Monday, September 03, 2007

Whole life and endowment policies sold by NTUC Income

Dear Mr Tan

I read your blog form some time. You now advise consumers to avoid the insurance products with high charges, such as endowment and whole life plans.

During the years that you were in NTUC, your agents actively sold these products. Were these products costly for customers?

REPLY:

The commissions paid to the agents on the life insurance products from NTUC Income were about 40% lower than the market.

The premiums were lower, the cash values were higher, and the return on maturity were about 10% to 15% better than similar products in the market.

Most of the products marketed by NTUC Income in the past gave reasonably good value to the consumers. They were much better than similar products offered by other insurance companies.

The conditions have changed today. I now recommend consumers to invest in low cost, diversified investment funds that give a better long term return. Read my FAQ in www.tankinlian.com/faq.
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2 comments:

Anonymous said...

Today endowment and wholelife products are poor performers because of low interest rate and high distribution costs and they are bad vehicles to use for investment and for accumulation for any long term goals. Over long term both these kinds of products can only return 3% to 4% which barely beat inflation. Wealth is never created this way .
For low and middle income higher rate of return is necessary to make your hard earned money work harder otherwise 20 years down the road whatever you accumulated has the same purchasing power as it was 20 years ago.There is no improvement in real term.Your risk averseness must change. There is a necessity to take risk to get out of the poverty trap when you have the capacity.
That is the reason why you are often urged to look for good adviser to help you and not insurance salesman. An adviser who is skillful in investment can help to design a portfolio that eliminates risk over time and yet gives a decent return for you, at least 6% to 8%.
What Mr. Tan is advising is in good faith. After all he spent more than 30 years in this business and he knows what he is talking about.
Time has changed. What was good is not good today anymore.
I hope Mr. Tan's well meaning advice will be heeded.

September 03, 2007 11:40 PM
Anonymous said...

Yes, I have always admired Mr. Tan Kin Lian's honesty and transparency. NTUC Income under him was very much a compassionate and honest insurance agency. Guess the the company is a reflection of the CEO's attributes. Times have indeed changed. Look at NTUC Income today, I saw the report about a primary school teacher who ended up saddled with a 45,000 dollar penalty and NTUC Income spokesman saying the he had had "ample time" to make payment. In the past I often hear of NTUC Income helping the people in various ways but now I often hear news reports of NTUC Income losing court battles with policyholders and even their own agents. Time has indeed change. Let us beware of what we are buying into nowadays. This gives NTUC a bad name.

September 08, 2007 5:22 PM

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