24 June 2006
Straits Times Online Forum
I refer to the letter from Heng Cho Choon entitled "NTUC Income's letter to policy-holders sounds threatening. It smacks of insensitivity" (June 24, 2006).
I have taken note of Heng's views. We will consider his suggestion to improve the wording of the letter.
Under a life annuity, the payment is made only to the annuitant during his or her lifetime. We are required to verify that the annuitant is still alive, before making the payment.
Over the past years, we have considered several other options of verifying this fact, including the options suggested by Mr Heng. Each of these option have drawbacks and cannot be relied upon.
In past years, we did use different wordings, such as the kind suggested by Mr Heng. They did not appear to have the impact, as many annuitants failed to reply to us. This caused a lot of difficulty and unnecessary expense in the follow up.
If we continue to pay to annuitants who have died, the additional payment will reduce the bonus payable to the surviving annuitants. This will not be fair to them. We have a duty to act diligently.
NTUC Income has 30,000 annuitants that have to be paid each month. We hold a 65 percent share of all life annutiies sold in Singapore. This number is expected to increase significantly in the future, as more people choose to invest in this type of plan, as it gives an attractive return and is more suitable to the older folks.
We are sensitive to the feelings of our customers. We want to be as polite as possible, but we still have to bring the message across.
Tan Kin Lian
Chief Executive Officer
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