Saturday, March 25, 2006

Reverse mortage on HDB flats - 3 loans granted

The government recently approved granting of reverse mortgage on HDB flats. We received about 250 enquiries during the first few days.

We have since approved 3 reverse mortgage loans on HDB flats. All applicants are above 70 years old (condition set by NTUC Income). The names given below are not the real name.


Mr & Mrs Chan have no dependents. Their 3-room HDB Flat is situated at Marine Parade with a current market valuation of $240k. There is no outstanding loan on the

We have approved a monthly advance of $300 over 16 years at a modest loan to valuation ratio of 40%. We may eventually extend to a monthly advance of $540 (within acceptable loan to valuation ratio of 70%), pending borrower's decision.


Mr & Mrs Cheong have no dependents. Their 3-room HDB Flat (23 yrs old) is situated at Jurong East with a current market valuation of $160k. There is no outstanding loan on the flat.

We have approved a monthly advance of $295 over 18 years at maximum loan to
valuation ratio of 70%.


Mr Teo is currently staying with his wife. He is receiving some allowances from his 3 children. His 4-room HDB Flat (18 yrs old) is situated at Simei with a current market valuation of $250k. There is no outstanding loan on the flat.

At his request, we have approved a monthly advance of $400 over 12 years at
a modest loan to valuation ratio of 34%. He has intention to either sell
or downgrade the flat again (previously downgraded fr 5-room) at the end of
the loan period.

Friday, March 24, 2006

Special features of loans from NTUC Income

NTUC Income plans to offer loans with the following special features:

- competitive rates
- fixed rates for first 3 or 5 years
- repayment start after one year
- lower rates for "preferred" policyholders
- deferment of installments due to loss of employment
- rebate on prompt payment of installments

We hope that our loans will be more suited to our policyholders.

Payment of death claims under DPS

24 March 2006

Forum Page
Straits Times

I refer to the article by Lorna Tan entitled "Key difference in two DPS options not highlighted: Case" (Straits Times, 23 March 2006)

The article highlighted some concern about how the benefit under the Dependent Protection Scheme that is insured with NTUC Income and Great Eastern will be paid out.

The sum involved is only $46,000 or slightly more. In the event of death and the absence of a nomination or will, the benefit will be paid to the family members (ie spouse, children, parents) according to the Insurance Act. It is usually quite straight forward.

NTUC has paid out 300 DPS claims since being appointed one of the insurer. More than 95% of these claims were paid to the proper claimants according to the Insurance Act, who were either executors of wills for those who have made a will or family members for those without a will. The remaining 5% are paid according to specific
nomination submitted by the policyholder. The nominees are usually family members.

Most policyholders will thus find this arrangement to be suitable.

A policyholder of NTUC Income can submit a specific nomination, if they wish to distribute the proceeds in a different manner. The forms are available on request.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Reply: Annuity plans need improvements

24 March 2006


I refer to the letter, 'Annuity plans need improvements', by Mr Yang Song Jian, (Zaobao, 23 March).

Mr Yang asked insurance companies to improve the annuity plans to better take care of the elderly. More should be done educate Singaporeans on the importance of financial planning and savings.

I agree.

In a recent survey, we found out that 50 percent of the respondents wanted to increase their regular savings for their retirement. They know that their current savings in the Central Provident Fund is inadequate.

As a general guide, each person should set aside 10 to 15 percent of the regular earnings as savings for the future. They can use the savings for their retirement or to meet emergencies, in they lose their jobs or have to pay a large medical bill.

They should invest these savings in a flexible plan that can give an attractive rate of return, by investing for the long term.

NTUC Income offers a choice of attractive annuity plans. We handle 65 percent of all life annuities sold in Singapore. Our annuities offer an attractive return, an annual bonus (in most years) to supplement the guaranteed return, and a refund of the balance of the capital on death.

There are a few ways for the public to learn about financial planning:

- see an insurance adviser;
- attend an educational talk;
- visit an educational website.

NTUC Income holds an educational talk every week. The topics include retirement plans, medical insurance, financial planning, reverse mortgage scheme, etc. Schedule of the talks can be found at Admission to these talks is free.

We also manage an educational website at It is available in English, Chinese and Malay versions. The website covers a wide range of insurance topics, such as: personal accident, medical insurance, financial planning, travel insurance and saving for education.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Tuesday, March 21, 2006

Pensioners lost money on their investments ?

Recently, I saw a news article with this headline. It refers to another country. This can be a frightening prospect.

Here are some suggestions on how to invest your retirement money and not face the same risk:

- invest for the long term
- invest in a professionally managed and well diversified fund

It does not matter that the value of the investments can go up or down. They do not concern you. If you are investing for the long term in equities, you should get a better return compared to bonds.

Based on past record, the average return over 10 or 20 years is likely to be 6% to 9%.

The combined fund from NTUC Income is structured to give a good return, with little risk. In fact, risk can be turned to an advantage.

If are keen to learn more, you can call us to attend an educational talk.

Monday, March 20, 2006

Participating or adjustible annuity?

NTUC Income holds a 60% market share in life annuity. Our key product is the participating annuity.


A male annuitant investing $100,000 at age 62 in a immediate life annuity (with no
capital refund) receives $524 per month.

This represents a payout of 6.3% per annum, comparising of a guaranteed return of 2.5% with the balance being a consumption of the capital.

If we earn a net investment return over 2.5%, we will add a bonus to the annuity. We expect an average bonus of 2.5% per annum over the future years, but this is not guaranteed.

If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $446 per month (ie 5.3% p.a).


Some annuitants prefer to have a larger payout, instead of an increasing payout.

We are considering to offer an adjustible annuity that comprise of a guaranteed amount of $524 per month, plus an non-guaranteed amount of $136, making a total payment of $660 per month. The annual payout is 7.9%

The non-guaranteed amount may be adjusted up or down, according to our investment return. If the net investment return is 5%, the amount will not be changed. If it is higher, the non-guaratneed amount will be increased. If it is lower, the amount will be reduced. Any adjustment is expected to be in small gradual steps.

The guaranteed amount will always be payable.

We may offer the option of the adjustible annuity, if there is interest in this product.

If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $602 per month (ie 7.2% p.a).

Sunday, March 19, 2006

Why NTUC Income supports Idac

19 March 2006

Forum Page
Straits Times

I refer to the report entitled "Only 11 insurers left on Idac accident scheme" (St Times, 18 March).

The report covered the reasons why several insurers left the Idac scheme. I wish to tell the other side of the story - why NTUC Income choose to remain in the scheme.

Each day, about 60 of our policyholders and 30 third party claimants reported their accidents to an Idac center.

It is easy for claimants to visit any of 12 Idac centers located in various parts of Singapore. They can get the address by calling 6788 6616.

The accident report and damage assessment is usually completed within 20 minutes. There is no undue delay and hassle.

Most policyholders are willing to leave their vehicles at the Idac center for the repairs to be arranged by us. The repairs are usually completed within five days. If they are covered under our Quality Plus plan, we provide a courtesy car for their use.

We carry out an inspection of the vehicle after the repair, to ensure that the repair is carried out to a satisfactory standard. We also provide six month warranty on the repair.

If the policyholder prefers his regular workshop to repair the vehicle, we offer a cash settlement based on our best estimate of the repair cost. Less than 5% of policyholder choose this option.

We carry out a survey of our policyholders after the repair. We have consistently obtained high scores:

- 98% are satisfied with the service provided by Idac center
- 96% are satisfied with the quality of the repair

We have a small percentage of disputes, usually not involving Idac services. They involve the determination of the party responsible for the accident, potential loss of no-claim discount, and replacement of "wear and tear" parts. We try our best to resolve these disputes.

By using the Idac scheme, we are able to reduce our repair bill by about 15%, representing about 6% of total claims. We pass the saving to our policyholders through lower premium. We are able to offer premium rates that are 10% to 15% lower than the market.

Your report alleged that "Idac was feeding a top insurer early information about cases". This is an unfair statement. I wish to give our perspective.

The Idac scheme allows for immediate reporting of all cases into a centralised computer system. We use this information to contact third party claimants and make direct settlement with them. This helps us to reduce the cost of third party claims. We believe that this information is available to any other insurers, if they choose to use it pro-actively.

Finally, I wish to state that NTUC Income has a sufficient volume of business to start an assessment system on our own. We have decided to support an industry wide scheme, as it is the best way to overcome the inflated repair bills that have troubled the insurance industry in many countries over the past decades.

Tan Kin Lian
Chief Executive Officer
NTUC Income

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