Increase in bonus rates

Hi mr tan,

I had bought a life policy for my baby in 2006 which has a protection value at $100k.

Cash value guaranteed @ 65 yrs = $70000
Non guaranteed @65 yrs = $ 231642

I compared with this year 2007 quotation which has the same protection value of $100k and same cash guaranteed @ $70000 BUT...

Non guaranteed @65 yrs = $ 311399

Difference $311399-$231642= $79757

For 1 year there is about $80k difference in the non-guaranteed portion which i think that is a very big amount. I also understand that it is NON-Guaranteed.

My agent explained to me that this is a marketing gimmick, is that true? So the value of non-guaranteed portion is dervied based on what conditions?

How closely is the non-guaranteed portion being matched? My main concern is at the end of the 65 years, will i be able to collecting less payout than compared to buying 1 year later ?

MY REPLY:

NTUC Income increased its bonus rates in 2007. Based on the higher bonus rates, the projected maturity value at 65 has increased significantly.

Here is the good news. The higher bonus rate is also given to policies issued in the past. The policy that you took in 2006 will enjoy the higher bonus rate as well. It is likely that the projected maturity value will increase to match what is shown in the 2007 policy.