A motorist left the workshop to make a claima against NTUC Income. The workshop inflated the bill and submitted the claim through a lawyer. We disputed the claim.
The motorist sent an e-mail to me directly. He complained that we were not fair in handling this claim and labelled it as "Unfair Insurance Practice".
Here is my reply:
-----------------------------------
Dear
It appears that you are insured with another insurance company and you wish to make a third party claim against NTUC Income.
Under our fair practice, you should contact us directly and allow us to settle the claim with you, Apparently, you did not.
You asked the workshop to handle the claim for you. The workshop probably submitted a claim that is much higher than the cost of
repair that can be done by our workshop.
There is also the question about liability. Is the truck insured by NTUC Income liable for the accident? This has to be
established.
I want you to realise that you have caused a lot of problem to us by your unfair approach. But I realise that you were not aware
about it.
I will ask xxxxxxx to look into this case, and see if he can help to expediate the matter. I hope that you agree with my
view.
Tan Kin Lian
CEO, NTUC Income
Monday, February 27, 2006
Take a cheaper medical plan
QUESTION
I attended A talk on medical insurance given by your manager. I was told that the rider (to cover the balance of the bill) has to be paid by cash and the premium will increase as I grow older.
Mr Tan, is there a limit, that is a certain period of age that can stop paying the premium for the rider. Or we must pay until we die. That means a lot of money to pay for the rider.
REPLY
Briefly, you can stop the rider at any time, so that you do not need to pay the increasing premium.
My advice is for you to take a lower cost plan, so that there is sufficient money to pay for the basic plan and the rider for as
long as possible.
I attended A talk on medical insurance given by your manager. I was told that the rider (to cover the balance of the bill) has to be paid by cash and the premium will increase as I grow older.
Mr Tan, is there a limit, that is a certain period of age that can stop paying the premium for the rider. Or we must pay until we die. That means a lot of money to pay for the rider.
REPLY
Briefly, you can stop the rider at any time, so that you do not need to pay the increasing premium.
My advice is for you to take a lower cost plan, so that there is sufficient money to pay for the basic plan and the rider for as
long as possible.
Sunday, February 26, 2006
Principle of profit sharing
QUESTION FROM JOURNALIST
Why do you need to charge higher premiums for takaful-based motor insurance?
ANSWER:
In a conventional product (ie profit not shared with policyholders), the shareholders take the entire risk. All profit or loss is borne entirely by the shareholders.
In a profit-sharing product, such as takaful insurance, a major portion of the profits goes to the participants. It is necessary to increase the premium rate by about 10% to 20%, to reduce the risk of loss (in case of bad claims). As the shareholders take only a modest portion of the profit, it is fair that they should bear a smaller risk of loss.
It is likely that the rebate (or share of profit) will be more than the additional premium, so that the net cost (after the rebate) will be attractive to the policyholder.
The profit sharing will also encourage the policyholders to work in cooperation to minimise the loss, as they can benefit from the share of profit. This will be good for the policyholders in the long run.
Why do you need to charge higher premiums for takaful-based motor insurance?
ANSWER:
In a conventional product (ie profit not shared with policyholders), the shareholders take the entire risk. All profit or loss is borne entirely by the shareholders.
In a profit-sharing product, such as takaful insurance, a major portion of the profits goes to the participants. It is necessary to increase the premium rate by about 10% to 20%, to reduce the risk of loss (in case of bad claims). As the shareholders take only a modest portion of the profit, it is fair that they should bear a smaller risk of loss.
It is likely that the rebate (or share of profit) will be more than the additional premium, so that the net cost (after the rebate) will be attractive to the policyholder.
The profit sharing will also encourage the policyholders to work in cooperation to minimise the loss, as they can benefit from the share of profit. This will be good for the policyholders in the long run.
No extra charge for unlimited coverage
Last year, an insurer raises the lifetime limit on its Shield plan to $5 million and charges premiums that are 10% to 50% higher than a similar plan from NTUC Income (ie Incomeshield).
NTUC Income has recently removed the limit on lifetime claims. The policyholder can claim beyond $5 million a year.
We did not change our premium rates. Our premiums are much lower than the other Shield plan, and yet our coverage is better.
NTUC Income has recently removed the limit on lifetime claims. The policyholder can claim beyond $5 million a year.
We did not change our premium rates. Our premiums are much lower than the other Shield plan, and yet our coverage is better.
Saturday, February 25, 2006
Agents still selling critical year
Some agents are still selling the "critical year" concept. They tell the customer that after paying for 10 to 12 years, they do not have to pay any more premium, and that this is guaranteed.
The agent ask the customer to read 50 pages of policy illustration that are written in vague language.
Here is my advice to the customer.
Write to the insurance company. Ask them to confirm the guarantee in writing. Ask them to specify that this guarantee does not depend on the future bonus rates and investment return.
You will get a different answer from the company.
Here is a better advice. Contact NTUC Income. We will give you our Ideal plan with a decreasing term rider. It is a better plan. It offers you the coverage and a better return.
The agent ask the customer to read 50 pages of policy illustration that are written in vague language.
Here is my advice to the customer.
Write to the insurance company. Ask them to confirm the guarantee in writing. Ask them to specify that this guarantee does not depend on the future bonus rates and investment return.
You will get a different answer from the company.
Here is a better advice. Contact NTUC Income. We will give you our Ideal plan with a decreasing term rider. It is a better plan. It offers you the coverage and a better return.
Friday, February 24, 2006
Insurance should be based on sharing, fairness and transparency
Takaful insurance is operated on the Islamic principles of sharing, fairness and transparency.
In my view, all insurance transactions should be operated on these principles. As a cooperative society, NTUC Income has been observing these principles for the past 36 years.
When a person buys insurance, this person is joining an insurance pool. The premium should be calculated on the total claim amount and the expenses of operating the insurance pool, and shared fairly among the participants.
The insurance operator has the responsibility to manage the insurance pool well, pay the legitimate claims, keep the expenses low and make a fair margin. In this way, the premium can be kept low for all the insured participants.
The insurance operator should not charge a high premium and make excessive profit for shareholders. This will be unfair to the participants.
Sometimes, the insurance can produce a higher profit than expected. This could arise if the claim experience is favourable, or if the investments earn a better return.
Under takaful principles, a fair portion of the profits should be shared with the insured participants. The proportion to be shared should be fair and disclosed to the participants at the start.
Similarly, if the insurance pool pays more claim than expected, it is fair that they pay a higher premium and do not expect the shareholders to bear the loss.
It is possible for takaful principles to operate on general insurance, such as motor insurance and personal accident insurance.
Under this system, the premium charged to the participant has to be slightly higher than the market rates, maybe 10 to 20 percent higher.
The insurance operator should continue to manage the claims and expenses well and produce a profit. A fair portion of the profits should be shared with the insured participants. If this profit sharing is more than 10 or 20 percent of premium, the net cost to the insured participant will actually be lower under takaful insurance.
The insured participants can help to lower the cost in the following ways:
- avoid making excessive claims, eg motor repairs or health claims
- cooperate with the insurance operator to minimise the claims
- discourage other participants from making excessive claims
- reduce the admistrative cost by staying with the insurance operator for many years
Through this cooperative effort, the total cost can be reduced. This will be good for the insurance participants (ie the policyholders) and the insurance operator (ie the insurance company). It is win-win.
NTUC Income will be studying how to apply these principles to general insurance. We may introduce this profit sharing for certain products, such as personal accident insurance and motor insurance over the next 6 to 12 months.
We need to educate the public about the principles of sharing of risks and profits, and the principle of working together in cooperation.
We will offer a choice to our policyholders:
- pay a market rate based on a commercial contract
- pay a slightly higher premium rate and enjoy a share of profits
The profit sharing concept will be made available to Muslims and non-Muslims. Muslims like this concept as it it based on Syariah principles. Non-Muslims may like it as well.
In my view, all insurance transactions should be operated on these principles. As a cooperative society, NTUC Income has been observing these principles for the past 36 years.
When a person buys insurance, this person is joining an insurance pool. The premium should be calculated on the total claim amount and the expenses of operating the insurance pool, and shared fairly among the participants.
The insurance operator has the responsibility to manage the insurance pool well, pay the legitimate claims, keep the expenses low and make a fair margin. In this way, the premium can be kept low for all the insured participants.
The insurance operator should not charge a high premium and make excessive profit for shareholders. This will be unfair to the participants.
Sometimes, the insurance can produce a higher profit than expected. This could arise if the claim experience is favourable, or if the investments earn a better return.
Under takaful principles, a fair portion of the profits should be shared with the insured participants. The proportion to be shared should be fair and disclosed to the participants at the start.
Similarly, if the insurance pool pays more claim than expected, it is fair that they pay a higher premium and do not expect the shareholders to bear the loss.
It is possible for takaful principles to operate on general insurance, such as motor insurance and personal accident insurance.
Under this system, the premium charged to the participant has to be slightly higher than the market rates, maybe 10 to 20 percent higher.
The insurance operator should continue to manage the claims and expenses well and produce a profit. A fair portion of the profits should be shared with the insured participants. If this profit sharing is more than 10 or 20 percent of premium, the net cost to the insured participant will actually be lower under takaful insurance.
The insured participants can help to lower the cost in the following ways:
- avoid making excessive claims, eg motor repairs or health claims
- cooperate with the insurance operator to minimise the claims
- discourage other participants from making excessive claims
- reduce the admistrative cost by staying with the insurance operator for many years
Through this cooperative effort, the total cost can be reduced. This will be good for the insurance participants (ie the policyholders) and the insurance operator (ie the insurance company). It is win-win.
NTUC Income will be studying how to apply these principles to general insurance. We may introduce this profit sharing for certain products, such as personal accident insurance and motor insurance over the next 6 to 12 months.
We need to educate the public about the principles of sharing of risks and profits, and the principle of working together in cooperation.
We will offer a choice to our policyholders:
- pay a market rate based on a commercial contract
- pay a slightly higher premium rate and enjoy a share of profits
The profit sharing concept will be made available to Muslims and non-Muslims. Muslims like this concept as it it based on Syariah principles. Non-Muslims may like it as well.
Loss of earnings lead to less babies
The Institue of Public POlicy Research in the UK pubished a report. Many families delay having children, because women prefer to work and to earn an income. The cost of raising a child, ie the loss of earnings, is too high.
When they decide to have a baby later, it is too late. The women are less fertile. It was difficult to have a child at an older age.
This problem is faced in Singapore and in other countries. The problem in Singapore is probably worse.
What is the solution?
I have a radical proposal.
- give the mother $500 a child each month, until the child is 12 years old
- this is limited to 2 children per mother
- give free or subsidised further education to mother with 2 children
The cost of raising 2 children in each family will be borne by society. This gives an attractive option for some mothers to raise a family first, before they embark on a working career later.
I think that some countries, eg in Scandinavia, has adopted a bold approach and seem to be more successful in encouraging their people to have more children.
When they decide to have a baby later, it is too late. The women are less fertile. It was difficult to have a child at an older age.
This problem is faced in Singapore and in other countries. The problem in Singapore is probably worse.
What is the solution?
I have a radical proposal.
- give the mother $500 a child each month, until the child is 12 years old
- this is limited to 2 children per mother
- give free or subsidised further education to mother with 2 children
The cost of raising 2 children in each family will be borne by society. This gives an attractive option for some mothers to raise a family first, before they embark on a working career later.
I think that some countries, eg in Scandinavia, has adopted a bold approach and seem to be more successful in encouraging their people to have more children.
Thursday, February 23, 2006
Assessment on the Spot
NTUC Income insures 290,000 vehicles. An average of 100 vehicles are involved in accidents daily.
Under the normal practice, the policyholder calls our hotline and ask for assistance. The policyholder is usually required to drive the vehicle to an accident reporting center (also called an Idac center) for the vehicle to be assessed. If the vehicle is badly damaged and cannot be driven, we will arrange for a tow truck to tow the vehicle to an Idac center.
Since 15 December 2005, NTUC Income has introduced another service. This is called "assessment on the spot". It provides for the mobile assessor to appear at the scene of the accident and to carry out an on-the-spot assessment.
The assessor takes about 15 minutes to reach the scene of the accident. The assessor assists our the policyholder and third party driver to assesses the damages at the scene of the accident. The assessor also helps them to complete the Singapore Accident Statement (SAS) forms, and to take photographs of the damaged vehicles and the scene of accident.
If any person is injured, the assessor calls an ambulance and the police. The vehicles will be towed to an IDAC center, if it cannot be driven. All documents and particulars will be forwarded to NTUC Income for further assistance or assessment of claim.
A total of 45 policyholders have used this service during the past 80 days. Based on a survey after the event, all the policyholders found this service to be useful.
Tan Kin Lian
CEO, NTUC Income
Under the normal practice, the policyholder calls our hotline and ask for assistance. The policyholder is usually required to drive the vehicle to an accident reporting center (also called an Idac center) for the vehicle to be assessed. If the vehicle is badly damaged and cannot be driven, we will arrange for a tow truck to tow the vehicle to an Idac center.
Since 15 December 2005, NTUC Income has introduced another service. This is called "assessment on the spot". It provides for the mobile assessor to appear at the scene of the accident and to carry out an on-the-spot assessment.
The assessor takes about 15 minutes to reach the scene of the accident. The assessor assists our the policyholder and third party driver to assesses the damages at the scene of the accident. The assessor also helps them to complete the Singapore Accident Statement (SAS) forms, and to take photographs of the damaged vehicles and the scene of accident.
If any person is injured, the assessor calls an ambulance and the police. The vehicles will be towed to an IDAC center, if it cannot be driven. All documents and particulars will be forwarded to NTUC Income for further assistance or assessment of claim.
A total of 45 policyholders have used this service during the past 80 days. Based on a survey after the event, all the policyholders found this service to be useful.
Tan Kin Lian
CEO, NTUC Income
Tuesday, February 21, 2006
Dutch researcher: Innovative use of MMS
QUESTION:
I am a researcher for Endemol, a Dutch-based TV-production company.
I am currently working on a presentation on mobile marketing and mobile applications in the financial services industry. I just found out about NTUC's innovative MMS claim service which I think is very interesting!
Furthermore, when researching this service I found your blog, which I think is a very brave initiative! (I wouldn't know if a CEO of a Dutch insurance company would have the courage to do this, unfortunately)
I would like to highlight the NTUC MMS service in my presentation and would like to ask for some more information on the service. More specifically I have the following questions:
(deleted)
- Does NTUC have plans to launch other service-enhancing applications using mobile phones in the future.
REPLY:
Dear
We are delighted to be mentioned in your presentation. You may use our example.
We are now actively using SMS to send messages and reminders to our customers. It is working well.
Tan Kin Lian
CEO, NTUC Income
I am a researcher for Endemol, a Dutch-based TV-production company.
I am currently working on a presentation on mobile marketing and mobile applications in the financial services industry. I just found out about NTUC's innovative MMS claim service which I think is very interesting!
Furthermore, when researching this service I found your blog, which I think is a very brave initiative! (I wouldn't know if a CEO of a Dutch insurance company would have the courage to do this, unfortunately)
I would like to highlight the NTUC MMS service in my presentation and would like to ask for some more information on the service. More specifically I have the following questions:
(deleted)
- Does NTUC have plans to launch other service-enhancing applications using mobile phones in the future.
REPLY:
Dear
We are delighted to be mentioned in your presentation. You may use our example.
We are now actively using SMS to send messages and reminders to our customers. It is working well.
Tan Kin Lian
CEO, NTUC Income
Monday, February 20, 2006
Make retirement housing more affordable
QUESTION FROM JOURNALIST:
Can you comment on the 30-year land for retirement housing? Does this make it more viable?
REPLY BY TAN KIN LIAN:
I prefer a special arrangement for the land to be tendered only for retirement housing. This will reduce the competition for the land from other type of use. It will bring down the price to a more affordable level for retirees.
It may be costly to buy a project for 30 years and to tear it down. The building cost has to be amortised over a short period.
It is better to allow for a longer period to amortised the building cost, for example 60 or 99 years.
The retirement housing can be owned by a cooperative, which can rent out to the retirees for a lifetime or a shorter period. The housing can be rented out to new tenants, after the retiree has passed away or moved out.
A retirement housing has the following advantages to the retirees:
- it is built to suit their special needs
- they have friends of similar ages that can spend time together
- they can go to the community to mix with younger people
I hope that my suggestions will give another perspective to reduce the cost to the retirees.
Can you comment on the 30-year land for retirement housing? Does this make it more viable?
REPLY BY TAN KIN LIAN:
I prefer a special arrangement for the land to be tendered only for retirement housing. This will reduce the competition for the land from other type of use. It will bring down the price to a more affordable level for retirees.
It may be costly to buy a project for 30 years and to tear it down. The building cost has to be amortised over a short period.
It is better to allow for a longer period to amortised the building cost, for example 60 or 99 years.
The retirement housing can be owned by a cooperative, which can rent out to the retirees for a lifetime or a shorter period. The housing can be rented out to new tenants, after the retiree has passed away or moved out.
A retirement housing has the following advantages to the retirees:
- it is built to suit their special needs
- they have friends of similar ages that can spend time together
- they can go to the community to mix with younger people
I hope that my suggestions will give another perspective to reduce the cost to the retirees.
Reply: there is no catch in the top-up rider
20 February 2006
Editor
Forum
The Straits Times
I refer to the article, "Incomeshield removes limits on amount of lifetime claims", by Lorna Tan (Straits Times, 15 February 2006).
In the article, Mr Patrick Lim of Promiseland Independent was quoted as saying "Incomeshield's new top-up rider came with a catch. Unless it is an emergency case, policyholders are required to seek Income's approval for the treatment, by giving the insurer four days' notice prior to incurring the expense."
I wish to give our perspective of this feature.
NTUC Income recognises the concerns of some policyholders that the current limits are inadequate for major illnesses. The top up rider will pay for the additional expenses. In most cases, the policyholder can claim under the basic plan for the ordinary expenses, before hitting the current limit. The need for top-up expenses applies only to a small percentage of cases.
Our approach is to ensure that the larger medical expenses are kept at a reasonable level. If necessary, we will ask our own doctor to give a second opinion on the proposed treatment. This will be beneficial to the policyholder as well.
We aim aim to avoid excessive billing under a blanket "as charged" plan. We will manage the claims effectively and keep the premium affordable for our policyholders. This is important, as premium rates are expected to increase significantly when the policyholder gets older.
We have 800,000 people insured under our Incomeshield plan. As a cooperative society, our aim is to look after their best interest. We believe that a top up rider will pre-approval condition will serve them best in the long run.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Editor
Forum
The Straits Times
I refer to the article, "Incomeshield removes limits on amount of lifetime claims", by Lorna Tan (Straits Times, 15 February 2006).
In the article, Mr Patrick Lim of Promiseland Independent was quoted as saying "Incomeshield's new top-up rider came with a catch. Unless it is an emergency case, policyholders are required to seek Income's approval for the treatment, by giving the insurer four days' notice prior to incurring the expense."
I wish to give our perspective of this feature.
NTUC Income recognises the concerns of some policyholders that the current limits are inadequate for major illnesses. The top up rider will pay for the additional expenses. In most cases, the policyholder can claim under the basic plan for the ordinary expenses, before hitting the current limit. The need for top-up expenses applies only to a small percentage of cases.
Our approach is to ensure that the larger medical expenses are kept at a reasonable level. If necessary, we will ask our own doctor to give a second opinion on the proposed treatment. This will be beneficial to the policyholder as well.
We aim aim to avoid excessive billing under a blanket "as charged" plan. We will manage the claims effectively and keep the premium affordable for our policyholders. This is important, as premium rates are expected to increase significantly when the policyholder gets older.
We have 800,000 people insured under our Incomeshield plan. As a cooperative society, our aim is to look after their best interest. We believe that a top up rider will pre-approval condition will serve them best in the long run.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Saturday, February 18, 2006
Switch back to Incomeshield
To be sent to policyholders who switched away from Incomeshield recently.
22 February 2006
Incomeshield
You were previously insured under Incomeshield, but has transfered your insurance to another Shield plan. I wish to ask you to re-consider your decision.
Here are some key advantages of Incomeshield:
- The premium rates are lower than comparable plans
- It provides adequate coverage to meet most medical treatments
- You can buy a rider to cover the deductible and co-insurance
- You can buy a top-up rider to cover the major illness
- You enjoy unlimited lifetime coverage
- The insurance is guaranteed to be renewable for a liftime, beyond age 80 or 85.
Here is a brief comparison of the total premium payable over 40 years (from age 41 to 80 years) between Incomeshield and similar plans offered by other insurers:
The coverages provided by the various plans are quite similar, except for some diffferences in the limits. The difference in premium can be as much as 60%. You can save up to $12,000 over 40 years, by insuring with NTUC Income. As the premium rates are expected to increase further in future years, it is important to choose an affordable plan.
If you wish to switch back to Incomeshield, you can call 6332-1133. We will arrange with CPF for you to switch bank and to get a refund of the proportionate amount paid to the other plan. You can also add the top-up rider to cover major illness.
If you wish to attend a dialogue session, you can call 6877-3366.
Tan Kin Lian
Chief Executive Officer
22 February 2006
Incomeshield
You were previously insured under Incomeshield, but has transfered your insurance to another Shield plan. I wish to ask you to re-consider your decision.
Here are some key advantages of Incomeshield:
- The premium rates are lower than comparable plans
- It provides adequate coverage to meet most medical treatments
- You can buy a rider to cover the deductible and co-insurance
- You can buy a top-up rider to cover the major illness
- You enjoy unlimited lifetime coverage
- The insurance is guaranteed to be renewable for a liftime, beyond age 80 or 85.
Here is a brief comparison of the total premium payable over 40 years (from age 41 to 80 years) between Incomeshield and similar plans offered by other insurers:
Plan NTUC Income Other insurers
A $30,000 $34,000 to $42,000
B $18,000 $22,000 to $28,000
The coverages provided by the various plans are quite similar, except for some diffferences in the limits. The difference in premium can be as much as 60%. You can save up to $12,000 over 40 years, by insuring with NTUC Income. As the premium rates are expected to increase further in future years, it is important to choose an affordable plan.
If you wish to switch back to Incomeshield, you can call 6332-1133. We will arrange with CPF for you to switch bank and to get a refund of the proportionate amount paid to the other plan. You can also add the top-up rider to cover major illness.
If you wish to attend a dialogue session, you can call 6877-3366.
Tan Kin Lian
Chief Executive Officer
Set up a trust policy
Here is another idea of how a wealthy person can reduce estate duty:
- contribute a certain sum for each beneficiary in a trust policy now
- invest this sum in our combined fund or annuity
- allow the beneficiary to draw out a monthly sum from a certain birthday
- restrict the right of the beneficiary to draw out the principal sum
This gift is subject to estate duty, if the benefactor dies within 5 years of the transfer. This liability can be covered by a 5 year term policy.
RATIONALE: It is better for a wealthy person to transfer part of your wealth to your beneficiary now. If you do not want them to use the money immediately, you can set up a trust policy to ensure that the fund is withdrawn in instalments.
- contribute a certain sum for each beneficiary in a trust policy now
- invest this sum in our combined fund or annuity
- allow the beneficiary to draw out a monthly sum from a certain birthday
- restrict the right of the beneficiary to draw out the principal sum
This gift is subject to estate duty, if the benefactor dies within 5 years of the transfer. This liability can be covered by a 5 year term policy.
RATIONALE: It is better for a wealthy person to transfer part of your wealth to your beneficiary now. If you do not want them to use the money immediately, you can set up a trust policy to ensure that the fund is withdrawn in instalments.
Use section 73 to reduce estate duty
Under section 73 of the Conveyancing and Law of Property Act, a policyholder can take up a life assurance policy and pledge it for the benefit of specified beneficiaries. Each policy will form a separate estate.
Here is an example of the use of Section 73 to save on estate duty
When a wealthy person passes away, the estate has to pay estate duty as follows:
- first $600,000 if free of tax
- next $x million will be taxed at 5%
- any excess will be taxed at 10%
The wealthy person can reduce the estate duty as follows:
- take a separate policy under section 73 for each beneficiary
- each policy is treated as a separate estate.
- the tax impact is lower.
Here is an example of the use of Section 73 to save on estate duty
When a wealthy person passes away, the estate has to pay estate duty as follows:
- first $600,000 if free of tax
- next $x million will be taxed at 5%
- any excess will be taxed at 10%
The wealthy person can reduce the estate duty as follows:
- take a separate policy under section 73 for each beneficiary
- each policy is treated as a separate estate.
- the tax impact is lower.
Get a better medical insurance plan
Incomeshield offers you these attractive features!
* Unlimited Lifetime Coverage: Similar plans limit the amount that you can claim for a lifetime. Incomeshield covers has removed the lifetime limit.
* Guaranteed Renewability: Incomeshield guarantees that your cover will be renewable for a lifetime, beyond age 80, beyond age 85.
* Afforable premium: The premium payable under Incomeshield are 10% to 35% lower than similar plans charged by other insurers for similar coverage. As the premium increases sharply when you grow older, it is important for you to buy an affordable plan.
* Flexible Deductible: Incomeshield allows you to be treated in a lower class ward and to enjoy a lower deductible.
* Test and follow-up expenses: If your daily limit is fully utilised, the balance can be used to cover specialist consultation, examination and laboratory tests and post hospitalisation treatment.
* Riders: You can buy riders to cover the deductible and co-insurance, and to provide additional payments for critical illness
* No claim discount: If you have been insured for more than 3 years and have not made any claim in the preceding 12 months, you will enjoy a 10% discount on your premium (subject to review).
* Unlimited Lifetime Coverage: Similar plans limit the amount that you can claim for a lifetime. Incomeshield covers has removed the lifetime limit.
* Guaranteed Renewability: Incomeshield guarantees that your cover will be renewable for a lifetime, beyond age 80, beyond age 85.
* Afforable premium: The premium payable under Incomeshield are 10% to 35% lower than similar plans charged by other insurers for similar coverage. As the premium increases sharply when you grow older, it is important for you to buy an affordable plan.
* Flexible Deductible: Incomeshield allows you to be treated in a lower class ward and to enjoy a lower deductible.
* Test and follow-up expenses: If your daily limit is fully utilised, the balance can be used to cover specialist consultation, examination and laboratory tests and post hospitalisation treatment.
* Riders: You can buy riders to cover the deductible and co-insurance, and to provide additional payments for critical illness
* No claim discount: If you have been insured for more than 3 years and have not made any claim in the preceding 12 months, you will enjoy a 10% discount on your premium (subject to review).
Friday, February 17, 2006
Good news: Lower cost for health and motor
In the budget statement, the Minister of Finance announced that insurance companies can recover the GST on payments for repairs for passenger cars and health care bills.
This will mean that the cost of health and motor insurance will reduced by 3% to 4%.
This request for recovery of GST was submitted by NTUC Income. Anyway, all policyholders will benefit from this change in GST, regardless of who they insure with.
NTUC Income has already reduced our motor premiums by 5% from 1 January 2006. For health insurance, we will not increase the premium for 2006 and 2007, in spite of rising bills.
The saving in cost will help us to delay any future increase in premium for a longer period.
This will mean that the cost of health and motor insurance will reduced by 3% to 4%.
This request for recovery of GST was submitted by NTUC Income. Anyway, all policyholders will benefit from this change in GST, regardless of who they insure with.
NTUC Income has already reduced our motor premiums by 5% from 1 January 2006. For health insurance, we will not increase the premium for 2006 and 2007, in spite of rising bills.
The saving in cost will help us to delay any future increase in premium for a longer period.
Thursday, February 16, 2006
Top up rider for Incomeshield
NTUC Income has announced our top-up rider for Incomeshield. It has been generally well received. Many policyholders welcome this rider.
A few members of the public have raised these questions:
1. Is NTUC Income contradicting itself by first denouncing as-charged plans and subsequently introducing it?
Reply: We recognise the concern of some policyholders that the current limits under Incomeshield are inadquate for the major illness. The top up rider will cover the more expensive treatments. We do not cover "as charged" as there are some controls against inflated bills.
2. Definition of "emergency"
REPLY: An "emergency" is a situation where it is not possible for the policyholder to contact us to get prior approval.
3. Whether its practical to wait for prior approval being being admitted to hospital.
Reply: In most cases, the policyholder can get prior approval for the major illness that are likely to exceed the limits under the basic plan. It is a good idea to have a second opinion before committing to a major treatment. Our doctor can provide the second opinion.
4. Can NTUC Income spell out the conditions more transparently? If not, I do not trust the conditions.
Reply: We have spelled out the principles quite transparently. In the actual implementation, we have to be practical and flexible. We are a cooperative, and will do our best for our policyholders.
Unlike other insurers, we do not aim to make a lot of profit from medical insurance. It is better for consumers to insure with us, as we aim to keep the cost affordable for them.
A few members of the public have raised these questions:
1. Is NTUC Income contradicting itself by first denouncing as-charged plans and subsequently introducing it?
Reply: We recognise the concern of some policyholders that the current limits under Incomeshield are inadquate for the major illness. The top up rider will cover the more expensive treatments. We do not cover "as charged" as there are some controls against inflated bills.
2. Definition of "emergency"
REPLY: An "emergency" is a situation where it is not possible for the policyholder to contact us to get prior approval.
3. Whether its practical to wait for prior approval being being admitted to hospital.
Reply: In most cases, the policyholder can get prior approval for the major illness that are likely to exceed the limits under the basic plan. It is a good idea to have a second opinion before committing to a major treatment. Our doctor can provide the second opinion.
4. Can NTUC Income spell out the conditions more transparently? If not, I do not trust the conditions.
Reply: We have spelled out the principles quite transparently. In the actual implementation, we have to be practical and flexible. We are a cooperative, and will do our best for our policyholders.
Unlike other insurers, we do not aim to make a lot of profit from medical insurance. It is better for consumers to insure with us, as we aim to keep the cost affordable for them.
Wednesday, February 15, 2006
Parallel imports - pay less for your new car
NTUC Income is working with parallel importers to offer popular models of cars at a significant discount from the normal dealer prices. NTUC Income will provide the warranty for 3 years.
Tentatively, the savings can be 5% to 10%. More details will be announced later in the educational website:
www.KnowYourInsurance.com.sg
Tentatively, the savings can be 5% to 10%. More details will be announced later in the educational website:
www.KnowYourInsurance.com.sg
Monday, February 13, 2006
Combined funds earned 8.2% in 2005
Dear Policyholder,
Investment Linked Funds
Thank you for investing in our investment linked funds. I have good news for you again.
Our investment funds continued to perform well in 2005. The average weighted return was 6.8%, after deduction of fees. Total fund under management has grown to more than $5,000 million.
Our combined funds performed better. The average weighted return was 8.2%. It has also outperformed its benchmark over the past 3 years.
Our funds performed well, due to the expertise of our fund managers and our commitment to bring you best value.
In a recent survey, 88% of our policyholders who invested in the combined fund are happy with the returns. More than 50% are interested to increase their investment.
To find out more about our funds, I invite you to my investment seminars held once every two weeks. You can visit our website www.income.coop or call 6877 3366.
Tan Kin Lian
Chief Executive Officer
Investment Linked Funds
Thank you for investing in our investment linked funds. I have good news for you again.
Our investment funds continued to perform well in 2005. The average weighted return was 6.8%, after deduction of fees. Total fund under management has grown to more than $5,000 million.
Our combined funds performed better. The average weighted return was 8.2%. It has also outperformed its benchmark over the past 3 years.
Our funds performed well, due to the expertise of our fund managers and our commitment to bring you best value.
In a recent survey, 88% of our policyholders who invested in the combined fund are happy with the returns. More than 50% are interested to increase their investment.
To find out more about our funds, I invite you to my investment seminars held once every two weeks. You can visit our website www.income.coop or call 6877 3366.
Tan Kin Lian
Chief Executive Officer
Get a better return for your baby bonus?
The parent is allowed to contribute up to $6,000 in a child development account (ie baby bonus). The governemnt matches with $6,000.
The total of $12,000 has to be invested with POSB which pays interest at 0.275% a year. Unused money in the account will be transferred to edusave when the child enters primary school. The investment in POSB is for 6 years.
Capital sum $12,000
Interest for 6 years at 0.275% p.a $199
Interest for 6 years at 2.5% p.a $1,916 (10 times more)!
Interest for 6 years at 5.5% p.a. $4,546 (not guaranteed, 22 times more!)
The difference is still sizeable.
We will find a way to convince the government to allow the money to be invested in our balanced fund to earn a higher return.
The total of $12,000 has to be invested with POSB which pays interest at 0.275% a year. Unused money in the account will be transferred to edusave when the child enters primary school. The investment in POSB is for 6 years.
Capital sum $12,000
Interest for 6 years at 0.275% p.a $199
Interest for 6 years at 2.5% p.a $1,916 (10 times more)!
Interest for 6 years at 5.5% p.a. $4,546 (not guaranteed, 22 times more!)
The difference is still sizeable.
We will find a way to convince the government to allow the money to be invested in our balanced fund to earn a higher return.
Sunday, February 12, 2006
What is Islamic insurance?
The Muslim community prefer insurance that are based on takaful principles, such as:
- transparency in transactions
- fair dealings, meaning mutual benefit
- cooperation for a common good to assist those in need
Under these principles, the policyholders are fairly treated and receive a fair return on their savings. The insurance provider can also get a fair profit from operating their insurance business.
As a cooperative society, NTUC Income has been operating on principles that are similar to Islamic principles.
Some Muslim scholars even hold the view that takaful should be operated as a cooperative or mutual insurance.
Our Amanah fund ($300 million now, to be increased to $1 billion) is popular with both Muslims and non-Muslims.
- transparency in transactions
- fair dealings, meaning mutual benefit
- cooperation for a common good to assist those in need
Under these principles, the policyholders are fairly treated and receive a fair return on their savings. The insurance provider can also get a fair profit from operating their insurance business.
As a cooperative society, NTUC Income has been operating on principles that are similar to Islamic principles.
Some Muslim scholars even hold the view that takaful should be operated as a cooperative or mutual insurance.
Our Amanah fund ($300 million now, to be increased to $1 billion) is popular with both Muslims and non-Muslims.
Saturday, February 11, 2006
Enjoy benefit as a "preferred policyholder"
NTUC Income is looking for a better way to serve our policyholders. We plan to offer special loan terms to a "preferred policyholder":
[] Lower interest rate
[] Pre-approval of loan
[] Hassle free application
[] Longer repayment period
[] Higher loan amount
The loan could be for:
[] loan for marriage
[] to buy a car or motor cycle
[] to buy a home
[] for education
[] other purpose
To quality as a "preferred policyholder", the policyholder must be insured for at least 2 years and have total regular saving of more than $5,000.
We will also extend this status to a policyholder whose parent has at least $20,000 in cash value with us.
We want to make it a benefit for a young policyholder to be a "preferred policyholder".
[] Lower interest rate
[] Pre-approval of loan
[] Hassle free application
[] Longer repayment period
[] Higher loan amount
The loan could be for:
[] loan for marriage
[] to buy a car or motor cycle
[] to buy a home
[] for education
[] other purpose
To quality as a "preferred policyholder", the policyholder must be insured for at least 2 years and have total regular saving of more than $5,000.
We will also extend this status to a policyholder whose parent has at least $20,000 in cash value with us.
We want to make it a benefit for a young policyholder to be a "preferred policyholder".
Earn on your investment immediately!
If you buy a regular premium ILP (investment linked plan), you are likely to pay 150% of your annual premium as distribution cost.
If you invest $300 a month, the distribution cost will take away $5,400 from your savings. It goes to pay the agent's commission. This is the money that should be earning an attractive return for you instead.
If you buy a ILP from NTUC Income, 100% of your savings is invested immediately. You can get a much higher return on the maturity date!
Wow! It makes more sense to invest with NTUC Income.
Unbelievable? Go to www.askdrmoney.com.
If you have recently bought an expensive ILP, you can still make a switch now to NTUC Income. We can help you to reduce your cost and start making an invsetment gain now.
Call 6788 1111
If you invest $300 a month, the distribution cost will take away $5,400 from your savings. It goes to pay the agent's commission. This is the money that should be earning an attractive return for you instead.
If you buy a ILP from NTUC Income, 100% of your savings is invested immediately. You can get a much higher return on the maturity date!
Wow! It makes more sense to invest with NTUC Income.
Unbelievable? Go to www.askdrmoney.com.
If you have recently bought an expensive ILP, you can still make a switch now to NTUC Income. We can help you to reduce your cost and start making an invsetment gain now.
Call 6788 1111
Friday, February 10, 2006
Visitors to my blog
My site meter shows an average of 67 people visit my blog every day, including weekends. Thank you for being one of them.
Tell you friends to visit my blog.
Tell you friends to visit my blog.
Offer better value to consumers
100 years ago, it was difficult to sell life insurance.
An insurance agent had to spend many months to learn about insurance and selling skills. A productive agent sold 20 policies in a year. It was hard work to convince people to buy life insurance.
The agent had to earn enough to make a living. So, commission had to be high, as much as 1 year of premium, to make it worth while for the agent.
The government gave tax relief to the policyholder. If the policyholder kept the policy for 10 years or longer, the saving in tax relief was more than the commission earned by the agent. The return to the policyhoder from life insurance was quite attractive, in spite of the high distribution cost.
About 20 years ago, the government in many countries removed the tax relief or made it worth much less.
Around that time, the life insurance funds were able to earn a high rate of investment return. If the policyholder kept the policy for a long period, the net return was still quite attractive, even after paying for the high distribution cost.
For example, if the insurance fund earned a net rate of 7% per annum, and the expenses effectively took away 2.5%, the net return to the policyholder was still quite attractive at 4.5%.
The scenario changes when investment return dropped. If the investment return was 4.5%, and 2.5% was deducted for expenses, the net return to the policyholder was only 2%. This would be unattractive for a 20 year investment.
Life insurance agents changed their selling pitch. They sold to customers about the importance of insurance. But the product is not really the right one, as it is too costly and give a poor return.
What is the solution?
Life insurance agents and companies have to change their approach.
They have to offer better value products to their customers. They have to reduce their distribution cost and other expenses, and distribute a larger portion of the investment return to their customers.
How can agents survive on lower commission? By finding new ways to increase the volume of sales, without having to work longer hours. In other words, by being more productive.
They should sell 50 to 100 policies a year, and not only 20 policies. The commission can be lower for each policy, but the income on the higher volume of sales will be higher.
Life insurance companies must also do their part by streamlining operations and reducing expenses.
By working together, agents and their companies can lower costs, increase returns and remain competitive in this new consumer-savvy environment.
NTUC Income is making the changes to provide better value to the customers. By adapting, we expect to prosper in the insurance industry of the 21st century.
An insurance agent had to spend many months to learn about insurance and selling skills. A productive agent sold 20 policies in a year. It was hard work to convince people to buy life insurance.
The agent had to earn enough to make a living. So, commission had to be high, as much as 1 year of premium, to make it worth while for the agent.
The government gave tax relief to the policyholder. If the policyholder kept the policy for 10 years or longer, the saving in tax relief was more than the commission earned by the agent. The return to the policyhoder from life insurance was quite attractive, in spite of the high distribution cost.
About 20 years ago, the government in many countries removed the tax relief or made it worth much less.
Around that time, the life insurance funds were able to earn a high rate of investment return. If the policyholder kept the policy for a long period, the net return was still quite attractive, even after paying for the high distribution cost.
For example, if the insurance fund earned a net rate of 7% per annum, and the expenses effectively took away 2.5%, the net return to the policyholder was still quite attractive at 4.5%.
The scenario changes when investment return dropped. If the investment return was 4.5%, and 2.5% was deducted for expenses, the net return to the policyholder was only 2%. This would be unattractive for a 20 year investment.
Life insurance agents changed their selling pitch. They sold to customers about the importance of insurance. But the product is not really the right one, as it is too costly and give a poor return.
What is the solution?
Life insurance agents and companies have to change their approach.
They have to offer better value products to their customers. They have to reduce their distribution cost and other expenses, and distribute a larger portion of the investment return to their customers.
How can agents survive on lower commission? By finding new ways to increase the volume of sales, without having to work longer hours. In other words, by being more productive.
They should sell 50 to 100 policies a year, and not only 20 policies. The commission can be lower for each policy, but the income on the higher volume of sales will be higher.
Life insurance companies must also do their part by streamlining operations and reducing expenses.
By working together, agents and their companies can lower costs, increase returns and remain competitive in this new consumer-savvy environment.
NTUC Income is making the changes to provide better value to the customers. By adapting, we expect to prosper in the insurance industry of the 21st century.
Wednesday, February 8, 2006
Give work to students from poor family
NTUC Income plans to give work to students who come from poor family. They will be recommended by the school.
We will pay them at $6 or $7 an hour. The work can be done using the personal computer in the school. The student can work for 2 hours each day.
We hope to benefit 500 students in a year.
If these students do not have useful work, they may idle and loiter. Giving them useful work can help their family to pay for their school expenses. It will give them something meaningful to work for.
We will pay them at $6 or $7 an hour. The work can be done using the personal computer in the school. The student can work for 2 hours each day.
We hope to benefit 500 students in a year.
If these students do not have useful work, they may idle and loiter. Giving them useful work can help their family to pay for their school expenses. It will give them something meaningful to work for.
Tuesday, February 7, 2006
Invest in a 10 year annuity and save tax
Here is an idea. An annuitant can invest in a 10 year annuity and save on tax.
Annuity is now exempt from tax. Here is an example of how it can be used for tax saving.
The annuitant invest $10,000 to receive an annuity certain of $1,232 per year for 10 years. This assumes that 4% interest is used in the computation.
The total payment for 10 years is $12,320. The actual interest earned is $2,320. If the annuitant pays income tax at 10%, the tax payable on the interest component should be $232. By investing in an annuity plan, the annuitant save $232 on the tax.
The tax saving add 0.4% to the yield. This is the same as investing in another product to earn 4.4%, pay income tax at 10% and get the same net return as the annuity.
Annuity is now exempt from tax. Here is an example of how it can be used for tax saving.
The annuitant invest $10,000 to receive an annuity certain of $1,232 per year for 10 years. This assumes that 4% interest is used in the computation.
The total payment for 10 years is $12,320. The actual interest earned is $2,320. If the annuitant pays income tax at 10%, the tax payable on the interest component should be $232. By investing in an annuity plan, the annuitant save $232 on the tax.
The tax saving add 0.4% to the yield. This is the same as investing in another product to earn 4.4%, pay income tax at 10% and get the same net return as the annuity.
Monday, February 6, 2006
Know Your Insurance - Topics
If you like to learn about any of the topics below, you can visit
www.KnowYourInsurance.com.sg
INSURANCE
Motor Insurance
iYoung
Investment Linked Plan
Personal Accident
Travel Insurance
Medical Insurance
Saving for Education
FAST (Financial Advice)
An insurance cooperative
Life Annuity
Home Insurance
GENERAL
Manage Your Money
Take a holiday in Sabah
Invest your CPF savings
Buying a new car
Estate Duty
www.KnowYourInsurance.com.sg
INSURANCE
Motor Insurance
iYoung
Investment Linked Plan
Personal Accident
Travel Insurance
Medical Insurance
Saving for Education
FAST (Financial Advice)
An insurance cooperative
Life Annuity
Home Insurance
GENERAL
Manage Your Money
Take a holiday in Sabah
Invest your CPF savings
Buying a new car
Estate Duty
Know Your Insurance website - Mandarin & Malay
NTUC Income is launching the Mandarin and Malays versions of the "Know Your Insurance" website.
We first launched the English version of this website on 21 December 2005. It received encouraging response. A total of 33,000 people have visited the website over the past five weeks, or an average of 1,000 visitors daily.
5,000 people have taken the test on the insurance topics and are eligible for a discount when they purchase NTUC Income's insurance products.
A recent survey of 200 visitors:
82 per cent find the website to be educational
94 per cent of the users will visit the website again
82 per cent will recommend their friends to visit the website
74 per cent will take advantage of the discounts to buy insurance
The top five popular topics are: Motor Insurance, Investment-Linked Plan, Life Annuity, Medical Insurance and iYoung.
We first launched the English version of this website on 21 December 2005. It received encouraging response. A total of 33,000 people have visited the website over the past five weeks, or an average of 1,000 visitors daily.
5,000 people have taken the test on the insurance topics and are eligible for a discount when they purchase NTUC Income's insurance products.
A recent survey of 200 visitors:
82 per cent find the website to be educational
94 per cent of the users will visit the website again
82 per cent will recommend their friends to visit the website
74 per cent will take advantage of the discounts to buy insurance
The top five popular topics are: Motor Insurance, Investment-Linked Plan, Life Annuity, Medical Insurance and iYoung.
Saturday, February 4, 2006
My wish for budget 2006 - SRS
If I were the Finance Minister, I would ... Review the Supplementary Retirement Scheme and make it more effective in helping people to make additional savings for retirement.
I will increase the amount of contribution to a flat 15% of annual income, or $16,000 whichever is higher.
For non-residents who do not contribute to CPF, I will allow an additional contribution of 20% of earnings, subject to a cap of $9,600 (being 20% on $4,000 X 12).
The other features of the SRS can remain the same.
I will increase the amount of contribution to a flat 15% of annual income, or $16,000 whichever is higher.
For non-residents who do not contribute to CPF, I will allow an additional contribution of 20% of earnings, subject to a cap of $9,600 (being 20% on $4,000 X 12).
The other features of the SRS can remain the same.
Annuity income is exempt from personal tax
If you buy an annuity, the income that you receive is fully exempt from personal tax.
Here is an example. Assume an annuitant invest $100,000 in an annuity and receive back a total of $150,000 during the lifetime. This comprise of a return of capital (ie $100,000) and the income earned on investing this sum, (ie $50,000).
The annuitant does not have to pay any personal tax on the full amount revieved as annuity.
If the annuitant had invested invested in other type of investment and earned an income of $50,000 over several years, this income will be taxed at the marginal rate. If this rate is an average of 10%, the tax payable is $5,000.
By investing in the life annuity, the annuitant enjoy this tax exemption and receives $5,000 more.
An annuity has a tax advantage. It is better to invest in an annuity, if the return given is competitive.
In the above example, if the total payout of $150,000 is received over 20 years, the annuity income for each year is $7,500. This represents an attractive return of 7.5% on the invested sum. However, this return comprise partly of the consumption of the capital and on the actual income earned.
NTUC Income offers an attractive return on our annuities. We now account for 60 percent of the market. The remaining 40% is shared by several life insurance companies.
Here is an example. Assume an annuitant invest $100,000 in an annuity and receive back a total of $150,000 during the lifetime. This comprise of a return of capital (ie $100,000) and the income earned on investing this sum, (ie $50,000).
The annuitant does not have to pay any personal tax on the full amount revieved as annuity.
If the annuitant had invested invested in other type of investment and earned an income of $50,000 over several years, this income will be taxed at the marginal rate. If this rate is an average of 10%, the tax payable is $5,000.
By investing in the life annuity, the annuitant enjoy this tax exemption and receives $5,000 more.
An annuity has a tax advantage. It is better to invest in an annuity, if the return given is competitive.
In the above example, if the total payout of $150,000 is received over 20 years, the annuity income for each year is $7,500. This represents an attractive return of 7.5% on the invested sum. However, this return comprise partly of the consumption of the capital and on the actual income earned.
NTUC Income offers an attractive return on our annuities. We now account for 60 percent of the market. The remaining 40% is shared by several life insurance companies.
Friday, February 3, 2006
Cancel your motor insurance and move to NTUC Income
NTUC Income charges a lower premium rate for motor insurance. The difference can be up to 25%.
If you have insured at a higher premium rate, you can cancel the existing policy, get the refund premium and move to NTUC Income now.
Your current insurer will normally charge 15% of the premium or $100 for administration charges for cancellation. The unused premium minus the cancellation charge is returned to the policyholder.
Here is an example.
Take the case of a policyholder who pays a premium of $1,200 and wish to cancel the policy after 6 months.
The refund premium is 1/2 of 85% of $1,200 = $510.
If our premium is $900 (ie 25% lower than $1,200), the policyholder pays only $450 for the 6 month of insurance with us.
He will benefit by cancelling the policy and moving to us now. The benefit is higher, if you cancel your policy within the first few months.
If you have insured at a higher premium rate, you can cancel the existing policy, get the refund premium and move to NTUC Income now.
Your current insurer will normally charge 15% of the premium or $100 for administration charges for cancellation. The unused premium minus the cancellation charge is returned to the policyholder.
Here is an example.
Take the case of a policyholder who pays a premium of $1,200 and wish to cancel the policy after 6 months.
The refund premium is 1/2 of 85% of $1,200 = $510.
If our premium is $900 (ie 25% lower than $1,200), the policyholder pays only $450 for the 6 month of insurance with us.
He will benefit by cancelling the policy and moving to us now. The benefit is higher, if you cancel your policy within the first few months.
Thursday, February 2, 2006
Advice: How to restructure your life insurance
QUESTION
Dear Mr Tan
In today's global market condition and removal of the iron rice bowl, job security are now being a thing of the past. Many Singaporean whom have bought numerous
life insurance policies found that they are not able to keep up with the long term payment.
This has resulted in cancellation after emptying accumulated bonuses to pay their insurance premium. It is no longer attractive to make a long term commitment.
I am a victim of multinational company relocated from Singapore to New Delhi.
REPLY
Dear
I will get someone to assist you on restructuring your insurance plans, as follows:
- surrender for the cash value
- NTUC Income gives generous values compared to other insurance companies
- invest the cash value in our combined fund (for flexibility and attractive return)
- make flexible savings under our Ideal plan
- take a decreassing term assurance for your coverage (it cost you much less)
Dear Mr Tan
In today's global market condition and removal of the iron rice bowl, job security are now being a thing of the past. Many Singaporean whom have bought numerous
life insurance policies found that they are not able to keep up with the long term payment.
This has resulted in cancellation after emptying accumulated bonuses to pay their insurance premium. It is no longer attractive to make a long term commitment.
I am a victim of multinational company relocated from Singapore to New Delhi.
REPLY
Dear
I will get someone to assist you on restructuring your insurance plans, as follows:
- surrender for the cash value
- NTUC Income gives generous values compared to other insurance companies
- invest the cash value in our combined fund (for flexibility and attractive return)
- make flexible savings under our Ideal plan
- take a decreassing term assurance for your coverage (it cost you much less)
Wednesday, February 1, 2006
Avoid Structured Deposit
QUESTION FROM A COLLEAGUE
In 2003, my father and I invested $5,000 in a 6-year capital guaranteed investment product called "Enrich Account".
It provides a 3.6% pay-out in the first year and subsequent pay-outs on the Bank's discretion. We received a payout of S$180 in 2003, S$90 in 2004 and no payout in 2005. The current value of the investment is S$4,300. We are tied up till 2009.
I suspect the poor performance is due to its bond investments which are affected by the rising interest rate environment. Although it is capital guaranteed, it ties up our money for 6 years and ultimately gives poor returns.
What is your advice?
LESSON:
This is a good example of structured deposits and the problems with them. I avoid them.
If you wish to invest in a structured product, you should understand how it works. You should also ask the Bank to disclose disclose the minimum and maximum return and the actual returns realised - for each of the structured products which have matured.
In 2003, my father and I invested $5,000 in a 6-year capital guaranteed investment product called "Enrich Account".
It provides a 3.6% pay-out in the first year and subsequent pay-outs on the Bank's discretion. We received a payout of S$180 in 2003, S$90 in 2004 and no payout in 2005. The current value of the investment is S$4,300. We are tied up till 2009.
I suspect the poor performance is due to its bond investments which are affected by the rising interest rate environment. Although it is capital guaranteed, it ties up our money for 6 years and ultimately gives poor returns.
What is your advice?
LESSON:
This is a good example of structured deposits and the problems with them. I avoid them.
If you wish to invest in a structured product, you should understand how it works. You should also ask the Bank to disclose disclose the minimum and maximum return and the actual returns realised - for each of the structured products which have matured.
Subscribe to:
Posts (Atom)
:.
