Policies with high terminal bonuses

Hi Mr Tan,

I heard about your collective protest on the recent changes in Income's bonus structure. I am not a par fund policyholder but I principally do not agree with such bonus structures in the market. They have the risks of investment-linked plans but do not offer the transparency and much value to policyholders.

I have managed to collate some simple statistics from MAS returns on fund solvency and investment allocations, which may help you build your case. We can clearly see that those companies using the "terminal bonus" strategy has very high solvency ratios, yet I wonder why they do not invest more in equities or vest more of the returns on their policyholders?

Hope it helps. Good luck.

T