Unit Linked and Sharia - Life Insurance

Unit Linked Life Insurance also known as Investment Insurance, a life insurance policy that provides life insurance protection benefits as well as the opportunity to participate directly in the investment process to gain more asset value. Customer of unit linked life insurance are free to determine their own resource control in order to get better investment results and can respond in the case of inflation so that the risk are being customer's authority. The premium from customer will be used to purchase units of investment funds, in Indonesia there are 2 unit linked price method namely as single price and dual price. Single price is when the value of customer funds is the number of units multiplied with the market price of the unit. On the other hand the company will take costs by taking in front of premiums paid. Dual price consist of offer price and bid price, offer price is used by insurance companies to calculate the policy unit at the time the premium's paid, and bid price is used by insurance companies to assess the unit if customer wants to take the policy cash. In unit linked, each cost component specified in unit linked policy. Protection could be protection of life, disability, accident, and health. Customer may do top-up their policy in spite of minimum amount that company sets, investments in unit-linked insurance funds may be stock funds, bond funds, cash funds, mutual funds, and mixed funds.Type of unit-linked policy insurance could classified as single premium and regular premium, single premium  usually paid premium by the insured before the insurance protection begins, regular premium paid regularly in fixed period. When compared to traditional policies, unit linked policies more favorable in terms of transparency because customers will know the allocation of funds and receives reports every year. Also that the unit-linked customers are more flexible in its implementation, in case of a period when customers claim the insurance claim value it will be greater than traditional insurance claims because unit-linked customers receive a bonus and the investment profits. Unit linked policy benefits are potential for high growth in investment returns, high liquidity because customer can sell it anytime, and potential for higher funds accumulation.

Sharia Life Insurance is life insurance that adheres to Islamic law, introduced by Prophet Muhammad SAW. Islamic insurance in principle is mutual help between members of the association with tabaruq funds. Contract that occurs is based on legal ability obtain the rights and obligations, the principal problem is clear and according to the rules of Islam, and should be approved without coercion. In sharia, there are few point which may never violated that is Gharar,Maisir,Riba,Dzalim,and Haram

Islamic Economic System adopts a system of profit-sharing mudharabah is either profit or loss which being part of life insurance agreement for commercial and tabaruq purposes. investment portfolio are safe from haram's activities so the Moslem customer will be more relax.

yaa ayyuhaa alladziina aamanuu ittaquu allaaha waltanzhur nafsun maa qaddamat lighadin waittaquu allaha inna allaaha khabiirun bimaa ta'maluuna (Q.S Al Hasyr 18)

reference : Modul 1 Fundamental of Financial Planning, FPSB Indonesia

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Risk Management

Everything in the world is certainly at risk, the risk is something that is beyond expectation happen. Financial and business as an integral part of human activity were also at risk. This time I am going to discuss about risk management which can be define as the process by which we identify risks and control them so that we are able to achieve individual goals. Why we use the word control instead of use the word eliminate? because we cannot eliminate risk entirely, we can only attempt to keep risk within acceptable ranges of impact. The risk management process have six steps to do, and that are :

1. Develop Objectives, determine the scope of risk management process, which is one are only or at all household risk?
2. Establish Exposures, each area of household assets has its own risks and separate in to financial and non financial assets.
3. Identify Available Risk Management Tools, there are many techniques available to you in managing the overall risk of the household, such as : Avoid Risk, under the avoid risk method we could seek to eliminate exposure to risk. Reduce Risk, when we reduce risk it's not eliminate, it's lessened. Diversify, assets are diversified so that the impact of an unfavorable outcome for any one asset is reduced. Transfer Risk, it happen when we take the possibility of loss and give it to someone else
4. Match Appropriate Risk Management Tools to Exposure, in determining the appropriate overall risk management tool, a number of factors should be taken into account. Among them are the cost of alternative risk management techniques, the amount and likelihood of loss, any convenience factors, and the risk tolerance of the person
5. Implementation is taking the action step, setting an implementation plan with specific dates to accomplish tasks can help
6. Review, because time by time the risk management exposure can be change

In this part, we must also understand about real assets, financial assets, financial liabilities, and intangible liabilities. Real assets are tangible assets that the household owns, such as the house they live in, cars, furniture, jewelry, etc. Financial assets is form of the ownership asset that are typified by pieces of paper and often marketable, e.g stocks and bonds. Financial liabilities are money owed to others or we called it debt. Intangible liabilities are less quantifiable current liabilities such as potential liabilities to the third parties

We also have to discuss about insurance as part of overall risk management. Insurance is a method of transferring risk, risk is shifted to the insurance company that assumes the risk for a fee. Let's see some reasons why insurance products are not fully efficient in a financial sense :

1. Overhead Costs, insurance companies have overhead costs to maintain and grow their business, pay out claims, and earn profit.
2. Incomplete Information, a healthy purchaser of an insurance policy will bear part of the operating cost of any less healthy people in their pool of policy-holders
3. Search Costs, these are costs that the person desiring to be insured undertakes to find out which policy is best, in finance this is called as an opportunity cost.
4. Behavioral Factors, some people prefer to insure against small losses that have high probabilities of occurring and not larger losses that have low probabilities of occurring.

There are three major types of provides of insurance to individuals. Government, Property, and Personal were further subdivided into government (unemployment and social security), property (property and casualty, also personal liabilities), and personal (life, disability, long-term care, and health).

Readers, don't forget to analyzed an insurance company. They must consider to criteria of financial strength, good operating sense, service, price, and other considerations.

Insurance is commonly regarded as an expense, an appropriate designation.

Life Insurance is traditionally used to provide money that compensate for the death of a household wage earner. The price we pay for the policy include mortality charge which can be defined as the probability of dying for any individual is relatively low, investment return helps pay the mortality costs and providing the policy with extra cash to be invested, and overhead expense include the costs to market the product and maintain the policy and company profits. Life insurance is taken out to cover a need, the death of an income earner, we can view the amount needed using three different approaches. Income replacement, the amount of insurance is intended to cover the loss of income in full. Life insurance needs perform by a second approach to how much insurance to purchase. Partial replacement, insurance is costly and funding can reduce cash flow availability for other purposes such as current cost of living.

Here is type of life insurance:

• term insurance, a life insurance providing fixed coverage for a stated period of time with policy-holders premium that vary based on the possibility of death of the insured during that time-frame
• whole life insurance, life insurance providing fixed coverage for the life cycle of the insured, the premium are made possible by higher than pure mortality and insurance company overhead payment in early years which bring about a cash value saving component
• universal life insurance, cheaper than whole life insurance but if the policy projections aren't met, the extra cost may be shifted to the policy-holders through additional insurance payment.
• variable life insurance, similar to whole life insurance except that it transfers the investment function from the insurance firm to the individual
• variable universal life insurance, combines the payment flexibility of universal life with the investment flexibility of variable life

 

 

reference :  financial planning textbook chapter 10, LJ Altfest

“Playing it safe is the riskiest choice we can ever make.” Sarah Ban Breathnach

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Investment Principles

Investment are a usual word in our life, so many people talk about investment, not only in financial but also in their daily activity. But do you know what investment itself? Investment is putting money into something with the expectation of gain, that upon thorough analysis has a high degree of security for the principal amount, as well as security of return, within an expected period of time. It also the result of a decision to spend less today so that you will have enough for your future spending needs. Basically every investment possible to be risky, whether it's systematic risk or unsystematic risk, risk could be defined as the difference between actual return and expected return.

Systematic risk are known as non-diversification risk which affected by economic change, politic, social, war, inflation, and international incident that can't be eliminated by diversifying it's portfolio. the following are kinds of systematic risk :

• Market Risk, the risk cause by independent factor from any form of investment. Market risk happen when investment market deviate from it cycle
• Interest Rate Risk, risk due by interest rate fluctuations cause by the quantity of loanable funds in the overall economy and the level of fund's demand and supply
• Reinvestment Rate Risk, as the risk of decreasing market interest rates when the due day since the investment payment being received
• Purchasing Power Risk, also known as inflation risk. Inflation could cut the ability of purchasing
• Currency Risk, must be faced by investor because of fluctuation between two or more currency which affect return of investment

Unsystematic risk are also known as diversify-able risk shown the proportion of investment which could decrease by diversification. It could be affected by management capacity, labor strike, and consumer preferences. the following are kinds of unsystematic risk :

• Business Risk, risk level associated with company ability to operate and make profit. Stable income, normal competition level, and reasonable expenses will made low business risk
• Financial Risk, closely linked to the company's consolidated balance sheet. companies with large debt burdens will have a greater degree of risk as well
• Default Risk,  direct impact of financial risk as a form of the company's inability to pays debt obligations at due day
• Liquidity Risk, associate with uncertainty changing of investment to be cash within a relatively short period for something that can be predicted and in a relatively fixed price

An asset could be illiquid but high ability to sells, because marketability refers to the ability to sell assets quickly without guarantees of fair selling price. Sometime liquid asset didn't even have market. 

Affecting factors to the level of investor risk tolerance :

• Specific Goals, risk tolerance for payment are higher than excess money
• Time Frame, retirement investment could get in to high risk tolerance
• Investment Knowledge, an expert will achieve high tolerance to their-self
• Personality, risk return based on individual personality
• Current Market Conditions, bullish will stimulus investor's psychology
• Current Financial Conditions, low financial condition person will give their-self smaller risk tolerance than they who has high financial condition
• Age, the older people will less courage to be a risk-taker
• Investment Advise, people have tendency to change risk-return rate by expert

Type and Characteristic of Investment Return :

• Capital Appreciation, an investor who focused on growth investment will not really interested to get current income. they will attracting into big growth by early investment in term (short, intermediate, and long term). The longer term of investment reflect saver risk of investment.
• Income distributed into three type (dividend, interest, and rent payments),
• Settle company could doing both of them coincide

Assets Allocation divided into two method, that is Strategic Asset Allocation and Tactical Asset Allocation, Strategic Asset Allocation are allocation method that focused on objectivity long range to fixed the comparison of few asset. In other hand, Tactical Asset Allocation are method that estimate market movements to change the asset composition on portfolio, this method used market timing and sector rotation technique. Market timing involves the placement between two forms of asset based on the estimate market movements. Sector Rotation used to change the portfolio composition from industry to other sectors. At the establishment of a portfolio, we need to pay attention to the correlation between the assets forming portfolio. In order to decrease risk level of portfolio, we could combine or add negative correlation asset, that method called as diversification. Based concept of efficient frontier are combining asset forming composition that will reach maximum portfolio return.

Investment Analysis Method basically summarized into Technical Analysis and Fundamental Analysis. Technical Analysis believe that price establish in market are reflection of bullish and bearish, they who believe in this method will combine with benchmark, transaction volume, statistic indicators, and past movement patterns. Fundamental Analysis deeply evaluate to something such as interest rate, gross national product, inflation, unemployment rate, market stock, micro and macro economy, company's financial statement, etc. From the smaller point of view, fundamental analysis will evaluate financial statement position to predict stock price movement in future or profit prospect which will reach by issuers. There are two approach of fundamental analysis, that is top-down investing and bottom-up investing. Top-down investing try to comprehensive identify economic trend, they will used three basic analysis {economic conditions (business cycle, government financial policy, and fiscal policy), industrial condition, company condition (competitive company position, growth prospect, company financial position)}. Bottom-up investing toward into micro approach who will chase stock companies experiencing selling pressure in stock market.

Intrinsic Value, the basis of securities or investment instrument. A stock could be rated as undervalue if intrinsic value of stock higher than stock-market price, this condition give good prospect to be purchased and kept until market-price come in to intrinsic value. In other hand, if intrinsic value of stock is lower than stock-market price it called as overvalue and the condition possibly will have selling price pressure (market will try to bring it into intrinsic value).





reference : Modul 1 Fundamental of Financial Planning, FPSB Indonesia

It takes as much energy to wish as it does to plan - Eleanor Roosevelt

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The Importance of Shopping that is not Owned by E-commerce

Minggu lalu saat berkesempatan presentasi makalah tentang e-commerce di kelas pak Eddy, saya dan seorang teman sengaja mengangkat tentang tema "proporsi e-commerce dalam kehidupan modern". E-commerce dilihat dari huruf E besar didepan saja sudah terlihat bahwa nama ini pastilah suatu sistem yang mengedepankan teknologi internet dalam prakteknya. Nah e-commerce adalah suatu proses jual-beli produk barang atau jasa melalui media internet pastinya. Jaman sekarang segala hal sepertinya sudah didukung oleh teknologi yang diharapkan akan mempermudah kegiatan manusia. Masyarakat modern berlomba-lomba meng-upgrade gaya hidup dan kebiasaan mereka hanya agar tidak dianggap gaptek alias gagap teknologi. Yang dulu jarang nabung di bank, sekarang malah nggak pernah mau bawa uang cash agar saat sedang bertransaksi bisa terlihat "modern" dengan rajin ke ATM atau terlihat "modern" jika bertransaksi dengan cara menggesek kartu kredit / kartu debit. Sekedar memberikan informasi remeh kepada teman, yang seharusnya bisa disampaikan secara lisan, tapi sekarang malah di e-mail agar terlihat "modern". Belum lagi kelompok orang yang tidak pernah mau ketinggalan memiliki gadget terbaru, padahal toh ketika sudah memiliki juga tidak semua fitur dalam gadget tersebut akan digunakan secara optimal. Orang-orang seperti yang saya sebut tadi benar adanya loo, eksis dalam dunia "modern" dan mengikuti berbagai teknologi terbaru demi dianggap modern dan bisa diterima oleh lingkungan yang juga modern.Apakah salah jika masyarakat sekarang berlomba-lomba tampil modern demi suatu tingkatan gaya hidup tertentu? Ahh tidak, tidak salah kok, manusia kan memang makhluk sosial, jadi pola hidup bersosialisasi juga harus di upgrade.
Namun dari apa yang terjadi ini, banyak orang berpikiran bahwa dalam jangka waktu tertentu, di masa depan segala sesuatu berawalan E- akan merajai segala hal, termasuk bisnis didalamnya. Tidak hanya masyarakat awam lo yang berpikir seperti itu, banyak para ahli yang juga meyakini bahwa E- akan merevolusi sebagian besar cara masyarakat dalam berbisnis dan berbelanja. Sekarang coba saja cek di salah satu search engine terkemuka, masukkan keyword "onlineshop" maka dalam 0,25 detik dapat ditemukan kurang lebih 15.800.000 situs yang berhubungan. Coba hitung berapa banyak facebook account yang difungsikan sebagai lahan berjualan? Berapa banyak account multiply, kaskus, blog, twitter, dan sebagainya yang juga difungsikan sebagai lahan berjualan? Jutaan. Dengan kemudahan bertransaksi via internet seperti ini, masyarakat all around the world bisa membeli atau memesan apapun yang dia suka hanya dengan menekan ber-internet. Makanan? Jasa wedding planner? Baju? Sepatu? Jasa Baby Sitter? Anything! Lha kalau sudah begini jadi benar dong bahwa internet mampu merevolusi cara bisnis dan belanja?
Coba ditelaah dulu, meskipun kita bisa berbelanja apapun via Internet, tapi apa iya saat akan makan kita juga selalu mencari di Internet? apa nggak keburu laper tuhh? lalu saat kita akan membeli baju, baju di Internet memang selalu menarik, dikenakan oleh model-model cantik sehingga baju terlihat fit perfectly, tapi bukannya lebih menyenangkan datang ke department store lalu menyentuh dan mencoba sendiri baju yang kita inginkan? Menurut The New York Times, pada April tahun 2001, bahwa penetrasi bisnis online tidak akan bisa melebihi 15% dari total penjualan suatu produk, karena berbagai hal seperti ketidak-merataan bandwidth, faktor keamanan dan privasi, perlindungan konsumen, ketidak pastian, serta cara pandang dan perilaku konsumen. Hal ini disebut juga sebagai e-commerce yang berdasarkan atas perspektif konsumen.
Candace Saphiro dalam salah satu bukunya juga mengatakan bahwa yang berubah hanyalah teknologi, namun hukum perekonomian akan tetap seperti apa adanya. Prinsip-prinsip dasar seperti identifikasi proporsi nilai pelanggan serta segmentasi yang tepat, proses dan pengelolaan sumber daya yang efektif harus dikelola secara relevan. Hukum yang dimaksud adalah keadaan dan sistem kerja bisnis itu sendiri.
Menurut saya dan apa yang saya amati selama ini, ada hal-hal krusial yang menjadi pertimbangan konsumen dalam membeli suatu produk yang tidak dimiliki oleh usaha E-commerce. Masyarakat memiliki nilai yang sensitif terhadap beberapa hal dalam menentukan keputusan, sehingga sebaik apapun e-commerce dikelola proporsinya tidak akan lebih besar dari proses konvensional.  Hal penting dalam berbelanja yang tidak dimiliki e-commerce lebih kepada hal-hal yang berhubungan dengan psikologi konsumen.




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tionghoa

mungkin memang sedikit berbeda
namun kami juga cinta Indonesia
bahkan mungkin lebih dari yg kalian rasakan
lihat kegigihan ini, semangat yg tak pernah padam dalam berusaha
perbedaan bukan alasan yang tepat untuk bersikap rasis
tanpa menatap latar belakang, sadarlah bahwa setiap orang sama
diciptakan oleh Tuhan yg sama
apapun jenis kulit dan cara bicaranya