Higher cost of Vivolife

Dear Mr. Tan,

An NTUC agent approached me to sell the new Vivolife product. The return from this product is lower than a similar product that was being discontinued.

The agent claimed that the commission is not significantly different. Why is the return from the so much lower?

REPLY

I am not familiar with the new product. My understanding is that the charges are higher to cover the following:

a) Higher commission to the agent
b) Higher advertising expenses
c) Higher profit margin
d) Cost of the additional benefits (or frills).

I suspect that the yield for the period of premium payment could be quite low. You should ask the agent to compute the yield, based on the cash value at the end of this period. If the net yield(after deducting all the costs) is still more than 3%, you can invest in this product.

If not, it is better for you to follow the advise in this FAQ:
http://www.tankinlian.com/faq/savings.html

Gong Xi Fa Cai.