Financial turmoil has swept through U.S. for quite some time. But the ones that affected Singaporean is the collapse of Lehman Brothers and the financial crisis of AIG.
Those who bought DBS High Notes 5 may loose part or all of their at least $25k investment. AIA, a subsidiary of AIG, has its policyholders anxious about their policies should the parent company collapse.
So what are the choices for these two groups of people then?
DBS customers can do nothings except to wait for DBS to inform them of any residual cash to be distributed back to them.
For AIA policyholders, they will need to stay cool and calm in this period of time. For those who really afraid of losing their money further, they can consider automatic premium loan that will help to pay for their future premium by loaning against their cash value. It comes with a 5–7% interest rate. But at least you are better off with continutation of coverage and buying time to monitor the situation. Any early termination of any insurance policies, especially those with cash value, is at your disadvantage. You can also consider withdrawing the cash value by loaning the amount of the cash value instead of surrendering policies if you really want to protect whatever cash value you have with AIA.
Let’s hope that the U.S. government’s plan to fix the root of the sub-prime problem will show some result sooner.