AIA Premier Academy

Rev02 dated 01/10/2013

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Rev02 dated 01/10/2013
MY TOOLS Presentation Book
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program What is Life Planning?
It is about fulfilling life needs &
meeting life dreams through
proper use of money
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Financial Protection is the
foundation of life planning.
Failure to address these needs FIRST
will create huge impact on the
overall financial plans.
We focus on planning for a solid
financial protection for our clients
first, before leading them up
addressing other needs in the
hierarchy.
Hierarchy of Life Planning Needs
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
HOME
OLD AGE NECESSITIES EDUCATION
YOURSELF
DISABILITY
CASH NOT
ENOUGH
ACCIDENT
CRITICAL
ILLNESS
DEATH
MONEY is needed to fulfill life needs & dreams
MONEY is needed to fund unexpected expenses
Financial
Freedom
Financial Protection
Good money management takes care of both, GOOD & BAD situations
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
What makes it possible for you to
fulfill life needs & dreams?
Financially
Stable Life
Money
allocated to
maintain
lifestyle
Income from
employment or
business
Food
Shelter
Clothing
Utility
Transport
Entertainment
Ability to earn
3 things that will impact
your ability to earn
income in the future?
Unemployment
Accident / Illnesses
Unexpected death or
disability
Which one will have immediate & permanent effect?
70%
to
80%
Original Plan
Financial Protection
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
The problems of
unexpected death
Imbalanced life
Sudden disruption of financial support
Living expenses
Children education fund
Debt repayment continues
Housing & car loans
Outstanding bills
Immediate cash needed
Medical & hospital expenses
Funeral expenses
Possible forced sale of assets
Sell house & car at below market price
Sell stocks at a loss
Your
dependants
Financial Protection
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
The problems of becoming disabled
Today
Our income support
our lifestyle
Tomorrow
In bed or wheelchair
Housebound
Not employed
May not be earning
Increased cost of living
Contingency fund that can
provide continuous flow of
income at the precise
moment we need it
Financial Protection
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
The problems of becoming disabled
Tomorrow
Where can we get the
contingency fund
from?
Savings &
Investments
Borrowing
Sell assets
Life Insurance
funds
Financial Protection
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
The problems of becoming critically ill
Main Killer
Diseases in the
World Today
World Health Organization
Heart Disease
Cancer
Stroke
36%
21%
9%
More than
50%of
critical illnesses
strike at the prime
of our productive
life age 30 to 45
Financial Protection
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
The problems of becoming critically ill
Rising cost of
medical treatment
in Malaysia
Various private hospitals in
the Klang Valley
Liver
transplant
RM 300,000
Cancer
RM 140,000
Bone Marrow
transplant
RM 100,000
Heart
Surgery
RM 50,000
Kidney
transplant
RM 60,000
Major
accidents
RM 30,000
Removal of
Appendix
RM 8000
Dengue
Fever
RM5000
Average Critical Illness claim
is less than RM 50,000
- Malaysia Claim Data 2010
Financial Protection
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Total income
RM 5500
Minus total expenses
Food
Utility Bills
Loan installments
Entertainment
Savings
Etc
RM 5300
RM 200
Critical illness medical treatment
may cost easily between RM 30,000
to RM 50,000 initially.
With a surplus of RM 200 a
month, how long it takes for him
to create a critical illness fund of
RM 50,000?
The problems of becoming critically ill
Financial Protection
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
The problems of becoming critically ill
Retirement
Education
Others
Recurring post-
hospitalization
treatment
Savings
Hospitalization
& illness
treatment
Savings may have to be
stopped due to additional cash
needs
Goals for a comfortable
retirement & sufficient fund for
children education may have to
be compromised
Financial Protection
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
How much is your money worth in the future?
Now
Cost of 3 meals a day
20 years
later
RM 20
RM 64
Now
Expenses for a year
20 years
later
RM 48,000
RM 153,942
Assuming the inflation rate is 6%
Due to inflation, your money value will not be the same
Financial Accumulation
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Old age
The average vacation lasts for 2 weeks
The average retirement lasts nearly 20 years
Which do you spend more time planning?
Financial Accumulation
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Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Can you afford to retire now?
3out of 100are financially successful
at their retirement age..
The rest..
Unable to maintain standard of living
Forced to work
Dependant on children
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Living costs & inflation
RM 500,000 in your EPF
at retirement may have
the purchasing power of
RM 145,053 in 20 years
Inflation rate is 6% in
urban areas
3 meals a day at RM 20
now may cost RM 64 in 20
years
Medical inflation is 15%
each year
Retirement can be expensive
Many of our major income needs to continue
..and additional expenses occur
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
The power of compounding interest
Age 21 30
RM 1000
No further savings
55
RM 2000
Total
contributions
Return @ 12%
average per
year
RM 10,000
RM 50,000
RM
334,129
RM
298,668
Profit
33
times
5 times
The earlier we start, the less we need to save & the more we will have
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Our precious gift
Your Child
Most precious gift in our life
The best gift of love we can give for them
Education
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
How does education impact income?
Comparison of average starting pay of school leavers, skilled personnel & graduates
Lower Secondary
School
RM 700 to RM 800
a month
PMR SPM
University
Professional
Qualification
Vocational
Course
5 years of Secondary
School
RM 1000 to RM 1200
a month
2 to 4 years of Higher
Education
RM 1700 to RM 2200
a month
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Cost of local universities programs
Universities Tuition Fees (RM) Living Costs (RM) Total Costs (RM)
Local Public
Universities
4,890 19,500 24,390
Local Private
Universities
42,520 26,000 68,520
Government
Sponsored College
31,890 19,500 51,390
Note:
Local Public Universities & Government Sponsored College, tuition fees are based on average
duration of 3 years.
Local Private Universities, tuition fees are based on average duration of 4 years.
Source:
Education Guide Malaysia, 4
th
Edition A guide for Malaysian students, Survey of committee of vice-chancellors, Principal of the universities of UK, the internet.
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Cost of twinning programs
Universities Twinning Program
(RM)
Australia 146,288
Canada 128,029
New Zealand 137,820
USA 265,838
United Kingdom 262,485
Note:
Inclusive of tuition fees & expenses. Based on the average duration of 3 years.
Living expenses is calculated only for the last 1 years, as the child will receive his first
years of tertiary education locally.
Source:
Education Guide Malaysia, 4
th
Edition A guide for Malaysian students, Survey of committee of vice-chancellors, Principal of the universities of UK, the internet.
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program
Cost of overseas universities
Source:
Magazine Further Study Intelligence: 2001
Country Estimated Cost on Annual Basis Length of Study
Singapore
Art / Science: RM 12,000
Medicine: RM 37,000
Polytechnic: RM 4,300
Living Expenses: RM 15,000
Degree: 3 years
Honors Degree: 4 years
Diploma in Polytechnic: 3 years
Australia
Art: RM 19,000
Science: RM 34,000
Living Expenses: RM 22,800
Degree: 3 years
Honors Degree: 4 years
Professional Certificate: 2 years
New Zealand
Art: RM 14,400 RM 22,200
Science: RM 24,000
Living Expenses: RM 15,000
Degree: 3 years
United
Kingdom
Art: RM 33,000
Science: RM 44,000
Living Expenses: RM 26,500 RM 42,400
Degree: 3 years
HND: 2 years
Financial Accumulation
AIA confidential and proprietary information. Not for distribution.
Rev02 dated 01/10/2013
AIA Premier Academy (APAc)
SEED Program Achieving Financial Freedom
Help people
plan for their
financial
freedom
The purpose of financial
needs analysis