Dear Mr Tan,
Recently I asked my friend to send me a quotation on income's vivolife policy.
Something that I don't really understand is the "terminal bonus" shown. On page 9, it showed the duration and the percentage of terminal bonuses for the years 2008 - 2010. What I don't understand is a percentage of what? A percentage of the reversionary bonus that had been declared thru'out the years or a percentage of the sum assured per $1,000?
Is the reversionary bonuses that is declared annually same amount for both death and surrendered portion? What I meant is that if for example, year 2010, the insurance company declared $7 per $1000 S.A for this particular policy. Regardless of if I were to surrender or make a claim, the bonus that is still payable in whichever situation is still $7 per $1,000 S.A.
If the above hold truths, then in the B.I of the attached, at year 40, at projected 5.25%, why is there a difference of about $40,000 in the total, when the difference in the guaranteed payout of death and surrender, respectively is about $20,000 difference?
Looking at the surrender terminal bonses and the death terminal bonuses for both 31 - 45 years, the terminal bonuses is shown at 186% - 212% .
REPLY
Please direct your question to the agent who is selling the policy to you, or to the management of NTUC Income.
I do not wish to spend time explaining this type of complicated matters, when it is the duty of the people who create the product to make the explanation. I only advice people to avoid buying any product that they do not understand.
Recently I asked my friend to send me a quotation on income's vivolife policy.
Something that I don't really understand is the "terminal bonus" shown. On page 9, it showed the duration and the percentage of terminal bonuses for the years 2008 - 2010. What I don't understand is a percentage of what? A percentage of the reversionary bonus that had been declared thru'out the years or a percentage of the sum assured per $1,000?
Is the reversionary bonuses that is declared annually same amount for both death and surrendered portion? What I meant is that if for example, year 2010, the insurance company declared $7 per $1000 S.A for this particular policy. Regardless of if I were to surrender or make a claim, the bonus that is still payable in whichever situation is still $7 per $1,000 S.A.
If the above hold truths, then in the B.I of the attached, at year 40, at projected 5.25%, why is there a difference of about $40,000 in the total, when the difference in the guaranteed payout of death and surrender, respectively is about $20,000 difference?
Looking at the surrender terminal bonses and the death terminal bonuses for both 31 - 45 years, the terminal bonuses is shown at 186% - 212% .
REPLY
Please direct your question to the agent who is selling the policy to you, or to the management of NTUC Income.
I do not wish to spend time explaining this type of complicated matters, when it is the duty of the people who create the product to make the explanation. I only advice people to avoid buying any product that they do not understand.
Terminal bonus is percentage of accumulated annual bonuses. You need to hold the policy for certain number of years before you die or surrender in order to get the terminal bonus. The longer you hold the bigger the terminal bonus.
ReplyDeleteTerminal bonus rates are also not guaranteed. Company can slash the rates by half, or to 0% also can.
I'm just a layman and can tell you this. If NTUC people cannot tell you, then they are hopeless. You sure you want to buy from them?!
During TKL time, NTUC give fair and high annual bonus. No such crap as terminal bonus. Now they pay you crap 0.7% annual bonus and give hot air promise of 300% terminal bonus if you hold until you are 90 yrs old.
The BI difference is becoz one is death, and the other is surrender. Vivolife uses part of your premium to buy term insurance, that's why there's a guaranteed death amount. For surrender, it depends totally on how well the performance of the insurance par fund over the years. Also for surrender, there's a higher build-in penalty.
You don't seem to know how to analyse the BI too well. Better don't jump in just like that.
Btw, if you calculate the yield (internal rate of return) for Vivolife, it will be less than 3% even if you wait until 70 yrs old to surrender. Less than inflation. And this is using the figures under the optimistic 5.25% returns for par fund. So your actual returns may be even less than 3%.
VivoCare yield is even worse --- half of Vivolife, about 1.6%pa.
And worse of all, the sum assured for both Vivolife and Vivocare definitely not sufficient if you have dependants.
But hey, it's your money.
Friends, ban this type of products from your life and you will live a happy life because you don't get rip off by your so called trusted agents.You trust your salesman disguised as financial consultant tooo much.To protect yourself against them is to avoid them completely. It is NO LOSS because they WON"T recommend you products that will meet your needs at low cost and yet adequately.They only ' recommend' products that earn them commission that can qualify for incentive overseas trips and give high APIs to make their company #1. You think they care for you? Wake up...they only care for their pocket and big bonuses for everyone including the senior management. Don't be a fool. Wake up from your coma.
ReplyDeleteYou know their latest revocare that supposedly pay out at early stage of the cancer? Don't be idiot to beleive your trusted salesman. Go ask ANY doctor what is the probability/chance of discovering an early stage cancer.
9 out of 10 will tell you.....almost ZERO; one will tell it is only about 0.05% chance.
There are only 3 companies peddling this type of product. WHY? these companies might have some conscience!!!!!!tooo obvious, hor. Morbid and scary pictures don't scare anymore. Use your head NOT emotion.
The objective of making products complicated so that customers can be sold by a middleman who can employ all conning skills to CONvince the customers.
ReplyDeleteI'm sorry that even if you asked your agent friend, they probably cannot answer your qns.
ReplyDeleteBonuses:
Annual Bonus - RB on SA
Compounded on - RB on RB
Terminal Bonus - TB on accrued RB
RB once declared is yours. On claim, you get the full amount. On surrender, you get the present value of the RB at maturity (FV). How they calculate is kept to themselves (Insurers), it's surely lesser, or very much lesser.
Income RB is 7/1000 SA??,lol.
Means if your SA is 100K, the RB is 700 (upon claim or maturity)
Claim you get 700, surrender you get the PV of 700, which will be lesser.
TB varies with Insurers and policies. Some only have TB after a number of yrs. Some with longer term policies, higher TB.
Usually TB for surrender is lesser than claim.
Hope this helps.
(how did you come out with these qns, very few ppl will even know what they are looking at)
Regards
Micky Neo
Resale Endowment
www.repsholdings.com.sg
Mickey,
ReplyDeletethat is why these insurance agents are cheats,. They dare to advise on a product they don't even know thoroughly. How can they give the BEST advice? How can they put the customers' interest first? How can customers make an informed decision? it is rubbish , right? They con the customers into buying rubbish products that earn them high commission. This is the reason. Anyway they can spend the ill-gotten commission in 18 level hell.
Insurance agents are renamed as Financial Advisers, Consultant. Is holistic financial planning limited to just a few shield plans, whole life, ILP? Tied agents are even more limited to their own in house products. They are just representative of their company sales products.
ReplyDeleteWhat can they do, they are sales ppl, their income only from selling products.
It's how the business is run. Banks are distributing insurance products, and not the best we know of, post office too?? distribution channel they called. Pretty young things to attend to you, but the crowd like it.
We probably are on our own, know what you want, and what you dun want, can make better decision.
Micky
Mickey,
ReplyDeletewould you want to earn a living by living at the expense of others' misery?
Do you want to call yourself a financial consultant when you are NOT financial expert when actually you are salesman, and worse a conman?
This is what is happening in the industry. Salesmen passing themselves off as financial consultants to con people.