The Growth policy is a single premium endowment plan. You invest a single premium and receives a guaranteed sum assured payable on the maturity date or on earlier death before maturity date.
The sum assured is capital guaranteed and provides an attractive return on your single premium investment.
You will get a bonus each year, based on the financial results of the participating life insurance fund. The bonus is added to the sum assured, and increases the return on your investment.
The amount of the bonus is not guaranteed and may fluctuate each year. The amount is calculated by the appointed actuary, who has to observe several principles to ensure that the distribution is fair to the policyholders.
2. What is the LP Series?
The LP series is the latest series of participating policies offered by NTUC Income. It has been offered since 1993.
All Growth policies under the LP series enjoy the same rate of bonus, which is calculated at a certain percentage of the sum assured and a certain percentage of the accumulated bonus.
The rates of bonus declared for the Growth LP in recent years (2003 TO 2005) are 1.2%, 1.5% and 1.6% of the sum assured. The accumulated bonus is compounded at 1.5%.
A special bonus of 25% of the accumulated bonus is added and payable on death or on the maturity date. Although this special bonus is discretionary, it has been implemented for the past 20 years or longer.
We expect to continue this practice in the future.
3. What is the expected rate of return?
The following table shows the expected return, based on the rate of bonus declared in 2005, and assuming that this rate of bonus is declared for all future years:
Age Term S/Premium SumAssd Bonus* Maturity* Yield*
30 20 $10,000 $15,400 $7,100 $22,500 4.14%
40 25 $10,000 $17,700 $10,100 $27,800 4.36%
50 10 $10,000 $12,500 $2,500 $14,500 3.82%
* non guaranteed
Note:
1. This is prepared for illustration only.
2. The actual rate of bonus may change in future years.
3. There may be no bonus in some future years.
4. Past performance is not a guarantee for future performance.
4. What amount is payable on death?
If death occurs during the term, the sum assured, accumulated bonus and special bonus is payable immediately. The average yield is higher, due to the earlier payment of the benefit. This is an advantage of a life insurance product that allows the total benefit to be payable immediately on death.
5. What amount is payable on permanent and total disability?
In the event of permanent and total disability, and subject to the terms of the policy, the sum assured, accumulated bonus and special bonus is payable immediately.
To qualify for this payment, the life assured has to be either
* Total and irrecoverable loss of at least two eyes or two limbs;
* Totally unable to engage in any business or occupation or perform any work of any kind for remuneration or profit.
6. Can I withdraw my investment before the maturity date?
You can withdraw the investment and get the cash value. The cash value is calculated using the appropriate actuarial factors, to represent the discounted value of the sum assured and the accumulated bonus.
During the earlier years, the cash value may represent a small loss on your investment or give you a low rate of return. This is due to the cost of issuing the policy, including the commision payable to the agent.
Generally, we do not advise earlier withdrawal of your investment, as it does not provide a satisfactory return. You should consider this option as a measure of last resort.
11. Can I invest my CPF savings?
You can invest your CPF savings in the Growth Policy. The following table shows the difference between the projected return on the Growth plan, compared with the accumulation of your savings at 2.5% per annum.
Assuming you invest $10,000 at age 35:
Term S-Premium Growth plan CPF at
Total(*) 2.5% p.a.
10 yrs $10,000 $14,800 $12,800 +15.6%
15 yrs $10,000 $18,400 $14,500 +26.9%
20 yrs $10,000 $22,500 $16,400 +37.2%
Note: The "total" return on the Growth plan includes projected bonus (based on current rates), and is not guaranteed. The future bonus may change.
Based on the above table, if you invest $10,000 in the CPF to earn 2.5% per annum, you will get $16,400 at the end of 20 years. However, if you invest this sum in our Growth policy, it will grow to $22,500. You can get $6,100 or 37% more, by investing to earn a higher return.
If you use your CPF savings, you are not allowed to take a loan under the Growth plan. On maturity, the maturity benefit has to be returned to our CPF account.
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