Dear Mr Tan,
I am a regular visitor to your blog, which I find it quite informative. You have been advocating "Buy Term and Invest the rest".
Are you also saying that there is no need for one to buy whole life or endowment policies as they do not yield better returns?
If I extrapolate, does it mean that on hindsight, when you were CEO of Income, products such as Living Policies should not have been sold? I hope to see your response to this issue in your blog.
1. NTUC Income launched its Combined Funds in 2003. I have been actively promoting these products under its Flexi-Link and Ideal plans. These investment products have low charges and give good value to the policyholder. The insurance protection can be bought seprately through term insurance. Most of my personal savings are in these products.
2. The Endowment and Living policies from NTUC Income give a fairly satisfactory return ,due to lower commission rates,. The return is higher than similar products from other insurance companies. They are suitable for policyholders who prefer to have the discipline of regular savings.
3. For most young people, who needs flexibility in their savings, "buy term and invest the difference" is a better choice. The investment should be made in large, well diversified, low cost funds. The Combined Fund from NTUC Income meet this criteria. Another option is the STI Exchange Traded Fund.
4. I have always upheld the principle that a insurance product must be designed to give a fair return to the policyholder, while leaving a fair margin to pay the expenses to market and manage the product. During my tenure, I kept the expense low, so that the policyholders can get a fairly attractive return for their long term savings.
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