Lifestyle funds

Some fund managers advocate investing in lifestyle funds. For example:

- for young investors: high proportion of equities
- for older investors: high proportion of bonds

In my view, if the investment is for retirement needs, it is better to invest in equities, even for older people.

If you are now 60, the average lifespan is 20 years. If you draw down your retirement funds in monthly instalments, the average duration of your investments is more than 10 years. So, an equity fund is quite suitable.

When you reach age 70, you can consider to move some of the investments into a bond fund. At that time, you should choose the right time to make a switch. The stockmarket goes in cycles of 3 to 5 years. If you choose the right time during this cycle, you can get an attractive return.

Alternatively, you can cash out and invest in a life annuity.

Create a flexible annuity

Here is a simple way to create your own flexible annuity.

Invest your savings in a global equity fund. It should earn you between 6% to 8% per annum over the long term.

You can make a regular withdrawal of your investments, representing 6% to 10% of your principal.

Assume you invest $500,000 and you wish to withdraw 6%, ie $30,000 a year or $2,500 a month.

If your investments earn 6% or more, you capital will not deplete. In fact, it may grow after allowing for your withdrawal.

If you draw out more than the amount earned, your capital may reduce gradually. But if the excess withdrawal is small, the capital can last for a lifetime.

On death, there is a balance of the capital that can be distributed to your family.

You can have the flexibility to draw out a larger or smaller monthly sum to meet y our needs. You can also draw out an once off amount to meet medical expenses or for a vacation.

At any time, you can calculate how long your capital will last. You can make sure that it will last until you reach (say) 100 years old.

The Flexi-Link plan from NTUC Income allows you to specify a monthly withdrawal from your investments. It also allow you the change the amount.

Choose a low cost fund and earn $55,000 more!

Some equity funds charge an annual fee of 1%. Some charge 1.5% or even 2%. In some cases, the financial adviser charge a separate layer of fee (say 0.5%) in additional to the fee charged by the fund.

If you invest $100,000 for 20 years, the difference of 1% in annual fee can amount to $55,400. Here is how it works out.

Assume that the average yield on the fund is 7%.

If the net yield is 6% (ie deduct 1% fee), you will get $320,700.
If the net yield is 5% (ie deduct 2% fee), you will get $265,300.
The difference is $55,400.

Wow! That is a lot of money!

Is there a difference in the quality of fund managers?

If you invest in a large, well diversified and properly managed fund, the different funds should earn nearly the same yield over a long period. The higher fee goes to increase profits for shareholders.

So, take my advice. Choose a fund that charges an annual fee of 1% (instead of 2%).

-----------------------

Here are the figures available from the website: www.askdrmoney.com

Best ILP (single premium)
Average Expense Ratio of equity fund

NTUC Income    1.0%
Company G      1.4 %
Company P      1.5 %
Company A      1.9 %
Other insurers 1.7%-2.2%

Flexi-Cash gets good response

I posted some details of an innovative new plan, called Flexi Cash. I received 3 e-mails from readers of my blog within one day. They were interested to find our more details. Wow!

Actually, the Flexi Cash plan will only be available from 1 June 2006. But, as there is strong interest, I shall try to speed it up.

Some details will appear soon in the website www.income.coop. If you are interested, you can register your name at the website. We will come back to you as soon as the details are ready.

Tips for the Young: Educational Talks

Learn about Tips for the Young.
The tips will be worth more than $20,000
Can be as much as $150,000!

Talks will be held on:

9 May
13 May
27 May

Call 6788 3366 (Act now - it is your financial future!)

Flexi-Cash: Earn 3% or more for your savings (low risk)

NOTE: This is a preliminary announcement. This product
is targetted to be available by 1 Jun3 2006. More
details will be provided later.

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An innovate plan from NTUC Income.
Allows you to earn an attractive rate of interest.
Currently, around 3% per annum.

The interest rate will adjust according to the market.
You can earn more, as interest rate is expected to increase.
Very low risk - as the fund is invested in interbank and well rated floating rate notes.
No lock-in period - can withdraw at any time, without penalty.

Footnote:
The return will be based on the money market fund, less 0.25% p.a
Initial spread of only 0.1% (during launch promotion)
Minimum investment of $5,000

Tip for the Young: You can get $48,000 more

You can get $48,000 more by investing in a fund with low charges. So pay attention.

You should invest in a large, well diversified fund, and for the long term. This allows you get an attractive rate of return.

You should choose a fund fund that charges you 1% per annum or less. Most funds have charges that amount to 1.5% or 2% per annum. Some funds have double layer of charges that can take away 2% or more.

If your fund earns an average of 7% per annum (before charges), and the fund charge is 1%, you will get a net return of 6%. If the fund charge is 2%, you get a net return of 5%.

What is the difference?

Assume that you save $300 per month over 30 years. The total saving is $108,000.

If the net return of 6% (ie 1% charge), your total amount will be $294,000. If the net return of 5% (ie 2% charge), your total amount will be $246,000. The difference is $48,000.

You can get $48,000 more, just by choosing a low charge fund. The gross earnings in both fund should be the same, as they are large, well diversified and managed by good fund managers.

Why do some funds charge 2%? They want to make more profit for their shareholders. So they pay less to the investors.

Look at the comparison in this website:
http://www.askdrmoney.com/Ins_ILP_SP.htm

Who provies a low cost fund of 1%? NTUC Income!

Tip for the Young: This tip is worth at least $20,000

This tip is worth at least $20,000. So, pay attention.

If you save invest in an investment-linked product (ILP), you should study the distribution cost. This is the amount of your savings that is taken away from you to pay the insurance agent.

The distribution charge is not told to you directly. Instead, the insurance company tells you that 20% (say) of your savings is invested for the 1st year, 60% is invested for the second and third year and 100% from the fourth year onwards.

In the above example, a total of 160% of your annual savings (ie 19 months) is used to pay for the distribution cost during the first 3 years.

Take a look at an analysis done in this website:
http://www.askdrmoney.com/Ins_ILP_RP.htm

The distribution cost varies from 7 months (ie NTUC Income) to 19 months (for most other insurers). The difference can be up to 12 months.

NTUC Income takes away less from your savings to pay our agents. A difference of 12 months means that we are investing an additional 12 months of your savings for you, compared to other insurers.

If you save $300 a month, you will get an additional $3,600 in savings by going through NTUC Income. Assuming an average investment yield of 6% per annum for the next 30 years, the additional savings of $1,800 will accumumulate to $20,600 on maturity.

Yes, this tip is worth $20,000 to you.

Here is another valuable tip. If you have recently committed to an expensive ILP plan that takes away up to 18 months of your savings, you have the choice to terminate that plan now. As the distribution cost is being taken away from your savings over 3 years, the actual "loss" to you by terminating now, is much less than 18 months.

You can move to a better plan from NTUC Income. Send an e-mail to me at tankl@income.com.sg.

Avoid investing in Complex Structured Products

Many banks are offering various variety of complex structured products. They advertise these products aggressively - to bring out the attractive features. But the advertisments do not tell the risk and the negative aspects of these products.

Dr Money (a financial columnist who writes for The New Paper) analyses these products and presents his views in his website:

http://www.askdrmoney.com/Bank_Products_analysis1.htm

It is probably the only place where people can go to find out the facts behind these complex structured products -- (which are practically impossible for the average person to understand).

Take the advice of the a top investment guru over the past decades, Warren Buffet:

"If you can't understand it, don't buy it" -- Warren Buffett

Tips for the Young: Earn $146,000 more on your savings

If you save $300 a month for 30 years, your total saving is $108,000.

The interest that you can earn depends on how your invest your savings.

If you invest in a low risk investment, such as bank deposit, and you earn 2% per annum, you will get $148,000.

If you invest in a large, well diversified fund, with low charges, and you earn 6% per annum, you will be $294,000.

The difference is $146,000. You can get $146,000 more, just by choosing the right type of investment.

If you look at the historical record of the return on equities for the past 10, 20 or 30 years, the average return is actually much higher than 6% per annum. In my view, it is quite safe to assume an average return of 6%, provided that you choose the right fund.

What is the right fund?

- choose a large, well diversified fund (preferably $500 million or more)
- preferably, invest in global equities
- choose a fund with low charges, say 1% per annum or less
- invest for the long term, say 10 to 30 years
- choose a right time to realise your investment (if necessary, wait 1, 2 or 3 years)
- choose an investment fund that acts in the interest of the investors and not the shareholders

Attend an educational seminar conducted by NTUC Income. Visit, http://www.income.coop/seminar/

Aggressive competition in Motor Insurance

QUESTION FROM JOURNALIST
REPLY BY TAN KIN LIAN

I am writing a story based on what the MAS said last month that motor insurers need to maintain underwriting and pricing discipline.

- Is maintainng underwriting and pricing discipline a challenge for the industry?

Reply: Yes. It is a challenge. Some insurers, with a small volume of risks, do not have adequate statistics on their own claims experience. They use the premium rates charged by other insurers and even give a discount. Their premium rates may not be adequate to cover their claims and expenses, especially if they cannot manage the inflated claims. The shortfall can be as much as 30%. They will suffer a loss and will have to increase their premium rates significantly in the future.

- What has NTUC done in this area?

Reply: NTUC Income review our claim experience every six months. We use the claim experiences to revise our premium rates. We are pro-activly in managing inflated claims and can bring down the claims to a lower level, compared to our competitors. We keep our expenses low and add a modest margin. We are generally able to offer the most competitive rates, and still keep to a modest profit.

- What is NTUC's average motor premium today and is it likely to go lower?

Reply: The average premium for private cars today is $807. This is a reduction of 15% compared to the average premium of 1 year ago.

- Why is there strong competition in motor?

Reply: There is strong competition in motor insurance. Several insurers are charging premium rates below their cost of claims and expenses. The difference can be as much as 30%. This is unsustainable and unsound. They will have to revise their premium rates significantly in the future. Their policyholders will be hit.

- What is NTUC's market share in terms of premiums and vehicles?

Reply: Our market share is now about 35%.

Can a bankrupt buy an insurance policy?

QUESTION

I came across your blog recently, and found out your contact. I would like to take this opportunity to clarify some doubts about certain insurance matters.

If one is declared bankrupt, is he still eligible to purchase insurance? Or does he need to seek permission from the relevant authority (Official Assignee) before doing so?

If one purchased insurance without the permission, what are the possible consequences? e.g. in the event of claims, would his claims be confiscated?

-------------------------

REPLY

When a person becomes a bankrupt in law everything he owns (including his insurance policies) becomes the property of the Official Assignee.

He cannot buy an insurance policy without the permission of the Official Assignee.

The Official Assignee can and may give permission to a Bankrupt to buy a reasonable protection policy (i.e. a Term Policy) for the benefit of the bankrupt’s family. This permission has to be given in writing.

A simpler way to address the problem is to get the spouse to buy a policy on the life of the bankrupt. In which case the policy will be owned by the spouse and not the bankrupt and the official assignee will have no say over the policy.

Why do Singaporeans save so little for their retirement?

QUESTION FROM STRAITS TIMES JOURNALIST

A new survey shows that Singaporeans might not have enough money to last them through their retirement years. The research conducted with 1,000 working adults indicated that only one in ten Singaporeans has actively saved for retirement in the last year. The study also shows that 61 per cent are seriously concerned about having too little money during retirement, while 64 per cent of Singaporeans feel they themselves should bear the financial costs of their retirement.

Why do singaporeans save so little? Are singaporeans in deep trouble for their golden years?

REPLY

Ten years ago or earlier, the contribution to the Central Provident Fund was at a high rate. Most people could rely on the CPF for their retirement. Housing prices was at a more affordable level. After paying for their HDB flat, there was sufficient savings left for retirement.

The situation changed during the recent ten years. CPF contribution was reduced. A higher proportion of the contribution was set aside for medical expenses. Repayment for housing take a major portion of the CPF savings.

Many people did not realise the need to make additional savings. The financial products available to them was not satisfactory. The saving in a traditional life insurance product did not give a good return, as a proportion of the premium has to be set aside for the insurance coverage and to pay commission to the insurance agent.

Today, consumers have a better choice.

NTUC Income has launched our Ideal plan. It is an investment-linked plan that encourages regular savings. The savings can be invested in our large, well diversified fund to earn an attractive rate of return. The return during the past three years was exceptionally good, averaging about 15% per annum.

Looking towards the future, we hope that the fund can earn an average of 5% to 7% per annum over the long term. This is not guaranteed. The average return earned over a balanced fund of equity and bond over the past ten years has been about 6% per annum.

Another advantage of our Ideal plan is the flexibility. The consumer can change the amount of regular savings based on their personal circumstances. They can increase or reduce the regular savings, or to stop savings for a short period without suffering any penalty. They can even make cash withdrawals from the plan.

Other insurance companies offer similar products. However, the key advantage of our Ideal plan is the low distribution cost. It works out to an average of 7 months of premium, compared to between 11 to 19 months for similar plans from other insurers.

More details can be found in this website: http://www.askdrmoney.com/Ins_ILP_RP.htm

Our Ideal plan is now actively purchased by consumers as a means to make additional savings for their retirement. The sale of this product has inceased significantly in the past two years.

With a more attractive product, we believe that more people will make additional savings for their retirement. Our insurance advisers are reaching out to educate them on this need.

We also invite the public to learn about insurance in our educational website: www.knowyourinsurance.com.sg

I have another suggestion.

It will be helpful if the government allow a higher amount of tax relief for people to make additional savings for their retirement. Currently, the tax relief is $5,000 per year, inclusive of CPF contributions. If the tax relief is kept at $5,000 and is separate from CPF contribution, it will encourage more people to make this additional savings.

Guess who says that NTUC Income don't pay claims?

For the past 30 years, our competitors' agents have been trained by their sales managers to tell the customers, "NTUC Income does NOT pay claims".

Is this true? Of course, NOT.

NTUC Income has paid several hundred thousand of claims over the past years, and quite promptly. Our motto is: "Prompt and Fair Settlement of Claims".

Why do these competitors' agents target NTUC Income?

The answer is simple. NTUC Income offers better terms to our customers. It is a fact. The only way to get customers to buy their expensive products (ie pay higher premium to the competitor products) is to tell a lie.

Unfortunately, many Singaporeans believe the lie. They pay a higher premium for the privilege of being served by a more expensive insurance company.

But many more Singaporeans are savvy. They ignore the lie and take their insurance with NTUC Income. We have 1,200,000 policyholders who fit into this category. They know the real facts and make the right choice.

I repaired my new car at a quality workshop

I bought a new Mercedes E240 three months ago.

Someone knocked into my car at the car park. It damaged the door. He volunteered to pay for the repair under a private settlement.

I sent it for repair at our quality workshop. It cost $1,400 to change the front passenger door and paint work the side mirror. If my car were to be sent to the distributor, it would have cost $2,700 for the same scope of work.

Although the other party is paying for the repair, I did not send my car to the distributor.

I am not worried about the potential loss of warranty. I think that the distributor cannot enforce it.

Is an equity fund appropriate for a retiree?

FROM POLICYHOLDER

I have $150,000 of CPF OA in your Growth fund. I am 61 years old and will not be needing my CPF money.

At the same time I don't know whether it is appropriate for an older person who will be retiring in 6 months time to take risk. I do have additional income from rental and interests from fixed deposits.

I am thinking of switching $20,000 at least to your global equity fund as I think that bonds are not performing well at the moment. I know that the risk is lower with your Growth fund as it is a balanced fund.

Would you advise me to remain with the Growth fund or would you advise me to switch to both Global Equity Fund and Spore Equity Fund or just Global Equity Fund which I think is more diversified.

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MY REPLY

I am 58 years old, and I keep most of my investments in the Growth Fund as well. I intend to invest for the next 20 years, and to withdraw a small sum each month after I retire.

It should be all right to invest in a fund that is largely in equity. By investing for the long term, we diversify our risk.

You can also attend my educational talk. Details of my talks are shown in this weblink: http://www.income.coop/seminar/

I think that this is a good idea to switch part of your investments into an equity fund.

A few months ago, I switched about $100,000 of my investments from the Growth Fund (which is 70% equity and 30% bond) to the Singapore Equity fund. This turned out to be a good decision at that time.

For investors who look towards the long term, I think that the Global Equity Fund may be more appropriate than the Growth Fund.

For the immediate future, there is some uncertainty about the impact of high oil prices on equities, so one has to take this into account.

Visit to Italy

I spent four days in Italy to attend a conference and also to visit Venice for a holiday. Italy is expensive. This must be due to their economic progress, since joining Europe

Thirty years ago, Italy was known to be cheap. Many people took a holiday in Italy for art, culture and to buy cheap things. How things have changed!

I had to pass through immigration in Frankfurt Germany. After that, I am allowed to move freely into Italy and back, without passing through immigration.

I hope that the countries of South East Asia can work together to simplify travel within the region.

Maybe, by working together in a larger economic zone, our countries can make better economic progress, similar to Europe.

Have adequate insurance

For the past 25 years, I have the following insurance:

$1,000,000 in personal accident cover
$500,000 in term insurance cover

Each year, I paid $800 for the personal accident insurance and $1,000 for the term insurance.

Nothing happened to me for 25 years. That's good. I do not expect to get the premium back.

I am glad that I paid the premium for the 25 years, as it provided security for my family. If something did happen, my family would have been well taken care of.

Leave something for your grandchilren

Someone suggested to me that we should leave something for our grandchildren in our will. This will make them remember us.

Another way is to name them as beneficiary in a life insurance policy. You can also take a single premium policy to give the maturity benefit to a grandchild, when the beneficiary reaches a certain age.

Pay less for your travel insurance

NTUC Income charges the lowest premium rates for
comparable benefits.

PREMIER PLAN

Benefit                  Income  Co-A  Co-X

Death/PTD                $200k  $200k  $250k
Medical Expenses         $500k  $500k  $300k
Premium (Asia - 7 days)    $41   $66    $56
Premium (Europe -7days)    $68   $80    $76

BASIC PLAN

Death/PTD                $100k  $150k  $150k
Medical Expenses         $250k  $250k  $150k
Premium (Asia - 7 days)    $29   $46    $42
Premium (Europe -7days)    $51   $70    $61

All plans pay for 100% of emergency medical evacuation
and also cover terrorism. NTUC Income has just removed
the 15% cost-sharing.

The above is the cost per person. If the diffence is
$30, a family of 5 people will have to pay $150
to the other insurer. You can save this sum by
insuring with NTUC Income.

Call 6332 3456.

ILP vs. Unit Trust – which is best?

Editor
Business Times

I refer to the article by Genevieve Cua, “What clients are not told about ILPs” (BT, April 12).

The article does a good job of pointing out the problems of unit trusts and ILPs which are sold by two life insurance companies: Aviva and Manulife. The ILPs and unit trusts offered by these two insurers are nearly identical. Yet the ILPs cost slightly more than the unit trusts.

The conclusion of the article is give by Mr Ben Fok from IPAC financial planners. He says: “My personal opinion is, if you can avoid investing in ILPs, don't invest. Just go for a unit trust.”

Is this good advice? Are unit trusts really cheaper than ILPs?

To find out, it would be useful to compare expense ratios of unit trusts vs. ILPs.

This has been done. A study recently compiled the expense ratios of both and compared them. To standardise, the study excluded bond funds and considered only equity (stock) funds.

For ILPs, the median expense ratio was 1.8 per cent. For unit trusts, it was slightly higher at 2.1 per cent. The difference is a small one.

Of equal importance is that among the 11 insurers, the median expense ratios of their ILPs ranged from a low of 1.0 per cent to a high of 2.2. The range is important since people typically don’t buy an average fund. They buy one or more funds from a single insurer.

The study found the insurers with the lowest expense ratios for ILPs are NTUC Income (1.0 per cent), GreatEastern Life (1.4 per cent) and Prudential (1.5 per cent).

Indeed there are bargains to be found among ILPs.

Source: www.AskDrMoney.com “Best ILPs -- single premium”.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Reply: What clients are not told about ILPs

Editor
Business Times

I refer to the article entitled “What clients are not told about ILPs” by Genevieve Cua (BT, 12 April).

The article does a good job of highlighting a serious problem: Funds in Singapore cost too much. More than any other insurer, NTUC Income has been fighting this problem with its low-cost funds.

The article concludes with Mr Ben Fok of IPAC saying, “…if you can avoid investing in ILPs, don’t invest. Insurance is for protection, just go for a Unit Trust".

I hold a different view.

In choosing the right investment plan, the investor should consider the following:

- the risk profile of the fund
- the distribution charges
- the fund management fees
- the charges for the insurance protection (in the case of an investment-linked plan)

Many investment plans (ie unit trusts or ILPs) have high distribution charges and fund management fees which are not properly disclosed to the investor. The advisers earn a large share of these fees, and are required to disclose this fact. In spite of it, many layman continue to be confused.

There is an independent comparision of these charges in the website, www.askdrmoney.com.

NTUC Income keeps our charges at a competitive level, so that most of the returns are given back to our investors. Our charges for our ILP funds are generally lower than the unit trusts.

Our fund management fee is about 1% per annum. This fee for most similar funds, including unit trusts, is 1.5% to 2% per annum. Some financial advisers charge a separate level of advisory fee which is additional to the fund management fees at the unit trust level.

Our distribution charges are generally lower than for similar products. Our spread is 3.5%, compared to 5% for similar funds. During our sales promotion, we give a bonus units of up to 2%, which reduces the spread to 1.5%.

Our distribution charge for a regular saving plan is about one third of the cost of similar ILP offered by other insurance plans.

Our total expense ratio is among the lowest for all funds and unit trusts in the market. As the expense ratio is an annual charge, it has the most significant impact in determining the net return to the investor, for a similar risk profile of the investments.

The insurance protection embedded in our ILP plan is offered free of charge. It is funded by the margin in our modest charges.

We provide a low-cost term assurance plan to be bought separately as a rider. The premium is extremely low, and is kept level for the duration of the rider. The cost does not increase with age.

We advise long-term investors to select our combined fund, which is a large, well diversified fund of $3,800 million. It is invested in 900 good quality equity and bond invesments. It is managed by 9 top fund managers around the world. It has earned an attractive return for our investors during the past three years. The fees are among the lowest, ie 1% per annum.

We educate consumers to make the right choice. We invite them to visit our educational website, www.knowyourinsurance.com.sg

Tan Kin Lian
Chief Executive Officer
NTUC Income

Reduced special bonus for Prime Life

Several insurers (not NTUC Income) sold large numebrs of Prime Life policies about 20 years ago. They paid a low rate of annual bonus, but promises special bonus of 300%, 400% and 500% of the accunmulated bonus on the 20th, 25th and 30th year.

They were not able to meet their projection. In reality, special bonus rates were something reduced to 100%, 150%, 200% respectively.

The policyhoholders who bought these plans suffered several cuts in their expected bonus payouts.

NTUC Income refused to issue this type of policy. We prefer to pay a higher rate of annual bonus, and to keep our special bonus at 25%. Our policyholders have enjoyed much better bonus compared to Prime Life plans.

Special bonus maintained at 25%

NTUC Income pays a special bonus on maturity and death. This is computed at 25% of the accumulated bonus.

We are probably the only insurer that maintains the special bonus even in difficult times. Other insurers has cut their special bonus on several occasions in past years. Their policyholders will suffer a big cut, if their policies matured in these years. The amount of the cut can be more than 10% of the policy proceeds. That is a lot of money.

NTUC Income prefer to adjust the annual bonus to reflect changes in our investment earnings. This ensures that the adjustment applies fairly to all policyholders and is not borne by the policyholders whose policies mature in the current year.

Our policyholders have found our method to be fairer. We are also able to give a higher return to our policyholders in the past years.

Technology Fund performed well during past 3 years

The Technology Fund managed by NTUC Income started in 2001 and had two bad years.

It performed well during past 3 years (2003 to 2005), as follows:

- actual return (net of manager fee): 18.2%
- benchmark: 17.2% pa.
- outperformance: 1.0% p.a

It continued to perform well during the first quarter of 2006:

- actual return (net of manager fee) 6.4%
- benchmark's 3.4%.
- outperforamnce: 3.0%

During my educational talk for the past year, I was often asked by a participant, "Should I move out of Technology Fund? What is your advice?".

My answer was, "I also invested in the Technology Fund. I have decided to stay invested. The Fund will recover".

My view turned out to be right.

Adequate provision for motor claims

Some companies make a low provision for their outstanding claims. This gives the impression that their motor insurance is profitable. This allows them to reduce their premium rates.

Here are the claim provision for three large insurers during 2004:

NTUC Income: 101%
Company A: 60%
Company X: 72%

NTUC Income makes adequate provision for our claims. This means that we will be able to keep our competitive premium rates for a longer period.

The insurers who have inadequate provision will have to increase their premium rates in the near future.

Insure with NTUC Income, to enjoy lower premiums over the next few years.

Additional Cover for Renting a car overseas

NTUC Income is providing an extended benefit for its motor policyholders who has to drive a rented car overseas. This extension will covers the additional third party liability for death, bodily injury or damage to property over the limited cover provided by the rental car company. The additional premium charged by NTUC Income for a similar coverage is likely to be lower than the market.

This cover is for US$1 million and covers the policyholder against third party liability that exceeds the basic cover provided by the car rental company. The premium rate that is charged by NTUC Income will be 50% of the normal market rate and is available only to a policyholder who has a No Claim Discount of 20% or more.

If the policyholder does not meet the requirement, the policyholder can purchase the cover from the overseas insurer of the rental company.

Quite a hassle to file my income tax returns through internet

Many people said that it is easy to file the income tax return to IRAS through the internet. I have a different experience. It was quite difficult time for me.

Here are the problems:

- my Singpass is not accepted
- I am required to use exactly 8 character for my RAS password (no more, no less)
- it rejected my new password, bacause "it was used before".
- the website was very, very slow
- it was quite difficult to enter my income from property
- it was quite difficult to navigate.

Why is this the case? IRAS has designed a system that is convenient for them, but NOT for the taxpayer.

It is easier for me to fill a form and to fax to IRAS.

Do not rent your car to a stranger

For the last three months, we have four cases where the owner rent their car to a stranger for a certain period.

Later, the hirer disappears without a trace leaving the car owner in a lurch. The car was reported as "stolen" but the insurance policy does not cover the lost of the vehicle while it is being illegally rented out.

We suspect that the rented cars were driven across the Causeway to be sold.

We wish to warn the public that it is illegal to rent your vehicle without a proper permit and insurance coverage. Most importantly, you should not fall victim to this criminal act.

Banks charge differently from what they say

I refer to the letter from Gan Siok Bin, “Why do existing customers pay a higher 2nd-year rate?” (ST March 31)

Gan Siok Bin took a floating rate home-loan from United Overseas Bank (UOB). The loan is now in its second year and it costs 4.05 per cent. However, UOB’s advertised second year rate is only 3.5 per cent.

The 3 local banks offer identical home-loan rates and our family had a similar experience with a different bank. Our year 2 home loan rate shot up to 3.85 per cent while the quoted rate is also 3.5 per cent.

I looked into this and found there is no relation between the rates banks quote and the rates they charge. In fact, a loan officer told me, "The variable rates we tell customers does not obligate the bank in any way."

It turns out that how much you pay depends on the bank’s "board rate". Each bank has many board rates and can re-set them at any time. This determines how much a borrower must pay for a variable rate home-loan. It is independent of a bank’s advertised rates.

Larry Haverkamp

Annuity plans needs improvement

Editor
Lianhe Zaobao

I refer to the letter, 'Annuity plans need improvements', by Mr Yang Song Jian, (Zaobao, 23 March).

Mr Yang asked insurance companies to improve the annuity plans to better take care of the elderly. More should be done educate Singaporeans on the importance of financial planning and savings.

I agree.

In a recent survey, we found out that 50 percent of the respondents wanted to increase their regular savings for their retirement. They know that their current savings in the Central Provident Fund is inadequate.

As a general guide, each person should set aside 10 to 15 percent of the regular earnings as savings for the future. They can use the savings for their retirement or to meet emergencies, in they lose their jobs or have to pay a large medical bill.

They should invest these savings in a flexible plan that can give an attractive rate of return, by investing for the long term.

NTUC Income offers a choice of attractive annuity plans. We handle 65 percent of all life annuities sold in Singapore. Our annuities offer an attractive return, an annual bonus (in most years) to supplement the guaranteed return, and a refund of the balance of the capital on death.

There are a few ways for the public to learn about financial planning:

- see an insurance adviser;
- attend an educational talk;
- visit an educational website.

NTUC Income holds an educational talk every week. The topics include retirement plans, medical insurance, financial planning, reverse mortgage scheme, etc. Schedule of the talks can be found at www.income.coop/seminar. Admission to these talks is free.

We also manage an educational website at www.KnowYourInsurance.com.sg. It is available in English, Chinese and Malay versions. The website covers a wide range of insurance topics, such as: personal accident, medical insurance, financial planning, travel insurance and saving for education.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Tips on Financial Planning

My daughter asked me to give three important tips for financial planning to her. Here is my reply:

Tip 1. Save 10% to 20% of your regular earnings. This is in addition to CPF.

Tip 2. Invest in an investment-linked policy (ILP). It allows you to adjust your regular savings. Choose an ILP with low distribution charges.

Tip 3. Invest in global equities or Singapore equities. They are likely to give a better return than bonds. You can get a better return. Risk is an advantage.

After listening to my explanation, she became quite convinced. It makes a lot of sense.

Assessment on the spot

Editor
Straits Times

I refer to the letters, 'Pictures can help settle insurance claims' by Mr Sin Chee Kharn and 'Refusal to submit report foils claim' by Mr Goh Khee Kuan (ST, March 29).

Mr Sin shared the usefulness of submitting photographs of a motor accident scene in the claims process.

Each month, NTUC Income handles about 2,000 motor accident claims. About 10 per cent of these are disputed by the parties, who give conflicting versions of the accident.

Since Dec 15 last year, we have introduced the 'assessment-on-the-spot' service. This service provides roadside assistance to motorists at the scene of accident. Motorists who need help after an accident can call 67886616. Once the service is activated, our appointed assessor will arrive at the accident scene in about 15 minutes.

The assessor helps our policyholder and the third party driver to assess the damage at the scene of the accident. He also helps them fill in Singapore Accident Statement (SAS) forms, and takes photographs of the damaged vehicles. Disputes can be minimised if both parties to the accident agree to sign the SAS on the spot.

If anyone is injured, the assessor calls an ambulance and reports to the police. All documents, particulars and photographs will be forwarded to Income for follow-up by its claims officer.

The officer is usually able to come to a decision on the appropriate apportionment of liability. We are fair in our assessment and do not favour any side. If any party disagrees with our assessment, they can ask for an independent expert to review the case or take the case to court.

We have a simple service to leverage on technology to allow a speedy motor claims process. During an accident, motorists are encouraged to use their mobile phone to take photographs of the damage and send them to us via MMS on 93885992 or e-mail photo@income.com.sg

This initiative has received a favourable response and has resulted in a more professional and efficient way of handling liability disputes. An average of 35 cases each month are successfully resolved because photographs were sent to us via MMS.

Freddy Neo
General Manager
NTUC Income

You can change a nomination

QUESTION FROM POLICYHOLDER

What happens if I have made a nomination for my insurance policy, and many years later when I made a will, I decide to add or change the nominee of the policy in the will.

REPLY

You can change the nomination (by submitting a new nomination) or by cancelling it. If you have a specific nomination in force, we will pay according to the nomination, and not according to the will.

Policyholder ask for supplementary liability cover

Our policyholder wish to rent a car in the USA for 11 days. His rented car pays for third party liability up to about US$50,000. He has to pay US$11 a day to buy supplementary cover for US$1 million.

He asked us to provide this cover to you at a lower rate.

We offer to reduce the rate to US$5 a day, as he already enjoys a 50% no claim discount. The policyholder is delighted to have this offer.

Tentative. We intend to extend this privilage to other policyholders who are insured with NTUC Income. If you rent a car in another country, eg USA, UK, Europe, Australia, you can get this supplementary cover at a discount of 50% from the rate that is normally charged in the respective country.

This will be offered only to a policyholder who now enjoys a NCD of 20% or higher.

Car Sharing Scheme

NTUC Income operates a car sharing scheme with more than 3,000 paying members. This scheme is growing in popularity. Here is a feedback from a member:

FEEDBACK

You have got a great team and based on my experience with your team (guys like Kendrick, Dave and Yusoff and Han), are really proactive and go out of their way to support members like us.

Kendrick especially has supported me with the various issues that I faced eg. over the recent weekend, I had a car that was having some continuous sound coming from the back of the car.

Kendrick offered to return back to the office to look into arranging another courtesy car for me. Fortunately, the sound disappeared after an hour later.

Another time, again over the weekend, my car broke down and engine failed to start. Kendrick made altenate arrangement and that really helped a lot

As a result of such positive experience, I have thus always endeavour to recommend to people around me without a car to try out carcoop and refer them to
your website to sign up for trial services.

Reverse Mortgage on HDB Flat - 4th loan

Brief profile: case 4

Mdm X, aged 72 years old is a widow. Her 2 children migrated overseas and now give her a monthly allowance of $400. Her 2-room HDB flat in Jln Bukit Merah has a market valuation of $105k. There is no outstanding loan.

At her request, we have exceptionally approved a lumpsum of $28k over 10 years. Lumpsum is granted to settle outstanding policy loan taken under our Guaranteed Life Annuity.

Save for your child's education

The cost of university education can be quite high. The average cost is:

Singapore $40,000
Australia $160,000
USA $280,000

The cost is expected to increase in future years.

Are you saving for your child's education?

If you save $300 a month over 16 years, the total savings with interest will be:

2% per annum: $68,000
6% per annum: $95,000

You can get 40% more, if you can invest in a plan that gives you a higher return, and risk reduced through diversification.

Are Singaporeans working too hard?

In my view, the answer is "yes". Look at the people who work late hours most days of the week.

It is better to work "smart". One can be more effective by working less, and to work on the right priorities.

Here are my tips:

- communicate more
- do the easy things that produce quick results
- act promptly
- ask advice from other people
- do by trial and error
- think, use your judgement
- do not rely on your boss to tell you what to do.

These tips will lead you to more results with less work. It is working "smart".

Advantage of a Nomination

NTUC Income allows a policyholder to make a specific nomination for each insurance policy. This allows the proceeds to be paid to the nominees named in the nomination.

If there is no nomination, the proceeds (up to $150,000) will be paid to a "rightful claimant" which is defined in the Insurance Act as the spouse or a family member. The rightful claimant receive the money and distribute it in an appropriate member among the family members.

The policy proceeds will be part of the estate. There will be other assets as well, such as shares, property and cash.

If there is a will, the estate will be distributed according to the will. If not, it will be distributed according to the intestate law.

However, in most cases, the family members will agree on how the estate is to be distributed. They do not need to follow the formula in the intestate law.

The advantage of a nomination is for the policyholder to set aside a sum of money to be distributed specifically to the nominees. This is useful, if the policyholder has a specific intent. Otherwise, the distribution according to the will or intestate law is a fairer way.

Inflation rate over 50 years

50 years ago, the Reader's Digest magazine cost $1. Now, it cost $9.50.

What is the inflation rate over the past 50 years, for this magazine?

My financial calculator showed 4.6% per annum.

An inappropriate request

A customer was unhappy with his interaction with my manager. He lodged a complaint about his "poor professionalism".

I replied that I have taken note of your feedback and that it was probably a misunderstanding.

The customer asked, "I suppose NTUC has in some way going to compensate me for the unnecessary and inconvenience caused?"

I replied that we will not be making any compensation and that his request was inappropriate.

He withdrew his request and closed the matter.

Reverse mortage on HDB flats - 3 loans granted

The government recently approved granting of reverse mortgage on HDB flats. We received about 250 enquiries during the first few days.

We have since approved 3 reverse mortgage loans on HDB flats. All applicants are above 70 years old (condition set by NTUC Income). The names given below are not the real name.

CASE #1

Mr & Mrs Chan have no dependents. Their 3-room HDB Flat is situated at Marine Parade with a current market valuation of $240k. There is no outstanding loan on the
flat.

We have approved a monthly advance of $300 over 16 years at a modest loan to valuation ratio of 40%. We may eventually extend to a monthly advance of $540 (within acceptable loan to valuation ratio of 70%), pending borrower's decision.

CASE #2

Mr & Mrs Cheong have no dependents. Their 3-room HDB Flat (23 yrs old) is situated at Jurong East with a current market valuation of $160k. There is no outstanding loan on the flat.

We have approved a monthly advance of $295 over 18 years at maximum loan to
valuation ratio of 70%.

CASE #3

Mr Teo is currently staying with his wife. He is receiving some allowances from his 3 children. His 4-room HDB Flat (18 yrs old) is situated at Simei with a current market valuation of $250k. There is no outstanding loan on the flat.

At his request, we have approved a monthly advance of $400 over 12 years at
a modest loan to valuation ratio of 34%. He has intention to either sell
or downgrade the flat again (previously downgraded fr 5-room) at the end of
the loan period.

Special features of loans from NTUC Income

NTUC Income plans to offer loans with the following special features:

- competitive rates
- fixed rates for first 3 or 5 years
- repayment start after one year
- lower rates for "preferred" policyholders
- deferment of installments due to loss of employment
- rebate on prompt payment of installments

We hope that our loans will be more suited to our policyholders.

Payment of death claims under DPS

24 March 2006

Editor
Forum Page
Straits Times

I refer to the article by Lorna Tan entitled "Key difference in two DPS options not highlighted: Case" (Straits Times, 23 March 2006)

The article highlighted some concern about how the benefit under the Dependent Protection Scheme that is insured with NTUC Income and Great Eastern will be paid out.

The sum involved is only $46,000 or slightly more. In the event of death and the absence of a nomination or will, the benefit will be paid to the family members (ie spouse, children, parents) according to the Insurance Act. It is usually quite straight forward.

NTUC has paid out 300 DPS claims since being appointed one of the insurer. More than 95% of these claims were paid to the proper claimants according to the Insurance Act, who were either executors of wills for those who have made a will or family members for those without a will. The remaining 5% are paid according to specific
nomination submitted by the policyholder. The nominees are usually family members.

Most policyholders will thus find this arrangement to be suitable.

A policyholder of NTUC Income can submit a specific nomination, if they wish to distribute the proceeds in a different manner. The forms are available on request.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Reply: Annuity plans need improvements

24 March 2006

Editor
Zaobao

I refer to the letter, 'Annuity plans need improvements', by Mr Yang Song Jian, (Zaobao, 23 March).

Mr Yang asked insurance companies to improve the annuity plans to better take care of the elderly. More should be done educate Singaporeans on the importance of financial planning and savings.

I agree.

In a recent survey, we found out that 50 percent of the respondents wanted to increase their regular savings for their retirement. They know that their current savings in the Central Provident Fund is inadequate.

As a general guide, each person should set aside 10 to 15 percent of the regular earnings as savings for the future. They can use the savings for their retirement or to meet emergencies, in they lose their jobs or have to pay a large medical bill.

They should invest these savings in a flexible plan that can give an attractive rate of return, by investing for the long term.

NTUC Income offers a choice of attractive annuity plans. We handle 65 percent of all life annuities sold in Singapore. Our annuities offer an attractive return, an annual bonus (in most years) to supplement the guaranteed return, and a refund of the balance of the capital on death.

There are a few ways for the public to learn about financial planning:

- see an insurance adviser;
- attend an educational talk;
- visit an educational website.

NTUC Income holds an educational talk every week. The topics include retirement plans, medical insurance, financial planning, reverse mortgage scheme, etc. Schedule of the talks can be found at www.income.coop/seminar. Admission to these talks is free.

We also manage an educational website at www.KnowYourInsurance.com.sg. It is available in English, Chinese and Malay versions. The website covers a wide range of insurance topics, such as: personal accident, medical insurance, financial planning, travel insurance and saving for education.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Pensioners lost money on their investments ?

Recently, I saw a news article with this headline. It refers to another country. This can be a frightening prospect.

Here are some suggestions on how to invest your retirement money and not face the same risk:

- invest for the long term
- invest in a professionally managed and well diversified fund

It does not matter that the value of the investments can go up or down. They do not concern you. If you are investing for the long term in equities, you should get a better return compared to bonds.

Based on past record, the average return over 10 or 20 years is likely to be 6% to 9%.

The combined fund from NTUC Income is structured to give a good return, with little risk. In fact, risk can be turned to an advantage.

If are keen to learn more, you can call us to attend an educational talk.

Participating or adjustible annuity?

NTUC Income holds a 60% market share in life annuity. Our key product is the participating annuity.

PARTICIPATING ANNUITY

A male annuitant investing $100,000 at age 62 in a immediate life annuity (with no
capital refund) receives $524 per month.

This represents a payout of 6.3% per annum, comparising of a guaranteed return of 2.5% with the balance being a consumption of the capital.

If we earn a net investment return over 2.5%, we will add a bonus to the annuity. We expect an average bonus of 2.5% per annum over the future years, but this is not guaranteed.

If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $446 per month (ie 5.3% p.a).

ADJUSTIBLE ANNUITY

Some annuitants prefer to have a larger payout, instead of an increasing payout.

We are considering to offer an adjustible annuity that comprise of a guaranteed amount of $524 per month, plus an non-guaranteed amount of $136, making a total payment of $660 per month. The annual payout is 7.9%

The non-guaranteed amount may be adjusted up or down, according to our investment return. If the net investment return is 5%, the amount will not be changed. If it is higher, the non-guaratneed amount will be increased. If it is lower, the amount will be reduced. Any adjustment is expected to be in small gradual steps.

The guaranteed amount will always be payable.

We may offer the option of the adjustible annuity, if there is interest in this product.

If the annuitant wish to have a refund of the balance of capital on death, the annuity payment reduces to $602 per month (ie 7.2% p.a).

Why NTUC Income supports Idac

19 March 2006

Editor
Forum Page
Straits Times

I refer to the report entitled "Only 11 insurers left on Idac accident scheme" (St Times, 18 March).

The report covered the reasons why several insurers left the Idac scheme. I wish to tell the other side of the story - why NTUC Income choose to remain in the scheme.

Each day, about 60 of our policyholders and 30 third party claimants reported their accidents to an Idac center.

It is easy for claimants to visit any of 12 Idac centers located in various parts of Singapore. They can get the address by calling 6788 6616.

The accident report and damage assessment is usually completed within 20 minutes. There is no undue delay and hassle.

Most policyholders are willing to leave their vehicles at the Idac center for the repairs to be arranged by us. The repairs are usually completed within five days. If they are covered under our Quality Plus plan, we provide a courtesy car for their use.

We carry out an inspection of the vehicle after the repair, to ensure that the repair is carried out to a satisfactory standard. We also provide six month warranty on the repair.

If the policyholder prefers his regular workshop to repair the vehicle, we offer a cash settlement based on our best estimate of the repair cost. Less than 5% of policyholder choose this option.

We carry out a survey of our policyholders after the repair. We have consistently obtained high scores:

- 98% are satisfied with the service provided by Idac center
- 96% are satisfied with the quality of the repair

We have a small percentage of disputes, usually not involving Idac services. They involve the determination of the party responsible for the accident, potential loss of no-claim discount, and replacement of "wear and tear" parts. We try our best to resolve these disputes.

By using the Idac scheme, we are able to reduce our repair bill by about 15%, representing about 6% of total claims. We pass the saving to our policyholders through lower premium. We are able to offer premium rates that are 10% to 15% lower than the market.

Your report alleged that "Idac was feeding a top insurer early information about cases". This is an unfair statement. I wish to give our perspective.

The Idac scheme allows for immediate reporting of all cases into a centralised computer system. We use this information to contact third party claimants and make direct settlement with them. This helps us to reduce the cost of third party claims. We believe that this information is available to any other insurers, if they choose to use it pro-actively.

Finally, I wish to state that NTUC Income has a sufficient volume of business to start an assessment system on our own. We have decided to support an industry wide scheme, as it is the best way to overcome the inflated repair bills that have troubled the insurance industry in many countries over the past decades.

Tan Kin Lian
Chief Executive Officer
NTUC Income

How to pass your wealth to your children

The baby boomer generation, who are now in their 50s and 60s, benefitted from the economic growth and are generally quite wealthy.

Some of them are thinking of how best to transfer a portion of their wealth to their children.

I suggest that they should make a partial transfer now, when their children are in their 20s. The children need the mney now, rather than 20 years later (when their parents pass away).

NTUC Income will organise seminars to cover will writing, annuity plan, term annuity, trust, estate duty and similar topics.

More details will be announced later.

Preferred policyholder

NTUC Income plans to register a "preferred policyholder". They will be allowed to have a loan in the future (for car, house, and other purpose) at a preferential interest rate and more attractive terms.

This will be specially useful for young policyholders. The saving on interest can amount to a lot of money.

We will communicate to our policyholders soon.

High cost of living

I read a news report that young people find the cost of living to be high in Singapore.

I agree.

When I was young, the HDB flats and shops were at a subsidisied and controlled price. This helps to keep the cost of living low, and make Singapore competitive.

During the late 1980s, the HDB flats were allowed to appreciate to the "market price". This benefitted the HDB flat owners, but increased the cost of living for the next generation.

Looking back, it would have been better for Singapore, if HDB flats had been kept at the controlled prices. But, it is too late to turn back the clock.

At the current high prices, property will be just like any other investment. One has to think carefully before investing in property. Is the price right?

For some people, it may be better to rent a property. The rental may be lower than the cost of owning the property.

The capital sum can be invested in other means, eg in unit trusts or the combined fund from NTUC Income. These investments may give a better return in the long run.

Get advice. Make the right choice.

Incomeshield Unlimited

Someone suggested that we should call our medical plan as "Incomeshield Unlimited".

This plan now provides unlimited lifetime coverage. The total claimable amount is subject to certain specific and annual limits, but is unlimited in the amount that can be claimed during a lifetime.

Our coverage is better than the $5,100,000 limit that is advertised by another medical plan (which charge much higher premium than Incomeshield).

Logic9 National Competition

Here is an interesting competition to find the faster players to solve the Logic9 (Sudoku) puzzle. Registration is free.

Click on the following link to get details of the competition and to register
http://www.logic9.com.sg.

You have a chance to win up to 36,000 worth of prizes. The top prize for each age group is an IBM Thinkpad notebook worth $4,000.

You stand a better chance of winning, if you practice for this competition. You can buy a Logic9 CD or booklet for $5 only at selected NTUC Fairprice supermarkets.

Growth plan gives a fairly attractive return

A policyholder invested $50,000 in a Growth plan in 2001. It matured 5 years later with a maturity value of $58,000.

The policyholder earned a net return of 3.1% over the past 5 years on the Growth policy.

As the Growth policy has to be invested mostly in short term secure bonds, the return of 3.1% is quite attractive. During the past five years, Government bonds provide a return of around 3%.

Apart from giving a fairly good return, our Growth plan also give life insurance cover, which is built into the contract and not charged separately.

Our aim is to invest the funds prudently, get a fairly attractive return, and return most of the return to our policyholders.

Here is the good news for our policyholders of our Growth plan. The bonus rate has been increased recently. We expect to give better than 3.1% return in future years, based on the higher bonus rates. For a Growth plan that is invested for more than 10 years, the return should be higher than 4% per annum, based on our current bonus rates.

Survey of Young People

2,140 young people responded to the survey.

Which is more important to you?
* Get a better return on your savings 86%
* Make regular savings from salary 52%
* Adequate insurance cover 42%
* Get preferential terms for a loan in the future 19%

NTUC Income is planning to offer special terms for a loan "preferred policyholder". Which do you prefer?
* Lower interest rate 92%
* Hassle free application 50%
* Longer repayment period 29%
* Higher loan amount 27%
* Pre-approval of loan 15%

Which type of loan is likely to be attractive to you?
* To buy a home 66%
* For education 43%
* To buy a car or motor cycle 41%
* Loan for marriage 20%
* Other purpose 26%

To be a "preferred policyholder", you will need to be insured for at least 2 years and have total regular saving of more than $5,000. Do you find these conditions acceptable?
* I am interested to qualify in 2 years time 41%
* I already meet them 35%
* I am not interested at all 24%

Switch and save on part of the 150%

Some people invested in a regular premium investment linked product from another insurer and have to incur up a distribution cost. Up to 150% of the annual premium may be taken away from their investment during the first few years.

A policyholder who has bought an expensive policy recently, and who was not told clearly about the high distribution cost, may find it better to switch to NTUC Income now.

They do not have to incur the distribution cost for the remaining period (usually up to three years) and can take a similar ILP policy from NTUC Income (Ideal 5) where 100% of the saving is invested from the first month.

There is a small catch. We impose $20 more in policy fee each year. You can see our adviser or visit our business center.

Get 150% more

NTUC Income advertise our Ideal plan, which invests 100% of the monthly premium from the start. Similar plans from other insurers take away as much as 150% of the annual premium during the first few years.

Some insurers are unhappy with our advertisement. They expressed that our advertisement denigrates their product.

Here is my reply.

We wish to educate the general public that they have an option to buy a regular investment linked plan that does not carry a large front end load.

We do not intend to denigrate the products of other member companies. I am
sure that they are capable of convincing the consumers about the necessity
and value of paying the front end load.

Internet portal reduce front end charges

The Straits Times reported that two internet portals have reduced their front end charges for investing in unit trusts. The charges have been reduced to 1% and 2.5% respectively.

The unit trusts sold by these portals have high annual charges, typically from 1.5% to 2.5% per annum.

These high annual charges can reduce your return over a 10 year period.

By comparison, the combined fund from NTUC Income has modest charges, as follows:

- initial spread: 1.5% to 3.5%, depending on amount invested
- annual charge: about 1% per annum.

By investing with NTUC Income, you can get a return of about 3% to 12% more over 10 years, assuming that the performance of the fund is similar. This better return comes mainly from our lower annual charge.

How to give to your adult child

A woman in her mid 50s wanted to pass some of her wealth to her adult child. But she does not want to give a lump sum as the child may spent the money.

I suggested to buy an annuity for the child. The annuity will make an annual payment for a certain number of years. The payment can start from a certain date in the future.

She thought that this was a good idea. It did not occur to her.

The annuity provides a return of 3% to 4% per annum, guaranteed. It is tax exempt.

She originally wanted to buy a property and give the rental income to the child. However, this may involve some knowledge of how to look after the property and to find tentant. It may be too troublesome for the child.

Get an affordable medical plan

If a male aged 25 buy an expensive medical plan, he has to pay a total premium of $57,600 in premium up to age 80 based on current premium rates.

The total premium may increase in the future, as the premiums are subject to revision.

If he buys Incomeshield with corresponding top-up rider, total premium is only $40,100, or 31% lower.

The coverage under both plans are largely similar.

Inadequate life insurance

The average amount of life insurance per breadwinner is $37,000. This is inadequate.

Each breadwinner should aim to have 3 to 5 years of earnings to take care of the needs of the family in the event of premature death. As a guide, they should aim to have a sum of $100,000 in life insurance.

Many people find it costly to insure for $100,000 in an endowment, whole life or dread disease policy. The premium is too high.

The current amount of life insurance probably reflect what they can afford to spend for a traditional life policy.

I suggest that they should take a personal accident or term life policy to make up the difference. The premium is quite low, as it is intended solely for protection.

Reverse mortgage for HDB flats

We have been offering reverse mortgage to private property owners since 1997. HDB is now allowing HDB flat owners to obtain reverse mortgage from us.

We will be the 1st insurer to offer Reverse Mortgage for HDB flat. We hope that older HDB owners will be able to benefit from this .

The key features are as follow:

Eligibility for all flat owners of between 70 to 90 years of age
HDB Flat must have at least a remaining tenure of 50 years at the end of the loan period

Competitive effectove interest rate - at 5% pa (for promotion period)

Loan Quantum - up to the total projected loan not exceeding 70% of the total projected valuation of the property.

Loan Period - Up to 20 years OR 90 years of age OR death, whichever earlier

Reverse mortgage for HDB flats

Here are the tentative terms, subject to modification.
------------------------------------------------------------

1. Eligibility

All flat owners from age 70 to 90, who has no and small outstanding loan on their HDB property. The lease at the end of the loan period should be at least 50 years
Borrower must be our life policyholder for at least 1 year. For non-policyholder, borrower can take up a life/personal accident policy

2. Tenure of loan - age 90 or death, whichever is earlier subject to 20 years term.

3. Monthly drawdown

Below is an illustration of the maximum drawdown per month (assuming upfront fees of $3.5k):

FlatType  PropValue     Monthly Payout 

3-room       160k         $200-$230         
4-room       240k         $320-$360         
5-room       320k         $430-$490         
Exec apt     480k         $660-$750         

Monthly payout should not fluctuate greatly and should be for 20 years or up to age 90 years.

For someone who enters at age 70, the monthly drawdown is 0.2% of the property value at the time of taking the loan. The borrower can opt to receive a lower amount. NTUC Income is allowed to vary the monthly payout in accordance to the value of the property.

4. Lump sum borrowing

At the start of the loan, the owner can take a lump sum of up to 5% of property valuation – once off. This is mainly intended to help borrowers settle other debt he/she may have run up at much higher interest rate.

5. Mechanism of the reverse mortgage

a. Loan repayment

The loan is not repayable until the oldest borrower have died or moved out of their flat. The total loan outstanding including interest must then be repaid.

If one of the borrowers dies, or needs to go into medical or care facility, monthly drawdown amount will not change. The other borrower can carry on living in the HDB property as before.

b. Property value fluctuation

If the HDB property increases in value, it will allow the monthly drawdown to be extended for a longer period, and leave a larger balance to be passed to the beneficiaries. If the flat decreases in value, NTUC Income may cease the payout if the outstanding sum exceeds 70% of the value of the property.

c. Early repayment

We allow the owner to sell the flat at any time and repay the balance of the loan without penalty.

If the borrower downgrade to a smaller HDB flat, the RM loan have to be repaid in full or repaid in part if the smaller HDB flat is under RM financing, depending on the situation.

6. Counseling and financial advice (Mandatory)

This is to ensure that the borrower understands the working of reverse mortgage, and how it serves their needs. The borrower must be made fully aware of the features and risks, including:

personal counseling, as each borrower’s financial situation is unique
access to advice on their legal rights - Eg: home may not be left to heirs.
a reverse mortgage is a long term commitment and not for short term cash needs
advise on the consequences of repossession and on other income alternatives, such as downgrading to a smaller flat, or home-stay arrangements

Comparison of Motor Premium Rates

We compared the premium rates charged by the key insurers for 10 models of vehicles.

The average premium rate for the 10 models are shown below:

 
Age of car:    1-5 Years       6 Years
NTUC Income   $584    100%     $534    100%
Company AI    $648    110%     $635    119%
Company AS    $702    120%     $675    126% 
Company AX    $790    135%     $774    145%

The premium rates charged by NTUC Income are lower than the other insurers. One insurer charge 45% more than our rates.

Consumer Education Effort

QUESTION FROM JOURNALIST

MAS's deputy managing director, Ms Teo Swee Lian gave a speech outlining the general trends and challenges facing the insurance industry.

Question: Do you agree with the areas mentioned by her?

Reply: I agree with the following priorities:

- futher consumer education efforts
- improve clarity in the sales process and in documents
- raise ethical standards of agents
- raise proficiency of financial advisers

Question: I think NTUC Income for its part, has spearheaded some education efforts. Can you tell me more about these?

Reply: We have set up a website called www.KnowYourInsurance.com.sg. We encourage the public to visit the webite and learn about specific insurance topics on their own. They can take a simple test. On completing the test, we offer them a modest discount if they take the insurance with us, either directly or through our adviser.

The website receives an average of 500 visitors a day. About 100 take the test daily. We are happy with the results. We consider this to be a successful website.

I also write about insurance matters in my personal blog, www.tankinlian.blogspot.com. About 100 people read my blog each day. Some fo them e-mail to me, after reading my blog to ask additional questions. They told me that they like my blog, as it is educational.

Make a direct claim against your insurer

A motorist left the workshop to make a claima against NTUC Income. The workshop inflated the bill and submitted the claim through a lawyer. We disputed the claim.

The motorist sent an e-mail to me directly. He complained that we were not fair in handling this claim and labelled it as "Unfair Insurance Practice".

Here is my reply:

-----------------------------------

Dear

It appears that you are insured with another insurance company and you wish to make a third party claim against NTUC Income.

Under our fair practice, you should contact us directly and allow us to settle the claim with you, Apparently, you did not.

You asked the workshop to handle the claim for you. The workshop probably submitted a claim that is much higher than the cost of
repair that can be done by our workshop.

There is also the question about liability. Is the truck insured by NTUC Income liable for the accident? This has to be
established.

I want you to realise that you have caused a lot of problem to us by your unfair approach. But I realise that you were not aware
about it.

I will ask xxxxxxx to look into this case, and see if he can help to expediate the matter. I hope that you agree with my
view.

Tan Kin Lian
CEO, NTUC Income

Take a cheaper medical plan

QUESTION

I attended A talk on medical insurance given by your manager. I was told that the rider (to cover the balance of the bill) has to be paid by cash and the premium will increase as I grow older.

Mr Tan, is there a limit, that is a certain period of age that can stop paying the premium for the rider. Or we must pay until we die. That means a lot of money to pay for the rider.

REPLY

Briefly, you can stop the rider at any time, so that you do not need to pay the increasing premium.

My advice is for you to take a lower cost plan, so that there is sufficient money to pay for the basic plan and the rider for as
long as possible.

Principle of profit sharing

QUESTION FROM JOURNALIST

Why do you need to charge higher premiums for takaful-based motor insurance?

ANSWER:

In a conventional product (ie profit not shared with policyholders), the shareholders take the entire risk. All profit or loss is borne entirely by the shareholders.

In a profit-sharing product, such as takaful insurance, a major portion of the profits goes to the participants. It is necessary to increase the premium rate by about 10% to 20%, to reduce the risk of loss (in case of bad claims). As the shareholders take only a modest portion of the profit, it is fair that they should bear a smaller risk of loss.

It is likely that the rebate (or share of profit) will be more than the additional premium, so that the net cost (after the rebate) will be attractive to the policyholder.

The profit sharing will also encourage the policyholders to work in cooperation to minimise the loss, as they can benefit from the share of profit. This will be good for the policyholders in the long run.

No extra charge for unlimited coverage

Last year, an insurer raises the lifetime limit on its Shield plan to $5 million and charges premiums that are 10% to 50% higher than a similar plan from NTUC Income (ie Incomeshield).

NTUC Income has recently removed the limit on lifetime claims. The policyholder can claim beyond $5 million a year.

We did not change our premium rates. Our premiums are much lower than the other Shield plan, and yet our coverage is better.

Agents still selling critical year

Some agents are still selling the "critical year" concept. They tell the customer that after paying for 10 to 12 years, they do not have to pay any more premium, and that this is guaranteed.

The agent ask the customer to read 50 pages of policy illustration that are written in vague language.

Here is my advice to the customer.

Write to the insurance company. Ask them to confirm the guarantee in writing. Ask them to specify that this guarantee does not depend on the future bonus rates and investment return.

You will get a different answer from the company.

Here is a better advice. Contact NTUC Income. We will give you our Ideal plan with a decreasing term rider. It is a better plan. It offers you the coverage and a better return.

Insurance should be based on sharing, fairness and transparency

Takaful insurance is operated on the Islamic principles of sharing, fairness and transparency.

In my view, all insurance transactions should be operated on these principles. As a cooperative society, NTUC Income has been observing these principles for the past 36 years.

When a person buys insurance, this person is joining an insurance pool. The premium should be calculated on the total claim amount and the expenses of operating the insurance pool, and shared fairly among the participants.

The insurance operator has the responsibility to manage the insurance pool well, pay the legitimate claims, keep the expenses low and make a fair margin. In this way, the premium can be kept low for all the insured participants.

The insurance operator should not charge a high premium and make excessive profit for shareholders. This will be unfair to the participants.

Sometimes, the insurance can produce a higher profit than expected. This could arise if the claim experience is favourable, or if the investments earn a better return.

Under takaful principles, a fair portion of the profits should be shared with the insured participants. The proportion to be shared should be fair and disclosed to the participants at the start.

Similarly, if the insurance pool pays more claim than expected, it is fair that they pay a higher premium and do not expect the shareholders to bear the loss.

It is possible for takaful principles to operate on general insurance, such as motor insurance and personal accident insurance.

Under this system, the premium charged to the participant has to be slightly higher than the market rates, maybe 10 to 20 percent higher.

The insurance operator should continue to manage the claims and expenses well and produce a profit. A fair portion of the profits should be shared with the insured participants. If this profit sharing is more than 10 or 20 percent of premium, the net cost to the insured participant will actually be lower under takaful insurance.

The insured participants can help to lower the cost in the following ways:

- avoid making excessive claims, eg motor repairs or health claims
- cooperate with the insurance operator to minimise the claims
- discourage other participants from making excessive claims
- reduce the admistrative cost by staying with the insurance operator for many years

Through this cooperative effort, the total cost can be reduced. This will be good for the insurance participants (ie the policyholders) and the insurance operator (ie the insurance company). It is win-win.

NTUC Income will be studying how to apply these principles to general insurance. We may introduce this profit sharing for certain products, such as personal accident insurance and motor insurance over the next 6 to 12 months.

We need to educate the public about the principles of sharing of risks and profits, and the principle of working together in cooperation.

We will offer a choice to our policyholders:

- pay a market rate based on a commercial contract
- pay a slightly higher premium rate and enjoy a share of profits

The profit sharing concept will be made available to Muslims and non-Muslims. Muslims like this concept as it it based on Syariah principles. Non-Muslims may like it as well.

Loss of earnings lead to less babies

The Institue of Public POlicy Research in the UK pubished a report. Many families delay having children, because women prefer to work and to earn an income. The cost of raising a child, ie the loss of earnings, is too high.

When they decide to have a baby later, it is too late. The women are less fertile. It was difficult to have a child at an older age.

This problem is faced in Singapore and in other countries. The problem in Singapore is probably worse.

What is the solution?

I have a radical proposal.

- give the mother $500 a child each month, until the child is 12 years old
- this is limited to 2 children per mother
- give free or subsidised further education to mother with 2 children

The cost of raising 2 children in each family will be borne by society. This gives an attractive option for some mothers to raise a family first, before they embark on a working career later.

I think that some countries, eg in Scandinavia, has adopted a bold approach and seem to be more successful in encouraging their people to have more children.

Assessment on the Spot

NTUC Income insures 290,000 vehicles. An average of 100 vehicles are involved in accidents daily.

Under the normal practice, the policyholder calls our hotline and ask for assistance. The policyholder is usually required to drive the vehicle to an accident reporting center (also called an Idac center) for the vehicle to be assessed. If the vehicle is badly damaged and cannot be driven, we will arrange for a tow truck to tow the vehicle to an Idac center.

Since 15 December 2005, NTUC Income has introduced another service. This is called "assessment on the spot". It provides for the mobile assessor to appear at the scene of the accident and to carry out an on-the-spot assessment.

The assessor takes about 15 minutes to reach the scene of the accident. The assessor assists our the policyholder and third party driver to assesses the damages at the scene of the accident. The assessor also helps them to complete the Singapore Accident Statement (SAS) forms, and to take photographs of the damaged vehicles and the scene of accident.

If any person is injured, the assessor calls an ambulance and the police. The vehicles will be towed to an IDAC center, if it cannot be driven. All documents and particulars will be forwarded to NTUC Income for further assistance or assessment of claim.

A total of 45 policyholders have used this service during the past 80 days. Based on a survey after the event, all the policyholders found this service to be useful.

Tan Kin Lian
CEO, NTUC Income

Dutch researcher: Innovative use of MMS

QUESTION:

I am a researcher for Endemol, a Dutch-based TV-production company.

I am currently working on a presentation on mobile marketing and mobile applications in the financial services industry. I just found out about NTUC's innovative MMS claim service which I think is very interesting!

Furthermore, when researching this service I found your blog, which I think is a very brave initiative! (I wouldn't know if a CEO of a Dutch insurance company would have the courage to do this, unfortunately)

I would like to highlight the NTUC MMS service in my presentation and would like to ask for some more information on the service. More specifically I have the following questions:

(deleted)

- Does NTUC have plans to launch other service-enhancing applications using mobile phones in the future.

REPLY:

Dear

We are delighted to be mentioned in your presentation. You may use our example.

We are now actively using SMS to send messages and reminders to our customers. It is working well.

Tan Kin Lian
CEO, NTUC Income

Make retirement housing more affordable

QUESTION FROM JOURNALIST:

Can you comment on the 30-year land for retirement housing? Does this make it more viable?

REPLY BY TAN KIN LIAN:

I prefer a special arrangement for the land to be tendered only for retirement housing. This will reduce the competition for the land from other type of use. It will bring down the price to a more affordable level for retirees.

It may be costly to buy a project for 30 years and to tear it down. The building cost has to be amortised over a short period.

It is better to allow for a longer period to amortised the building cost, for example 60 or 99 years.

The retirement housing can be owned by a cooperative, which can rent out to the retirees for a lifetime or a shorter period. The housing can be rented out to new tenants, after the retiree has passed away or moved out.

A retirement housing has the following advantages to the retirees:

- it is built to suit their special needs
- they have friends of similar ages that can spend time together
- they can go to the community to mix with younger people

I hope that my suggestions will give another perspective to reduce the cost to the retirees.

Reply: there is no catch in the top-up rider

20 February 2006

Editor
Forum
The Straits Times

I refer to the article, "Incomeshield removes limits on amount of lifetime claims", by Lorna Tan (Straits Times, 15 February 2006).

In the article, Mr Patrick Lim of Promiseland Independent was quoted as saying "Incomeshield's new top-up rider came with a catch. Unless it is an emergency case, policyholders are required to seek Income's approval for the treatment, by giving the insurer four days' notice prior to incurring the expense."

I wish to give our perspective of this feature.

NTUC Income recognises the concerns of some policyholders that the current limits are inadequate for major illnesses. The top up rider will pay for the additional expenses. In most cases, the policyholder can claim under the basic plan for the ordinary expenses, before hitting the current limit. The need for top-up expenses applies only to a small percentage of cases.

Our approach is to ensure that the larger medical expenses are kept at a reasonable level. If necessary, we will ask our own doctor to give a second opinion on the proposed treatment. This will be beneficial to the policyholder as well.

We aim aim to avoid excessive billing under a blanket "as charged" plan. We will manage the claims effectively and keep the premium affordable for our policyholders. This is important, as premium rates are expected to increase significantly when the policyholder gets older.

We have 800,000 people insured under our Incomeshield plan. As a cooperative society, our aim is to look after their best interest. We believe that a top up rider will pre-approval condition will serve them best in the long run.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Switch back to Incomeshield

To be sent to policyholders who switched away from Incomeshield recently.

22 February 2006

Incomeshield

You were previously insured under Incomeshield, but has transfered your insurance to another Shield plan. I wish to ask you to re-consider your decision.

Here are some key advantages of Incomeshield:

- The premium rates are lower than comparable plans
- It provides adequate coverage to meet most medical treatments
- You can buy a rider to cover the deductible and co-insurance
- You can buy a top-up rider to cover the major illness
- You enjoy unlimited lifetime coverage
- The insurance is guaranteed to be renewable for a liftime, beyond age 80 or 85.

Here is a brief comparison of the total premium payable over 40 years (from age 41 to 80 years) between Incomeshield and similar plans offered by other insurers:

Plan   NTUC Income     Other insurers
A        $30,000                $34,000 to $42,000
B        $18,000                $22,000 to $28,000

The coverages provided by the various plans are quite similar, except for some diffferences in the limits. The difference in premium can be as much as 60%. You can save up to $12,000 over 40 years, by insuring with NTUC Income. As the premium rates are expected to increase further in future years, it is important to choose an affordable plan.

If you wish to switch back to Incomeshield, you can call 6332-1133. We will arrange with CPF for you to switch bank and to get a refund of the proportionate amount paid to the other plan. You can also add the top-up rider to cover major illness.

If you wish to attend a dialogue session, you can call 6877-3366.

Tan Kin Lian
Chief Executive Officer

Set up a trust policy

Here is another idea of how a wealthy person can reduce estate duty:

- contribute a certain sum for each beneficiary in a trust policy now
- invest this sum in our combined fund or annuity
- allow the beneficiary to draw out a monthly sum from a certain birthday
- restrict the right of the beneficiary to draw out the principal sum

This gift is subject to estate duty, if the benefactor dies within 5 years of the transfer. This liability can be covered by a 5 year term policy.

RATIONALE: It is better for a wealthy person to transfer part of your wealth to your beneficiary now. If you do not want them to use the money immediately, you can set up a trust policy to ensure that the fund is withdrawn in instalments.

Use section 73 to reduce estate duty

Under section 73 of the Conveyancing and Law of Property Act, a policyholder can take up a life assurance policy and pledge it for the benefit of specified beneficiaries. Each policy will form a separate estate.

Here is an example of the use of Section 73 to save on estate duty

When a wealthy person passes away, the estate has to pay estate duty as follows:

- first $600,000 if free of tax
- next $x million will be taxed at 5%
- any excess will be taxed at 10%

The wealthy person can reduce the estate duty as follows:

- take a separate policy under section 73 for each beneficiary
- each policy is treated as a separate estate.
- the tax impact is lower.

Get a better medical insurance plan

Incomeshield offers you these attractive features!

* Unlimited Lifetime Coverage: Similar plans limit the amount that you can claim for a lifetime. Incomeshield covers has removed the lifetime limit.

* Guaranteed Renewability: Incomeshield guarantees that your cover will be renewable for a lifetime, beyond age 80, beyond age 85.

* Afforable premium: The premium payable under Incomeshield are 10% to 35% lower than similar plans charged by other insurers for similar coverage. As the premium increases sharply when you grow older, it is important for you to buy an affordable plan.

* Flexible Deductible: Incomeshield allows you to be treated in a lower class ward and to enjoy a lower deductible.

* Test and follow-up expenses: If your daily limit is fully utilised, the balance can be used to cover specialist consultation, examination and laboratory tests and post hospitalisation treatment.

* Riders: You can buy riders to cover the deductible and co-insurance, and to provide additional payments for critical illness

* No claim discount: If you have been insured for more than 3 years and have not made any claim in the preceding 12 months, you will enjoy a 10% discount on your premium (subject to review).

Good news: Lower cost for health and motor

In the budget statement, the Minister of Finance announced that insurance companies can recover the GST on payments for repairs for passenger cars and health care bills.

This will mean that the cost of health and motor insurance will reduced by 3% to 4%.

This request for recovery of GST was submitted by NTUC Income. Anyway, all policyholders will benefit from this change in GST, regardless of who they insure with.

NTUC Income has already reduced our motor premiums by 5% from 1 January 2006. For health insurance, we will not increase the premium for 2006 and 2007, in spite of rising bills.

The saving in cost will help us to delay any future increase in premium for a longer period.

Top up rider for Incomeshield

NTUC Income has announced our top-up rider for Incomeshield. It has been generally well received. Many policyholders welcome this rider.

A few members of the public have raised these questions:

1. Is NTUC Income contradicting itself by first denouncing as-charged plans and subsequently introducing it?

Reply: We recognise the concern of some policyholders that the current limits under Incomeshield are inadquate for the major illness. The top up rider will cover the more expensive treatments. We do not cover "as charged" as there are some controls against inflated bills.

2. Definition of "emergency"

REPLY: An "emergency" is a situation where it is not possible for the policyholder to contact us to get prior approval.

3. Whether its practical to wait for prior approval being being admitted to hospital.

Reply: In most cases, the policyholder can get prior approval for the major illness that are likely to exceed the limits under the basic plan. It is a good idea to have a second opinion before committing to a major treatment. Our doctor can provide the second opinion.

4. Can NTUC Income spell out the conditions more transparently? If not, I do not trust the conditions.

Reply: We have spelled out the principles quite transparently. In the actual implementation, we have to be practical and flexible. We are a cooperative, and will do our best for our policyholders.

Unlike other insurers, we do not aim to make a lot of profit from medical insurance. It is better for consumers to insure with us, as we aim to keep the cost affordable for them.

Parallel imports - pay less for your new car

NTUC Income is working with parallel importers to offer popular models of cars at a significant discount from the normal dealer prices. NTUC Income will provide the warranty for 3 years.

Tentatively, the savings can be 5% to 10%. More details will be announced later in the educational website:

www.KnowYourInsurance.com.sg

Combined funds earned 8.2% in 2005

Dear Policyholder,

Investment Linked Funds

Thank you for investing in our investment linked funds. I have good news for you again.

Our investment funds continued to perform well in 2005. The average weighted return was 6.8%, after deduction of fees. Total fund under management has grown to more than $5,000 million.

Our combined funds performed better. The average weighted return was 8.2%. It has also outperformed its benchmark over the past 3 years.

Our funds performed well, due to the expertise of our fund managers and our commitment to bring you best value.

In a recent survey, 88% of our policyholders who invested in the combined fund are happy with the returns. More than 50% are interested to increase their investment.

To find out more about our funds, I invite you to my investment seminars held once every two weeks. You can visit our website www.income.coop or call 6877 3366.

Tan Kin Lian
Chief Executive Officer

Get a better return for your baby bonus?

The parent is allowed to contribute up to $6,000 in a child development account (ie baby bonus). The governemnt matches with $6,000.

The total of $12,000 has to be invested with POSB which pays interest at 0.275% a year. Unused money in the account will be transferred to edusave when the child enters primary school. The investment in POSB is for 6 years.

Capital sum $12,000
Interest for 6 years at 0.275% p.a $199
Interest for 6 years at 2.5% p.a $1,916 (10 times more)!
Interest for 6 years at 5.5% p.a. $4,546 (not guaranteed, 22 times more!)

The difference is still sizeable.

We will find a way to convince the government to allow the money to be invested in our balanced fund to earn a higher return.

What is Islamic insurance?

The Muslim community prefer insurance that are based on takaful principles, such as:

- transparency in transactions
- fair dealings, meaning mutual benefit
- cooperation for a common good to assist those in need

Under these principles, the policyholders are fairly treated and receive a fair return on their savings. The insurance provider can also get a fair profit from operating their insurance business.

As a cooperative society, NTUC Income has been operating on principles that are similar to Islamic principles.

Some Muslim scholars even hold the view that takaful should be operated as a cooperative or mutual insurance.

Our Amanah fund ($300 million now, to be increased to $1 billion) is popular with both Muslims and non-Muslims.

Enjoy benefit as a "preferred policyholder"

NTUC Income is looking for a better way to serve our policyholders. We plan to offer special loan terms to a "preferred policyholder":

[] Lower interest rate
[] Pre-approval of loan
[] Hassle free application
[] Longer repayment period
[] Higher loan amount

The loan could be for:

[] loan for marriage
[] to buy a car or motor cycle
[] to buy a home
[] for education
[] other purpose

To quality as a "preferred policyholder", the policyholder must be insured for at least 2 years and have total regular saving of more than $5,000.

We will also extend this status to a policyholder whose parent has at least $20,000 in cash value with us.

We want to make it a benefit for a young policyholder to be a "preferred policyholder".

Earn on your investment immediately!

If you buy a regular premium ILP (investment linked plan), you are likely to pay 150% of your annual premium as distribution cost.

If you invest $300 a month, the distribution cost will take away $5,400 from your savings. It goes to pay the agent's commission. This is the money that should be earning an attractive return for you instead.

If you buy a ILP from NTUC Income, 100% of your savings is invested immediately. You can get a much higher return on the maturity date!

Wow! It makes more sense to invest with NTUC Income.

Unbelievable? Go to www.askdrmoney.com.

If you have recently bought an expensive ILP, you can still make a switch now to NTUC Income. We can help you to reduce your cost and start making an invsetment gain now.

Call 6788 1111