Mr Tan,
When you were CEO of NTUC Income, you actively promoted the Living policy. It was the best selling policy for many years. Why did you promote this plan, when the charges are high (as you said now in your blog) ?
REPLY
The Living policy was launched about 20 years ago (if I remember correctly). During that time and for many years after, it offered fairly good value to the customer, as the charges were much lower than similar plans offered by other insurance companies.
During those years, the alternative of investing in investment funds was not well developed.
Today, the market for investment funds is well developed. It is now better for customers to invest in the Combined Fund from NTUC Income and the STI Exchange Traded Fund. They have fairly low charges and the potential to give a higher long term return.
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
Mr Tan,
ReplyDeleteAlthough Living was launched some 20 years ago, it was being sold till you left, in Feb 2007. Had it been the case 20 years ago, I agree with you there were less choices. But in the 2000s, when you were the CEO, you had the choice to offer only term and ILP. In my personal opinion, you are presenting a half-truth. No offense.
When NTUC Income launched the Combined Fund in 2003, my focus was to promote the Combined Fund through the Flexi Link plan. It was a low cost fund. The Term insurance was bought separately.
ReplyDeleteThis was advertised widely, and was promoted through the educational talks.
Some agents prefer to sell Living and other tradtional policies. There are other reasons for this choice, and it is not just related to commission.
There will be separate markets for different types of customers.
Living plan taken up long time ago is better than the current plans in term of premium and return. But I guess time has changed. Interest rate changed, management has changed, insurance agents changed, they are only interested in more commission ,cost has changed upwards with new management engaging expensive personnel.The building has changed, look posher. Unnecessary renovations? No need money? Where to get the money? Aiya, policyholders' life fund $17 billions, lor.Policyholders also dono.What do you expect of the living policy then ? Of course it is more expensive, less coverage and less return.
ReplyDeleteLimited premium plan is even worst.
They call this plan LPPL. I call it limited coverage plan. Most of your money goes to pay the agents and not your coverage. Don't be fooled by this type of plan. By the time you finished paying it is also the time for you to cancel the plan because you don't need it any more and it is also very expensive.The company knows about this. They know people never hold to this age.What life time? Maybe life revenue for company and agents.
There are better ways to cover your worries of critical illness and much cheaper.
So for those who have bought the Living policy 15 years ago, is it still good value now? Should one surrender the living policies bought then or should continue to hold? Anyone have any suggestions?
ReplyDeleteThe living plan taken 15 years ago is a good plan. But before you surrender or do anything speak to your adviser and get him to assess your current situation.What you have provided is insufficient info. Another important thing is to make sure you get the right adviser who is honest, qualified and with your interest at heart.This is important because you may get a salesman who is going to exploit your circumstances and worsen your life.
ReplyDeleteMy adviser does not even know how to use the financial calculator so how I can I consult her for financial advice? Anyway, based on what has been said so far about living policies, should one give up the living policies that was bought about 15 years ago?
ReplyDeleteFinancial consultant doesn't know how to use the financial calculator?
ReplyDeleteShe must be a saleswoman. Don't buy from the saleswoman because she depends on her charm to get you to buy.
You can keep the living plan until it is useless. When? when you are free from responsibility, from dependents,
from money.