Earn up to $30,000 more, compared to similar plans in the market
1. What is Flexi-Link Policy?
It is an investment linked plan for investing a lump sum. You can invest your saving in the Central Provident Fund, Supplementary Retirement Scheme or fixed deposits, to earn a higher return (not guaranteed from an investment fund.
2. What are the key features of the Flexi-Link Policy?
The attractive features are:
-100% of the lump sum is invested in a large, well diversified fund
-The charges are among the lowest in the market
-You are insured for 125% of the savings or value of investments (if higher)
- You can invest as long as you wish (i.e. no lock-in period)
3. What is the projected return?
The future return on your investment is not guaranteed. It will depend on the actual return from the investments of the fund over the period that you have invested.
Over the past ten years, the average return from invesing in global equities is about 8% per annum.
The following tables shows the projected amount (not guaranteed) at the end of 20 years for a lump sum investment of $50,000:
Assumed net return 2.5% p.a 5% p.a. 7% p.a. 9% p.a.
Initial investment $50,000 $50,000 $50,000 $50,000
Gain (estimated) $31,900 $78,000 $136,000 $220,000
Projected amount $81,900 $128,000 $186,000 $270,000
Assumed net return - after deducting management fee
Gain (estimated) - after deducting spread and policy fee
If you earn a net return of 7% per annum from your fund, you will get more than 3 times of your original investment and more than 2 times compared to a safe investment that earns 2.5% per annum.
4. Is it risky to invest in a fund?
By investing in an equity or balanced fund, you can earn a higher return.
You can minimise your risk by investing in a large, well diversified fund that is benchmarked against the market. The large fund is well diversified in many investments. If a few investment turn bad, they are likely to be offset by the good performance of other investments. .
If you invest for 10 years or longer, you will be able to average out the performance in good and bad years and earn an average long term return. This return should be much higher than safe investments, such as bank deposits or the Central Provident Fund.
5. Will NTUC Income give a better return, compared to similar funds in the market?
All large, well diversified funds should earn a similar return over the long term, provided that they are well managed and are invested in the same risk category.
The advantage of investing in a fund managed by NTUC Income is our low upfront and annual fee. We have among the lowest charges in the market.
Our upfront fee (i.e. spread) is only 3.5%, compared to 5% charged by most other funds. Our annual fee is about 1%, compared to 1.5% to 2% charged by other funds.
The difference in fees can amount to 20% over an investment period of 20 years. If you invest $50,000 over 20 years to get a return of (say) $150,000 on maturity, the difference in fees can amount to $30,000. You can get $30,000 more from NTUC Income, due to our low charges.
The other funds will take an additional $1,500 a year from you to pay higher commisison to their agent or to give higher profit to their shareholders. The total in 20 years could amount to $30,000.
6. What funds are available from NTUC Income?
NTUC Income offers several funds.
A popular fund is the Combined Growth Fund. It has a fund size of $3,800 million and are invested in 900 equity and bond instruments. They are managed by 9 top fund managers globally. The benchmark return during the past ten years was 6.5% per annum. The actual return during the first three years (2003 to 2005) was an average of 16% per annum.
Note:
-The future return is not guaranteed.
-Past performance is not indicative of future return.
7. Is there any life insurance cover?
In the event of death of before age 60, the policy pays a sum assured of 125% of the invested sum (less withdrawals) or the value of the investments, whichever is higher. This insurance cover is provided as part of the upfront fee of 3.5%. There is no additional charge.
If you wish to have additional insurance, you can purchase our low cost term assurance. Our premium rates are about 30% lower than the market. For example, a male age 30 can insure for 20 years at a monthly premium of only $13.40.
8. What are the other important features?
This plan allows you to:
- make an initial investment of $5,000 or more.
- top up at any time, $1,000 or more.
- make partial withdrawal at any time, of $500 or more (without any charge).
- arrange for a fixed monthly withdrawal to be credited to your bank account
9. Interested?
Call 62 INCOME (6246 2663)
Visit our Insurance Business Centre at Bras Basah Road or Tampines Point.
See your insurance adviser.
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