The baby boomer generation, who are now in their 50s and 60s, benefitted from the economic growth and are generally quite wealthy.
Some of them are thinking of how best to transfer a portion of their wealth to their children.
I suggest that they should make a partial transfer now, when their children are in their 20s. The children need the mney now, rather than 20 years later (when their parents pass away).
NTUC Income will organise seminars to cover will writing, annuity plan, term annuity, trust, estate duty and similar topics.
More details will be announced later.
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Friday, March 17, 2006
Preferred policyholder
NTUC Income plans to register a "preferred policyholder". They will be allowed to have a loan in the future (for car, house, and other purpose) at a preferential interest rate and more attractive terms.
This will be specially useful for young policyholders. The saving on interest can amount to a lot of money.
We will communicate to our policyholders soon.
This will be specially useful for young policyholders. The saving on interest can amount to a lot of money.
We will communicate to our policyholders soon.
High cost of living
I read a news report that young people find the cost of living to be high in Singapore.
I agree.
When I was young, the HDB flats and shops were at a subsidisied and controlled price. This helps to keep the cost of living low, and make Singapore competitive.
During the late 1980s, the HDB flats were allowed to appreciate to the "market price". This benefitted the HDB flat owners, but increased the cost of living for the next generation.
Looking back, it would have been better for Singapore, if HDB flats had been kept at the controlled prices. But, it is too late to turn back the clock.
At the current high prices, property will be just like any other investment. One has to think carefully before investing in property. Is the price right?
For some people, it may be better to rent a property. The rental may be lower than the cost of owning the property.
The capital sum can be invested in other means, eg in unit trusts or the combined fund from NTUC Income. These investments may give a better return in the long run.
Get advice. Make the right choice.
I agree.
When I was young, the HDB flats and shops were at a subsidisied and controlled price. This helps to keep the cost of living low, and make Singapore competitive.
During the late 1980s, the HDB flats were allowed to appreciate to the "market price". This benefitted the HDB flat owners, but increased the cost of living for the next generation.
Looking back, it would have been better for Singapore, if HDB flats had been kept at the controlled prices. But, it is too late to turn back the clock.
At the current high prices, property will be just like any other investment. One has to think carefully before investing in property. Is the price right?
For some people, it may be better to rent a property. The rental may be lower than the cost of owning the property.
The capital sum can be invested in other means, eg in unit trusts or the combined fund from NTUC Income. These investments may give a better return in the long run.
Get advice. Make the right choice.
Thursday, March 16, 2006
Incomeshield Unlimited
Someone suggested that we should call our medical plan as "Incomeshield Unlimited".
This plan now provides unlimited lifetime coverage. The total claimable amount is subject to certain specific and annual limits, but is unlimited in the amount that can be claimed during a lifetime.
Our coverage is better than the $5,100,000 limit that is advertised by another medical plan (which charge much higher premium than Incomeshield).
This plan now provides unlimited lifetime coverage. The total claimable amount is subject to certain specific and annual limits, but is unlimited in the amount that can be claimed during a lifetime.
Our coverage is better than the $5,100,000 limit that is advertised by another medical plan (which charge much higher premium than Incomeshield).
Logic9 National Competition
Here is an interesting competition to find the faster players to solve the Logic9 (Sudoku) puzzle. Registration is free.
Click on the following link to get details of the competition and to register
http://www.logic9.com.sg.
You have a chance to win up to 36,000 worth of prizes. The top prize for each age group is an IBM Thinkpad notebook worth $4,000.
You stand a better chance of winning, if you practice for this competition. You can buy a Logic9 CD or booklet for $5 only at selected NTUC Fairprice supermarkets.
Click on the following link to get details of the competition and to register
http://www.logic9.com.sg.
You have a chance to win up to 36,000 worth of prizes. The top prize for each age group is an IBM Thinkpad notebook worth $4,000.
You stand a better chance of winning, if you practice for this competition. You can buy a Logic9 CD or booklet for $5 only at selected NTUC Fairprice supermarkets.
Tuesday, March 14, 2006
Growth plan gives a fairly attractive return
A policyholder invested $50,000 in a Growth plan in 2001. It matured 5 years later with a maturity value of $58,000.
The policyholder earned a net return of 3.1% over the past 5 years on the Growth policy.
As the Growth policy has to be invested mostly in short term secure bonds, the return of 3.1% is quite attractive. During the past five years, Government bonds provide a return of around 3%.
Apart from giving a fairly good return, our Growth plan also give life insurance cover, which is built into the contract and not charged separately.
Our aim is to invest the funds prudently, get a fairly attractive return, and return most of the return to our policyholders.
Here is the good news for our policyholders of our Growth plan. The bonus rate has been increased recently. We expect to give better than 3.1% return in future years, based on the higher bonus rates. For a Growth plan that is invested for more than 10 years, the return should be higher than 4% per annum, based on our current bonus rates.
The policyholder earned a net return of 3.1% over the past 5 years on the Growth policy.
As the Growth policy has to be invested mostly in short term secure bonds, the return of 3.1% is quite attractive. During the past five years, Government bonds provide a return of around 3%.
Apart from giving a fairly good return, our Growth plan also give life insurance cover, which is built into the contract and not charged separately.
Our aim is to invest the funds prudently, get a fairly attractive return, and return most of the return to our policyholders.
Here is the good news for our policyholders of our Growth plan. The bonus rate has been increased recently. We expect to give better than 3.1% return in future years, based on the higher bonus rates. For a Growth plan that is invested for more than 10 years, the return should be higher than 4% per annum, based on our current bonus rates.
Survey of Young People
2,140 young people responded to the survey.
Which is more important to you?
* Get a better return on your savings 86%
* Make regular savings from salary 52%
* Adequate insurance cover 42%
* Get preferential terms for a loan in the future 19%
NTUC Income is planning to offer special terms for a loan "preferred policyholder". Which do you prefer?
* Lower interest rate 92%
* Hassle free application 50%
* Longer repayment period 29%
* Higher loan amount 27%
* Pre-approval of loan 15%
Which type of loan is likely to be attractive to you?
* To buy a home 66%
* For education 43%
* To buy a car or motor cycle 41%
* Loan for marriage 20%
* Other purpose 26%
To be a "preferred policyholder", you will need to be insured for at least 2 years and have total regular saving of more than $5,000. Do you find these conditions acceptable?
* I am interested to qualify in 2 years time 41%
* I already meet them 35%
* I am not interested at all 24%
Which is more important to you?
* Get a better return on your savings 86%
* Make regular savings from salary 52%
* Adequate insurance cover 42%
* Get preferential terms for a loan in the future 19%
NTUC Income is planning to offer special terms for a loan "preferred policyholder". Which do you prefer?
* Lower interest rate 92%
* Hassle free application 50%
* Longer repayment period 29%
* Higher loan amount 27%
* Pre-approval of loan 15%
Which type of loan is likely to be attractive to you?
* To buy a home 66%
* For education 43%
* To buy a car or motor cycle 41%
* Loan for marriage 20%
* Other purpose 26%
To be a "preferred policyholder", you will need to be insured for at least 2 years and have total regular saving of more than $5,000. Do you find these conditions acceptable?
* I am interested to qualify in 2 years time 41%
* I already meet them 35%
* I am not interested at all 24%
Switch and save on part of the 150%
Some people invested in a regular premium investment linked product from another insurer and have to incur up a distribution cost. Up to 150% of the annual premium may be taken away from their investment during the first few years.
A policyholder who has bought an expensive policy recently, and who was not told clearly about the high distribution cost, may find it better to switch to NTUC Income now.
They do not have to incur the distribution cost for the remaining period (usually up to three years) and can take a similar ILP policy from NTUC Income (Ideal 5) where 100% of the saving is invested from the first month.
There is a small catch. We impose $20 more in policy fee each year. You can see our adviser or visit our business center.
A policyholder who has bought an expensive policy recently, and who was not told clearly about the high distribution cost, may find it better to switch to NTUC Income now.
They do not have to incur the distribution cost for the remaining period (usually up to three years) and can take a similar ILP policy from NTUC Income (Ideal 5) where 100% of the saving is invested from the first month.
There is a small catch. We impose $20 more in policy fee each year. You can see our adviser or visit our business center.
Get 150% more
NTUC Income advertise our Ideal plan, which invests 100% of the monthly premium from the start. Similar plans from other insurers take away as much as 150% of the annual premium during the first few years.
Some insurers are unhappy with our advertisement. They expressed that our advertisement denigrates their product.
Here is my reply.
We wish to educate the general public that they have an option to buy a regular investment linked plan that does not carry a large front end load.
We do not intend to denigrate the products of other member companies. I am
sure that they are capable of convincing the consumers about the necessity
and value of paying the front end load.
Some insurers are unhappy with our advertisement. They expressed that our advertisement denigrates their product.
Here is my reply.
We wish to educate the general public that they have an option to buy a regular investment linked plan that does not carry a large front end load.
We do not intend to denigrate the products of other member companies. I am
sure that they are capable of convincing the consumers about the necessity
and value of paying the front end load.
Monday, March 13, 2006
Internet portal reduce front end charges
The Straits Times reported that two internet portals have reduced their front end charges for investing in unit trusts. The charges have been reduced to 1% and 2.5% respectively.
The unit trusts sold by these portals have high annual charges, typically from 1.5% to 2.5% per annum.
These high annual charges can reduce your return over a 10 year period.
By comparison, the combined fund from NTUC Income has modest charges, as follows:
- initial spread: 1.5% to 3.5%, depending on amount invested
- annual charge: about 1% per annum.
By investing with NTUC Income, you can get a return of about 3% to 12% more over 10 years, assuming that the performance of the fund is similar. This better return comes mainly from our lower annual charge.
The unit trusts sold by these portals have high annual charges, typically from 1.5% to 2.5% per annum.
These high annual charges can reduce your return over a 10 year period.
By comparison, the combined fund from NTUC Income has modest charges, as follows:
- initial spread: 1.5% to 3.5%, depending on amount invested
- annual charge: about 1% per annum.
By investing with NTUC Income, you can get a return of about 3% to 12% more over 10 years, assuming that the performance of the fund is similar. This better return comes mainly from our lower annual charge.