Drop in maturity benefit

Dear Mr. Tan,
You should know the implication, a new page in Singapore insurance ....

20 year ago, I bought a 25 yrs endowment with premium payments limited to 20 year from X. The maturity benefit was projected to be $24,583 with an annual premium of $500. After paying for 20 yrs, I received a statement from X stating the projected total maturity benefit is $19,810 instead of $24,583 - a 20% drop.

Since NTUC is the largest, all other insurance company will follow and I believe not only endowment policy, other policies are also affected. This will affect every citizen. I pity those agents whose customers were mostly friends and relatives.
JK

REPLY
The drop in the maturity benefit is due probably to the lower investment yield earned during the past 20 years, compared to the expected yield at the time that the policy was sold to you. Based on the revised maturity benefit, the yield is 3.9%.

I agree that the yield on this poilcy is somewhat how, compared to the yield earned by company X during the past 20 years. I hope that life insurance companies will reduce their charges and give a better yield to their customers in the future.