QUESTION:
In terms of risk and reward, how does FlexiCash compared with deposit placed with a credit cooperative?
When will the Flexi-Cash promotion ends? Does Income Centre open on Saturday to accept such transactions?
REPLY
Flexi Cash is invested in the money market. Most of the money are lent to banks, so they are quite safe. Some of the money is invested in short term bonds, which are well rated. The risk of loss is very low.
As the money market is invested in short term instruments, there is also very neglible risk of loss due to a sharp increase in interest rate (which may happen to long dated bonds).
The promotion should be available for a few weeks. So, you do not need to hurry.
Income Center is open on Saturday morning.
Friday, June 30, 2006
Learn about Structured Products
Many banks are distributing structured products. They are advertised aggressively. These products look attractive. But they are difficult to understand.
Learn the basics about structured products, before you invest in them. You will find the lesson enjoyable. It can be worth a lot of money to you.
www.knowyourinsurance.com.sg
Learn the basics about structured products, before you invest in them. You will find the lesson enjoyable. It can be worth a lot of money to you.
www.knowyourinsurance.com.sg
Customer looks for tutor in economics
REQUEST FROM CUSTOMER
I'm seeking an economics tutor (female preferred) for my daughter who is now in her first year at Singapore Polytechnic doing business admininistration. I'd greatly appreciate your kind referal to the qualified tutors.
I PASSED TO MY MANAGER IN CHARGE OF OUR HOME SERVICE PORTAL. HE RESPONDED TO THE CUSTOMER. CUSTOMER REPLIED:
Thank you, Mr Wong. I greatly appreciate your kind assistance and look forward to hearing from you.
Many thanks to you too, Mr. Tan for making the referal to Mr. Wong. Please accept my appreciation for your effort on my behalf even when you are at home. Thank you for your help in this matter.
LATER, I RECEIVED THIS E-MAIL FROM THE CUSTOMER
Thank you. I have already had two tutors who responded positively. They look promising and I should be making a decision on the selection soon. Thanks again for your assistance and the efforts of your colleagues from Income particularly Mary and Mr. Wong. Kindly extend my appreciation to them on my behalf.
I'm seeking an economics tutor (female preferred) for my daughter who is now in her first year at Singapore Polytechnic doing business admininistration. I'd greatly appreciate your kind referal to the qualified tutors.
I PASSED TO MY MANAGER IN CHARGE OF OUR HOME SERVICE PORTAL. HE RESPONDED TO THE CUSTOMER. CUSTOMER REPLIED:
Thank you, Mr Wong. I greatly appreciate your kind assistance and look forward to hearing from you.
Many thanks to you too, Mr. Tan for making the referal to Mr. Wong. Please accept my appreciation for your effort on my behalf even when you are at home. Thank you for your help in this matter.
LATER, I RECEIVED THIS E-MAIL FROM THE CUSTOMER
Thank you. I have already had two tutors who responded positively. They look promising and I should be making a decision on the selection soon. Thanks again for your assistance and the efforts of your colleagues from Income particularly Mary and Mr. Wong. Kindly extend my appreciation to them on my behalf.
Thursday, June 29, 2006
Do I get a discount from the Business Center?
QUESTION:
I would like to buy an endowment policy (maybe single premium type) and heard that there will be a discount if I were to buy direct? I wonder how attractive is it? What is the price if they went through an advisor instead. If there is not much difference, then maybe it's better to have the convenience of an advisor to monitor my policy?
REPLY:
For most products that are under promotion, you pay the same premium in the business center and to the insurance adviser.
For non-promotion products, if you come to the business center, you may get a very modest incentive to cover your travelling expenses and time. It depends on the product that you buy. The consultant will tell you about it.
Most people come to the business center for other reason - i.e. they like to get frank advice and not feel the pressure of having to buy a product due to the time spent by the adviser.
I would like to buy an endowment policy (maybe single premium type) and heard that there will be a discount if I were to buy direct? I wonder how attractive is it? What is the price if they went through an advisor instead. If there is not much difference, then maybe it's better to have the convenience of an advisor to monitor my policy?
REPLY:
For most products that are under promotion, you pay the same premium in the business center and to the insurance adviser.
For non-promotion products, if you come to the business center, you may get a very modest incentive to cover your travelling expenses and time. It depends on the product that you buy. The consultant will tell you about it.
Most people come to the business center for other reason - i.e. they like to get frank advice and not feel the pressure of having to buy a product due to the time spent by the adviser.
Nice words from a customer
Dear Mr. Tan,
My family have policies with Income and other insurance companies. We found that bonuses issued by Income was the most generous. In term of payment of premium and other matters, Income is the least pressurised. We are therefore fond of Income and wish that it is ever growing and consolidating.
In my view, banks that are charging 24% per annum are legalised loan shark. They have forgotten their social responsibility and what is reciprocating. Whereas Income had shown its sympathy and gave help during the difficult periods.
I wish that when you step down, Income will continue to administer by a good leader. Picking a right person is not an easy task and need time. I wish that you can start taking action now.
My family have policies with Income and other insurance companies. We found that bonuses issued by Income was the most generous. In term of payment of premium and other matters, Income is the least pressurised. We are therefore fond of Income and wish that it is ever growing and consolidating.
In my view, banks that are charging 24% per annum are legalised loan shark. They have forgotten their social responsibility and what is reciprocating. Whereas Income had shown its sympathy and gave help during the difficult periods.
I wish that when you step down, Income will continue to administer by a good leader. Picking a right person is not an easy task and need time. I wish that you can start taking action now.
Customer invest $130,000 in Flexi-Cash
Our consultant, who is a specialist in ILP, spoke to a customer and convinced him to come to Business Center. The customer presented a cheque for $130,000 to invest in our Flexi Cash. He intends to convert some of the cash into the investment fund at a later date.
Wednesday, June 28, 2006
Correction in global stockmarkets
VIEW FROM CHIEF INVESTMENT OFFICER, NTUC INCOME
Global stock markets corrected over the past two months due to concern for inflation and uncertainty in interest rates in the USA. The correction was more severe among the Asian markets than the USA and European markets.
Economic growth and corporate earnings are expected to slow in 2006 and 2007. There are concerns that higher interest rates could result in further deterioration in growth over the next two years.
We think the markets are fairly valued now after the correction. Expected growth of the global economies and company earnings is generally reasonable, and markets are more attractive now. It is premature to conclude that growth will slow significantly.
Investors have over-reacted to the concerns for inflation. The correction was exaggerated by selling and unwinding of leverage positions by hedge funds.
Global stock markets corrected over the past two months due to concern for inflation and uncertainty in interest rates in the USA. The correction was more severe among the Asian markets than the USA and European markets.
Economic growth and corporate earnings are expected to slow in 2006 and 2007. There are concerns that higher interest rates could result in further deterioration in growth over the next two years.
We think the markets are fairly valued now after the correction. Expected growth of the global economies and company earnings is generally reasonable, and markets are more attractive now. It is premature to conclude that growth will slow significantly.
Investors have over-reacted to the concerns for inflation. The correction was exaggerated by selling and unwinding of leverage positions by hedge funds.
Customer buys 5 policies after attending educational talk
A customer attended our educational talk on "Financial Tips for the Young". He came with his wife and children.
He decided to buy 4 Ideal plans (regular premium investment-linked plan) for his children. His wife also took up an Ideal plan. They were bought through his insurance adviser.
He is aware that these are investment plans, which are subject to investment risk. He became confident that "risk is an advantage" after attending the talk. Previously, he only had a motor insurance policy with us.
The adviser said that the customer:
- had attended several investment talks previously conducted by other speakers.
- was impressed and convinced by our CEO's explanation on ILPs
- liked the large fund size of %3.8 billions, invested in 900 counters.
- liked the performance of our Combined Fund since its inception
He is now considering to increase his insurance coverage, by level term plus a decreasing term rider.
He decided to buy 4 Ideal plans (regular premium investment-linked plan) for his children. His wife also took up an Ideal plan. They were bought through his insurance adviser.
He is aware that these are investment plans, which are subject to investment risk. He became confident that "risk is an advantage" after attending the talk. Previously, he only had a motor insurance policy with us.
The adviser said that the customer:
- had attended several investment talks previously conducted by other speakers.
- was impressed and convinced by our CEO's explanation on ILPs
- liked the large fund size of %3.8 billions, invested in 900 counters.
- liked the performance of our Combined Fund since its inception
He is now considering to increase his insurance coverage, by level term plus a decreasing term rider.
Tuesday, June 27, 2006
We provide warranty on replacement of windscreen
1. From customer
I have been insuring all my cars with INCOME since 1980s.
Last year, I brought my present car Toyota Altis and have no alternative to insure under AIG for one year till Apr 2006. I switched back to INCOME immediately the expiry.
My car windscreen was hit by a small stone with a small cracks and hair lines along TPE recently.
INCOME does not allow me to replace it at Toyota Workshop which may be too
expensive.
I have no objection for my windscreen to be replaced at your INCOME workshop
which could be cheaper ...
But my fear is, if after the 6-month warranty given by your authorized work, will INCOME continue to undertake the rest of windscreen warranty till the expiry of the Distributor 3 years warranty period for any water leakage.
2. My reply
Yes, we will take over the 3 year warranty on the windscreen. If you have any problem on this issue, you can bring it to the attention of my claim service manager. Thank you for switching over to NTUC Income.
3. Reply from customer
Very great to have your assurance.
Just to keep you update that I have replaced my windscreen at Tuffi @ Sin Ming this morning. They provided me with excellent service.
That is unreasonable for Toyota Motors to charge more than $900 for a change of windscreen. I will also update the members of the Toyota Club.
I have been insuring all my cars with INCOME since 1980s.
Last year, I brought my present car Toyota Altis and have no alternative to insure under AIG for one year till Apr 2006. I switched back to INCOME immediately the expiry.
My car windscreen was hit by a small stone with a small cracks and hair lines along TPE recently.
INCOME does not allow me to replace it at Toyota Workshop which may be too
expensive.
I have no objection for my windscreen to be replaced at your INCOME workshop
which could be cheaper ...
But my fear is, if after the 6-month warranty given by your authorized work, will INCOME continue to undertake the rest of windscreen warranty till the expiry of the Distributor 3 years warranty period for any water leakage.
2. My reply
Yes, we will take over the 3 year warranty on the windscreen. If you have any problem on this issue, you can bring it to the attention of my claim service manager. Thank you for switching over to NTUC Income.
3. Reply from customer
Very great to have your assurance.
Just to keep you update that I have replaced my windscreen at Tuffi @ Sin Ming this morning. They provided me with excellent service.
That is unreasonable for Toyota Motors to charge more than $900 for a change of windscreen. I will also update the members of the Toyota Club.
FAQ: Flexi-Link
Triple your savings, or more!
Earn up to $26,000 more, compared to similar plans in the market
1. Purpose
This plan is for a policyholder to invest a lump sum using the savings in the Central Provident Fund, Supplementary Retirement Scheme, or in a bank account or fixed deposit. The policyholder can also top up the investments at any time.
The attractive features are:
- 100% of the lump sum is invested
- the lump sum is invested in a large, well diversified fund, to earn an attractive return
- the charges are among the lowest in the market
- sum assured of 125% of the savings, or value of investments (if higher)
2. What is the expected return?
The savings can be invested in one of several funds operated by NTUC Income.
For example, a popular fund is the Combined Growth Fund. It comprises of $3,800 million of investments, is invested in 900 quality investments, and is managed by 9 top fund managers globally. The benchmark return of the fund during the past ten years is 6.5% per annum. The actual return during the first 3 years (2003 to 2005) was an average of 16% per annum.
Note:
- The future return is not guaranteed
- Past performance is not indicative of future return.
3. How much must I invest?
The initial investment must be at least $5,000. You can invest more, if you wish.
The invested sum is used to buy units of the investment fund at its prevailing price. The value of the units are expected to increase with the underlying value of the investments in the fund.
4. How much can I expect to get at the maturity date?
If you save $50,000, the projected amount (not guaranteed) at the end of 20 years is:
Assumed net return - after deducting the fund management fee (for illustration only)
Gain (estimated) - after deducting spread, policy fee and advisory fee
The projected amount is much higher than the return from traditional endowment or educational plans offered by life insurance companies.
If the policyholder (male at 30) pay a traditional endowment policy for the same premium, the guaranteed sum assured is $77,000 and the projected amount at maturity (not guaranteed) is $113,000.
5. Is there any life insurance cover?
In the event of death of the parent before age 60, the policy pays a sum assured of 125% of the invested sum (less withdrawals) or the value of the investments, whichever is higher. This cover is provided free of charge.
If you need additional cover, we recommend a decreating term assurance. If you insure for $50,000 over 20 years, the monthly premium is only $x,xx at entry age 30 and $x.x at 40.
6. Can I top up my investments?
You can top up your investments at any time, by making additional investments of at least $1,000.
7. Can I make withdrawal for emergency?
You can withdraw any amount from this plan, subject to a minimum of $500. There is no charge or penalty for the withdrawal. When you make a withdrawal, a certain number of units will be cancelled to provide this amount.
8. Is there a minimum investment period?
There is no minimum saving period. You can continue the savings plan for as long as you wish.
9. What are the charges?
The charges are among the lowest in the market:
- 3.5% spread between offer and bid price
- fund management fee of about 1% per annum
- initial fee of $100 when you set up the plan
- annual fee of $50 per policy (currently, waived for an investment above $15,000)
These modest charges are more than offset by the higher return that is likely to be earned by the investment fund.
They are much lower than similar plans available in the market. You can get a much better return from this plan.
10. Do all investment funds charge similar annual fee?
Most funds in the market charge an annual fee of 1.5% or 2% of the value of the investment. The combined fund from NTUC Income charge a lower fee of about 1% per annum.
A difference of 1% in annual fee, on an initial investment of $50,000, amounts to $26,000 at the end of 20 years (assuming an average return of 6% per annum). You can get $26,000 more, by investing in the combined fund.
11. Do all plans have the same spread between the bid and offer price?
Most investment linked plans in the market have a spread of 5%. The flexi-link plan from NTUC Income have have a lower spread of 3.5%. The difference of 1.5% on a lump sum of $50,000 mean that you get an additional $750 invested for you.
During our promotion, if you invest a larger amount, you can get bonus units credited to your investment. This gives more investment units to you. The bonus can be as high as 2%. This reduces the spread to as low as 1.5%.
12. Interested?
Call 6877 1111
Visit our Business Center at Bras Basah Road or Tampines Point.
Or see your insurance adviser.
End of FAQ
Earn up to $26,000 more, compared to similar plans in the market
1. Purpose
This plan is for a policyholder to invest a lump sum using the savings in the Central Provident Fund, Supplementary Retirement Scheme, or in a bank account or fixed deposit. The policyholder can also top up the investments at any time.
The attractive features are:
- 100% of the lump sum is invested
- the lump sum is invested in a large, well diversified fund, to earn an attractive return
- the charges are among the lowest in the market
- sum assured of 125% of the savings, or value of investments (if higher)
2. What is the expected return?
The savings can be invested in one of several funds operated by NTUC Income.
For example, a popular fund is the Combined Growth Fund. It comprises of $3,800 million of investments, is invested in 900 quality investments, and is managed by 9 top fund managers globally. The benchmark return of the fund during the past ten years is 6.5% per annum. The actual return during the first 3 years (2003 to 2005) was an average of 16% per annum.
Note:
- The future return is not guaranteed
- Past performance is not indicative of future return.
3. How much must I invest?
The initial investment must be at least $5,000. You can invest more, if you wish.
The invested sum is used to buy units of the investment fund at its prevailing price. The value of the units are expected to increase with the underlying value of the investments in the fund.
4. How much can I expect to get at the maturity date?
If you save $50,000, the projected amount (not guaranteed) at the end of 20 years is:
Assumed net return 5% p.a 7% p.a. 9% p.a.
Initial investment $50,000 $50,000 $50,000
Gain (estimated) $78,000 $136,000 $220,000
Projected amount $128,000 $186,000 $270,000
Assumed net return - after deducting the fund management fee (for illustration only)
Gain (estimated) - after deducting spread, policy fee and advisory fee
The projected amount is much higher than the return from traditional endowment or educational plans offered by life insurance companies.
If the policyholder (male at 30) pay a traditional endowment policy for the same premium, the guaranteed sum assured is $77,000 and the projected amount at maturity (not guaranteed) is $113,000.
5. Is there any life insurance cover?
In the event of death of the parent before age 60, the policy pays a sum assured of 125% of the invested sum (less withdrawals) or the value of the investments, whichever is higher. This cover is provided free of charge.
If you need additional cover, we recommend a decreating term assurance. If you insure for $50,000 over 20 years, the monthly premium is only $x,xx at entry age 30 and $x.x at 40.
6. Can I top up my investments?
You can top up your investments at any time, by making additional investments of at least $1,000.
7. Can I make withdrawal for emergency?
You can withdraw any amount from this plan, subject to a minimum of $500. There is no charge or penalty for the withdrawal. When you make a withdrawal, a certain number of units will be cancelled to provide this amount.
8. Is there a minimum investment period?
There is no minimum saving period. You can continue the savings plan for as long as you wish.
9. What are the charges?
The charges are among the lowest in the market:
- 3.5% spread between offer and bid price
- fund management fee of about 1% per annum
- initial fee of $100 when you set up the plan
- annual fee of $50 per policy (currently, waived for an investment above $15,000)
These modest charges are more than offset by the higher return that is likely to be earned by the investment fund.
They are much lower than similar plans available in the market. You can get a much better return from this plan.
10. Do all investment funds charge similar annual fee?
Most funds in the market charge an annual fee of 1.5% or 2% of the value of the investment. The combined fund from NTUC Income charge a lower fee of about 1% per annum.
A difference of 1% in annual fee, on an initial investment of $50,000, amounts to $26,000 at the end of 20 years (assuming an average return of 6% per annum). You can get $26,000 more, by investing in the combined fund.
11. Do all plans have the same spread between the bid and offer price?
Most investment linked plans in the market have a spread of 5%. The flexi-link plan from NTUC Income have have a lower spread of 3.5%. The difference of 1.5% on a lump sum of $50,000 mean that you get an additional $750 invested for you.
During our promotion, if you invest a larger amount, you can get bonus units credited to your investment. This gives more investment units to you. The bonus can be as high as 2%. This reduces the spread to as low as 1.5%.
12. Interested?
Call 6877 1111
Visit our Business Center at Bras Basah Road or Tampines Point.
Or see your insurance adviser.
End of FAQ
FAQ: Ideal Plan
Triple your savings, or more!
Earn up to $32,000 more, compared to similar plans in the market
1. Purpose
This plan is for a young person to save for future needs. The attractive features are:
- 100% of savings invested (except for advisory fee of 15% of premium for first 3 years)
- savings is invested in a large, well diversified fund, to earn an attractive return
- the charges are among the lowest in the market
- sum assured of 5 years of savings, or value of investments (if higher)
2. What is the expected return?
The savings can be invested in one of several funds operated by NTUC Income.
For example, a popular fund is the Combined Growth Fund. It comprises of $3,800 million of investments, is invested in 900 quality investments, and is managed by 9 top fund managers globally. The benchmark return of the fund during the past ten years is 6.5% per annum. The actual return during the first 3 years (2003 to 2005) was an average of 16% per annum.
Note:
- The future return is not guaranteed
- Past performance is not indicative of future return.
3. How much must I save?
You have to save a minimum of $100 a month. You can save more, if you wish.
The savings is used to buy units of the investment fund at its prevailing price. The value of the units are expected to increase with the underlying value of the investments in the fund.
4. How much can I expect to get at the maturity date?
If you save $200 a month, the projected amount (not guaranteed) at the end of 30 years is:
Assumed net return - after deducting management fee: for illustration only
Gain (estimated) - after deducting spread, policy fee and advisory fee
The projected amount is much higher than the return from traditional endowment or educational plans offered by life insurance companies.
If the policyholder (male at 30) pay a traditional endowment policy for the same premium, the guaranteed sum assured is $xxx,000 and the projected amount at maturity (not guaratneed) is $xxx,000.
5. Is there any life insurance cover?
In the event of death of the parent before age 60, the policy pays a sum assured of 5 years of savings or the value of the investments, whichever is higher. This cover is provided free of charge.
If you need additional cover, we recommend a decreasing term insurance rider. If you insure for $72,000 decreasing over 30 years, the monthly premium is only $xx at entry age 30 and $xx at 35.
6. Can I change my savings?
You have the following options:
- to increase or reduce your regular savings
- to stop your savings temporarily
- to top up your savings
7. Can I make withdrawal for emergency?
You can withdraw any amount from this plan, subject to a minimum of $500. There is no charge or penalty for the withdrawal. When you make a withdrawal, a certain number of units will be cancelled to provide this amount.
8. Is there a minimum saving period?
There is no minimum saving period. You can continue the savings plan for as long as you wish.
However, if you terminate the plan during the first 3 years, the remaing installment of the advisory fee will be deducted from the cash value.
9. What are the charges?
The charges are among the lowest in the market:
- 3.5% spread between offer and bid price
- fund management fee of about 1% on value of investment
- annual fee of $50 per policy
- advisory fee of 15% of premium for first 3 years
These modest charges are more than offset by the higher return that is likely to be earned by the investment f und.
They are much lower than similar plans available in the market. You can get a much better return from this plan.
10. Do all investment funds charge similar annual fee?
Most funds in the market charge an annual fee of 1.5% or 2% of the value of the investment. The combined fund from NTUC Income charge a lower fee of about 1% per annum.
A difference of 1% in annual fee, on a monthly savings of $200, amounts to $32,000 at the end of 30 years (assuming an average return of 6% per annum). You can get $32,000 more, by investing in the combined fund.
11. Do all investment linked plans have similar upfront fee?
Most investment linked plans in the market have a upfront fee of about 19 months of premium. The ideal plan from NTUC Income have have a lower fee of about 7 months of premium (represented by the advisory fee and other charges).
The difference of 12 months, on a monthly saving of $200, amount to $14,000 at the end of 30 years (assuming an average return of 6% per annum). You can get $14,000 more, by investing through our ideal plan.
12. Interested?
Call 6788 1111
Visit our Business Center at Bras Basah Road or Tampines Point.
Or see your insurance adviser.
End of FAQ
Earn up to $32,000 more, compared to similar plans in the market
1. Purpose
This plan is for a young person to save for future needs. The attractive features are:
- 100% of savings invested (except for advisory fee of 15% of premium for first 3 years)
- savings is invested in a large, well diversified fund, to earn an attractive return
- the charges are among the lowest in the market
- sum assured of 5 years of savings, or value of investments (if higher)
2. What is the expected return?
The savings can be invested in one of several funds operated by NTUC Income.
For example, a popular fund is the Combined Growth Fund. It comprises of $3,800 million of investments, is invested in 900 quality investments, and is managed by 9 top fund managers globally. The benchmark return of the fund during the past ten years is 6.5% per annum. The actual return during the first 3 years (2003 to 2005) was an average of 16% per annum.
Note:
- The future return is not guaranteed
- Past performance is not indicative of future return.
3. How much must I save?
You have to save a minimum of $100 a month. You can save more, if you wish.
The savings is used to buy units of the investment fund at its prevailing price. The value of the units are expected to increase with the underlying value of the investments in the fund.
4. How much can I expect to get at the maturity date?
If you save $200 a month, the projected amount (not guaranteed) at the end of 30 years is:
Assumed net return 5% p.a 7% p.a. 9% p.a.
Total savings $72,000 $72,000 $72,000
Gain (estimated) $77,900 $141,800 $237,700
Projected amount $149,900 $213,800 $309,700
Assumed net return - after deducting management fee: for illustration only
Gain (estimated) - after deducting spread, policy fee and advisory fee
The projected amount is much higher than the return from traditional endowment or educational plans offered by life insurance companies.
If the policyholder (male at 30) pay a traditional endowment policy for the same premium, the guaranteed sum assured is $xxx,000 and the projected amount at maturity (not guaratneed) is $xxx,000.
5. Is there any life insurance cover?
In the event of death of the parent before age 60, the policy pays a sum assured of 5 years of savings or the value of the investments, whichever is higher. This cover is provided free of charge.
If you need additional cover, we recommend a decreasing term insurance rider. If you insure for $72,000 decreasing over 30 years, the monthly premium is only $xx at entry age 30 and $xx at 35.
6. Can I change my savings?
You have the following options:
- to increase or reduce your regular savings
- to stop your savings temporarily
- to top up your savings
7. Can I make withdrawal for emergency?
You can withdraw any amount from this plan, subject to a minimum of $500. There is no charge or penalty for the withdrawal. When you make a withdrawal, a certain number of units will be cancelled to provide this amount.
8. Is there a minimum saving period?
There is no minimum saving period. You can continue the savings plan for as long as you wish.
However, if you terminate the plan during the first 3 years, the remaing installment of the advisory fee will be deducted from the cash value.
9. What are the charges?
The charges are among the lowest in the market:
- 3.5% spread between offer and bid price
- fund management fee of about 1% on value of investment
- annual fee of $50 per policy
- advisory fee of 15% of premium for first 3 years
These modest charges are more than offset by the higher return that is likely to be earned by the investment f und.
They are much lower than similar plans available in the market. You can get a much better return from this plan.
10. Do all investment funds charge similar annual fee?
Most funds in the market charge an annual fee of 1.5% or 2% of the value of the investment. The combined fund from NTUC Income charge a lower fee of about 1% per annum.
A difference of 1% in annual fee, on a monthly savings of $200, amounts to $32,000 at the end of 30 years (assuming an average return of 6% per annum). You can get $32,000 more, by investing in the combined fund.
11. Do all investment linked plans have similar upfront fee?
Most investment linked plans in the market have a upfront fee of about 19 months of premium. The ideal plan from NTUC Income have have a lower fee of about 7 months of premium (represented by the advisory fee and other charges).
The difference of 12 months, on a monthly saving of $200, amount to $14,000 at the end of 30 years (assuming an average return of 6% per annum). You can get $14,000 more, by investing through our ideal plan.
12. Interested?
Call 6788 1111
Visit our Business Center at Bras Basah Road or Tampines Point.
Or see your insurance adviser.
End of FAQ
Monday, June 26, 2006
Ang Mo Kio Auto-Point
I visited Ang Mo Kio Auto-Point last Friday. Several workshops in this center from a business group to tender for the repair of motor cars for our customers.
I was very impressed with the following:
- the participating workshops were able to work together in cooperation
- they focused on quality assurance and customer service
- they submit competitive tenders and win about 5 repairs a day
- they meet our standard of repair quality and customer satisfaction
- they were proud to be a quality workshop under NTUC Income
I am glad that our tender system is able to help these small workshops (which are owned by small proprietors) to get a steady source of business. They can make an honest profit and are able to provide quality repair.
I was very impressed with the following:
- the participating workshops were able to work together in cooperation
- they focused on quality assurance and customer service
- they submit competitive tenders and win about 5 repairs a day
- they meet our standard of repair quality and customer satisfaction
- they were proud to be a quality workshop under NTUC Income
I am glad that our tender system is able to help these small workshops (which are owned by small proprietors) to get a steady source of business. They can make an honest profit and are able to provide quality repair.
You can take a loan on our investment-linked plan
NTUC Income allows a loan to be taken against our ILP plan. Other insurers do not allow this option. They insist that the policyholder should surrender the units, if they wish to withdraw cash.
Why?
Perhaps, the other insurer wish the policyholder to surrender, and to re-invest at a later date. The policyholder has to pay the spread of 5% again. It will cost 5% to the policyholder
NTUC Income's practice is more favourable to the policyholder. Here are the terms of our loan on ILP policy:
1. We allow a loan of up to 50% of the cash value.
2. We will ask the policyholder to make partial payment, if the loan reaches 70% of the cash value, so that there is always a 30% margin. The repayment can be done by partial surrender of the units.
3. Interest rate is at the same rate as for traditional policy, ie 5.5% per annum.
Why?
Perhaps, the other insurer wish the policyholder to surrender, and to re-invest at a later date. The policyholder has to pay the spread of 5% again. It will cost 5% to the policyholder
NTUC Income's practice is more favourable to the policyholder. Here are the terms of our loan on ILP policy:
1. We allow a loan of up to 50% of the cash value.
2. We will ask the policyholder to make partial payment, if the loan reaches 70% of the cash value, so that there is always a 30% margin. The repayment can be done by partial surrender of the units.
3. Interest rate is at the same rate as for traditional policy, ie 5.5% per annum.
Practice to be a Logic9 champion
NTUC Income will launch this interesting game in a special website by early July.
You can practice at our website to be a champion in Logic9 (also known as Sudoku). This game is a craze around the world.
This game is good for children to practice their mathemathics and logic, and also for older folks to keep their mind alert!
You can register a personal account. You can practice through 5 levels, from "very easy" to "complex". You will get hints and tips to guide you.
When you can complete a complex puzzle within the time limit, you will become a champion. You will get a certificate, and be invited to participate in national competition!
We may even organise international competitions!
Tentative website: www.logic9.com.sg
You can practice at our website to be a champion in Logic9 (also known as Sudoku). This game is a craze around the world.
This game is good for children to practice their mathemathics and logic, and also for older folks to keep their mind alert!
You can register a personal account. You can practice through 5 levels, from "very easy" to "complex". You will get hints and tips to guide you.
When you can complete a complex puzzle within the time limit, you will become a champion. You will get a certificate, and be invited to participate in national competition!
We may even organise international competitions!
Tentative website: www.logic9.com.sg
Sunday, June 25, 2006
Stolen Car was recovered through tracking device
A policyholder installed a car tracking device in his new Toyota Wish car under a 4-year installment scheme promoted by NTUC Income.
On 25 June, he reported that his car was stolen in Johore Bahru.
Within 5 minutes, the car tracking service was able to pinpoint the car location at a specific place in Skudai, Johor. The Skudai police was alerted. They immediately dispatched several policemen to the location and recovered the car. One car thief was also caught.
On arrival, the owner found that the car thieves have disabled the usual security devices, but they were not able to locate the tracker which was installed at a hidden place in the car.
The owner enjoyed a significant discount in his insurance premium, by installing the tracking device. He also had the satisfaction of seeing the recovery of his car. He avoids the hassle of making a theft claim, which can take a few weeks to settle.
On 25 June, he reported that his car was stolen in Johore Bahru.
Within 5 minutes, the car tracking service was able to pinpoint the car location at a specific place in Skudai, Johor. The Skudai police was alerted. They immediately dispatched several policemen to the location and recovered the car. One car thief was also caught.
On arrival, the owner found that the car thieves have disabled the usual security devices, but they were not able to locate the tracker which was installed at a hidden place in the car.
The owner enjoyed a significant discount in his insurance premium, by installing the tracking device. He also had the satisfaction of seeing the recovery of his car. He avoids the hassle of making a theft claim, which can take a few weeks to settle.
Align interest of fund manager and investors
Some fund managers claim that they align their interest with the investors by taking a share of the performance of the fund. This gives them the incentive to work hard and make the fund perform well.
This observation applies mainly to funds that have high performance fees, such as REITs, business trusts, hedge funds, quant funds and private equity funds. It also applies to companies that grant stock options with striking prices that are equal or just slightly above the current market price.
Do not be "taken in" by this statement.
For a fund manager to make this claim, they should be prepared to take a basic fee that is much lower than the market.
For example, the manager of a private equity fund usually charge an annual fee of 2% to 3% of the assets under management.
If the fund manager is "aligned", the manager should be prepared to charge a lower basic fee (e.g. 1%) and take a share of the gain in excess a hurdle rate.
For example, the performance fee can be 20% of the earnings of the fund, in excess of the hurdle rate of 6%. In this case, if the fund earns 10%, the fund manager will get 20% of 4%, ie an additonal 0.8%, as performance fee. This is additional to the basic fee of 1%.
If the fund earns less than the hurdle rate, the fund manager takes only the basic fee, which is lower than the market. In this way, the fund manager is "aligned".
If the fund manager wants to earn the usual fee and a large perfomance fee, the fund manager is "greedy" and not "aligned".
This observation applies mainly to funds that have high performance fees, such as REITs, business trusts, hedge funds, quant funds and private equity funds. It also applies to companies that grant stock options with striking prices that are equal or just slightly above the current market price.
Do not be "taken in" by this statement.
For a fund manager to make this claim, they should be prepared to take a basic fee that is much lower than the market.
For example, the manager of a private equity fund usually charge an annual fee of 2% to 3% of the assets under management.
If the fund manager is "aligned", the manager should be prepared to charge a lower basic fee (e.g. 1%) and take a share of the gain in excess a hurdle rate.
For example, the performance fee can be 20% of the earnings of the fund, in excess of the hurdle rate of 6%. In this case, if the fund earns 10%, the fund manager will get 20% of 4%, ie an additonal 0.8%, as performance fee. This is additional to the basic fee of 1%.
If the fund earns less than the hurdle rate, the fund manager takes only the basic fee, which is lower than the market. In this way, the fund manager is "aligned".
If the fund manager wants to earn the usual fee and a large perfomance fee, the fund manager is "greedy" and not "aligned".
Send an e-mail to me
If you have any specific question that need my answer, please send an e-mail directly to me at tankl@income.coop. I find it difficult to reply to comments that are posted in my blog.
Letter to annuitants
24 June 2006
Editor
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
NTUC Income
Editor
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
NTUC Income
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