Higher bonuses from 1 January 2007

NTUC Income will be increasing its bonus rates for policyholders from 1 January 2007.

The revised bonus rates will increase the cost of bonus for 2006 by 26%, or an additional $70 million. The key changes are:

- the bonus rates for Whole life plans will incease by $3 per $1000
- the bonus rates for Harvest plans (incepted before Sept 2005) will increase by $1 per 1000 sum assured
- the compounding rate of the accumulated bonus for these policies will increase by 0.3% and0.1% respectively
- the bonus rates for participating annuity plans will increase by 0.25%

The revised bonus rates for these plans will increase the return on these plans. A total of 405,000 policies, representing 54% of the total portfolio, will benefit from this increase.

The bonus rates for endowment plans will remain the same, as they are already enjoying a fairly high rate of return.

The special bonus on surrenders will also be increased to 15% (for durations of 10 to 19 years) and 25% (for durations of 20 years or longer). This will benefit all plans, including the endowment plans. It will give a higher return to policyholders who decide to terminate their policies earlier, usually for financial reasons. We wish to give a better return to these policyholders as well.