Comparing yields on policies taken from two insurers

Dear Mr. Tan

I wish to seek your advice as to whether I am getting a fair share of the maturity sums I obtained from two policies maturing with two different companies.

For a 25 year term endowment policy with sum assured of $15,000 with AIA, I was paid the maturity sum of $30,271.95 which was $5,233.05 short of the projected amount in their original quotation when the policy was first taken up in 1983. On my appeal, they paid a further $2,469.63 making it a total of $32,741.58.

As for the NTUC Income Education Policy with a sum assured of $10,000 for a 20 year term, I was paid the maturity sum of $19,432.50 which was $2,137.50 short of the projected amount in their original quotation first taken up in 1988.

I have appealed to NTUC Income to pay the sum as projected originally but they have rejected this. They did not exercise understanding and flexibility as did AIA.

What I cannot understand is its agents have been telling Singaporeans that they charge lower premium and makes higher payout mainly becaused NTUC Income is a co-operative as against commercial Insurance companies like AIA, Prudential and Great Eastern. Instead, I now find AIA to be more compassionate, understanding and flexible while NTUC Income does not even bother to consider my appeal.

I seek your kind understanding and assistance on this matter. Hope you can advise whether what NTUC Income claims about giving me a better yield as compared to AIA is true.


REPLY

The yield on the AIA policy is 4.69% p.a. (25 years) and the yield on the Income policy s 5.44% (20 years). The yield from Income is better than AIA, although the policy was taken for a shorter period. In both cases, the yield has been satisfactory, as you get more thn 4.5% p.a.

AIA
25 year policy,
Premium: $57 monthly
Maturity benefit: $32,742
Yield 4.69% p.a.

Income
20 year polcy
Premium: $44.30
Maturity benefit: $19433
Yield 5.44% p.a.