Anticipation Policy

Anonymous posting in my blog:

While many who frequent Mr Tan's blog is slamming Revosave, I happened to chance upon a similar insurance product from Income's website called Anticipation Policy. This product pays regular cash coupons every 3 years. Isn't this a product that Mr Tan would say isn't good for the consumer? Ironically, this product was designed while Mr Tan was the CEO. Perhaps Mr Tan could explain this irony.

REPLY:

The Anticipation policy was designed 20 years ago. It had a payout every 3 years (not 1 year).

At the time that it was introduced, it gave a yield that was quite attractive. When the yield on the Anticipation policy dropped due to a reduction in the bonus rate, the sale of this plan was no longer promoted.

In today's environment, this plan is not suitable, due to its high cost and low yield.