional Investment Advisory Services Pte Ltd with 2 honourable awards! 1. Best Adviser on Assets under Advice - Singapore 2015 2. Best New Financial Services Director - Singapore 2015: Mr. Shaun Lin About IFM Awards The IFM Awards celebrates excellence and heralds the highest standards of innovation and performance. It recognises and honours individuals and organisations in the international financial industry that contributes to raising the bar through its activities. This is a great recognition for all who have helped our firm grow into the world-class financial advisory firm that it is today. SETTING THE PROFESSIONAL STANDARD FOR FINANCIAL ADVICE IN SINGAPORE

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