Low yield on Endowment policy

A consumer is unhappy about the low yield on a 20 year endowment policy that has matured. The insurance company did not revised the bonus rates during 2010, although the financial market has recovered. He asked for my views. Here is my reply:

Dear
I believe that this yield of 2.96% on your policy is probably what is paid for similar policies offered by several other companies during the same period. It may be slightly on the low side, but is not significantly lower. The only exception is NTUC Income that offers a yield that is probably between 4% to 5% for the same period.

You are unhappy that there has not been a revision of bonus rate for the past year. I am not aware if other companies have increased their bonus rate for the same period. I suspect that most of them still keep to the same bonus rate.

It will be difficult for you to get the insurance company to increase its bonus rate or for an external party, such as CASE, to make them do so.


Tan Kin Lian