Some policyholder request that we do not send the loan statement to them. The probably do not want their family members to know that they have taken a loan against their insurance policy.
We are not able to handle this specific request. We have a duty to send a loan statement to our policyholders.
The policyholder can change the mailing address (eg use a postal box) or give us an e-mail address. We will send all correspendence to the postal box or e-mail address.
Saturday, June 24, 2006
Delay and mistake in handling upgrading of Incomeshield
A policyholder was unhappy with the delay and mistake in the handling of his upgrading of Incomeshield. I gave this reply to him.
As some other policyholders may be facing the same frustration, I wish to share this reply.
--------------------------------
Dear
I am sorry about the trouble that you went through in this matter.
We received 20,000 requests for upgrading the Incomeshield enhanced plan. Due to the large volume, some mistakes were made. Your case must be one of them.
Apart from the processing the work, my colleagues have to answer many difficult questions. They take a lot of time.
Several of my colleages were not able to take the work pressure. They resigned. This adds to the pressure on the remaining colleagues.
I hope that you will give us some time to sort out this problem. I do apologise for the trouble that you faced.
As some other policyholders may be facing the same frustration, I wish to share this reply.
--------------------------------
Dear
I am sorry about the trouble that you went through in this matter.
We received 20,000 requests for upgrading the Incomeshield enhanced plan. Due to the large volume, some mistakes were made. Your case must be one of them.
Apart from the processing the work, my colleagues have to answer many difficult questions. They take a lot of time.
Several of my colleages were not able to take the work pressure. They resigned. This adds to the pressure on the remaining colleagues.
I hope that you will give us some time to sort out this problem. I do apologise for the trouble that you faced.
Overwhelming response to Enhanced Incomeshield
24 June, 2006
Editor
Forum Page
Straits Times
We refer to the letter by Mr Harry Chia Kim Seng, “Why were some not told of Enhanced Incomeshield?” (Straits Times, 23 June).
NTUC Income introduced the Enhanced Incomeshield plan on 1 May 2006. Compared to the basic plan, the enhanced plan provides full coverage (excluding the mandatory deductible and co-insurance), but it requires payment of a slightly higher premium.
The details of the new plans were announced in the media and in our website, www.income.coop.
As this is a different plan, we asked our insurance advisers to contact the existing customers and advice them individually of the option to upgrade to the enhanced plan.
The response was overwhelming.We received 20,000 requests within a few weeks. My office colleagues were not able to cope with the large number of requests. Some have resigned due to the work pressure. We are trying to cope with this situation and to clear the backlog of work.
We have now decided to implement a different approach. We will be writing to all existing policyholders in batches over the next 12 months. We will be telling them about the new plan, and include a FAQ (frequently asked questions).
As we have 800,000 policyholders, we still have to handle 65,000 policyholders each month. We expect it to be a challenging exercise. We also have to recruit and train the additional people to handle the expected large volume of requests.
I hope that our policyholders can be patient and wait for the letter to be sent to them over the next 12 months. In the meantime, they are covered under the basic plan, which does cover a large part of the medical expenses anyway, subject to the existing limits.
More information on the Enhanced Incomeshield plan is available at our website, www.income.coop/insurance/enhanceshield.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Editor
Forum Page
Straits Times
We refer to the letter by Mr Harry Chia Kim Seng, “Why were some not told of Enhanced Incomeshield?” (Straits Times, 23 June).
NTUC Income introduced the Enhanced Incomeshield plan on 1 May 2006. Compared to the basic plan, the enhanced plan provides full coverage (excluding the mandatory deductible and co-insurance), but it requires payment of a slightly higher premium.
The details of the new plans were announced in the media and in our website, www.income.coop.
As this is a different plan, we asked our insurance advisers to contact the existing customers and advice them individually of the option to upgrade to the enhanced plan.
The response was overwhelming.We received 20,000 requests within a few weeks. My office colleagues were not able to cope with the large number of requests. Some have resigned due to the work pressure. We are trying to cope with this situation and to clear the backlog of work.
We have now decided to implement a different approach. We will be writing to all existing policyholders in batches over the next 12 months. We will be telling them about the new plan, and include a FAQ (frequently asked questions).
As we have 800,000 policyholders, we still have to handle 65,000 policyholders each month. We expect it to be a challenging exercise. We also have to recruit and train the additional people to handle the expected large volume of requests.
I hope that our policyholders can be patient and wait for the letter to be sent to them over the next 12 months. In the meantime, they are covered under the basic plan, which does cover a large part of the medical expenses anyway, subject to the existing limits.
More information on the Enhanced Incomeshield plan is available at our website, www.income.coop/insurance/enhanceshield.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Friday, June 23, 2006
NTUC Income: Cooperative, your partner for a better life
Life is so uncertain - jobs, health, family, happiness.
You are willing to work hard to give the best to your family and loved ones.
You need a strong organisation to back you - one who understands you, is trustworthy, willing to do the best for you above all else.
NTUC Income: Cooperative, your partner for a better life.
You are willing to work hard to give the best to your family and loved ones.
You need a strong organisation to back you - one who understands you, is trustworthy, willing to do the best for you above all else.
NTUC Income: Cooperative, your partner for a better life.
To Sudoku enthusiasts
Logic9 is our version of the popular game, Sudoku. It appears daily in Today paper and MyPaper.
Logic9 is available at several Fairprice supermarkets and bookstores. The pocketbook (suitable for your practice in the train, bus or plan) sells for $5.
It is available in 4 volumes. Each volume contains 128 puzzles at 4 levels. Each puzzle has an unique answer. The answers are given at the book (but you should not cheat). For the beginners, there are 4 tips which guide you on how solve the puzzle.
Yo can also buy the CD version (to play on your personal computer) for $5. It has 64 puzzles with 10 sets of symbols, giving a total of 640 combinatins.
For the experts, try volume 5 and 6 (available in August). It has complex puzzles at 4 levels. Each puzzle has more than 1 solution. At some point in the puzzle, you have to guess the number and see if it is right. If not, you can go back and change the number.
You can try it at www.income.coop/logic9
Good luck.
Logic9 is available at several Fairprice supermarkets and bookstores. The pocketbook (suitable for your practice in the train, bus or plan) sells for $5.
It is available in 4 volumes. Each volume contains 128 puzzles at 4 levels. Each puzzle has an unique answer. The answers are given at the book (but you should not cheat). For the beginners, there are 4 tips which guide you on how solve the puzzle.
Yo can also buy the CD version (to play on your personal computer) for $5. It has 64 puzzles with 10 sets of symbols, giving a total of 640 combinatins.
For the experts, try volume 5 and 6 (available in August). It has complex puzzles at 4 levels. Each puzzle has more than 1 solution. At some point in the puzzle, you have to guess the number and see if it is right. If not, you can go back and change the number.
You can try it at www.income.coop/logic9
Good luck.
Thursday, June 22, 2006
High customer satisfaction for motor repairs
Each month, we handle about 550 repairs of motor cars at our quality workshop. The repars are arranged by us through a tender. Here is the satisfaction rate:
There is a high satisfaction rate (more than 90%) given by our customers.
By arranging the repair, we are able to bring down the repair cost by about 20% and to reduce our premium rate. We are able to get high customer satisfaction.
Service by claim officer 96%
Service by IDAC 96%
Service of workshop 93%
Quality of repair 93%
Promptness of repair 95%
There is a high satisfaction rate (more than 90%) given by our customers.
By arranging the repair, we are able to bring down the repair cost by about 20% and to reduce our premium rate. We are able to get high customer satisfaction.
Bank customer is unhappy with a structured deposit
FROM A BANK CUSTOMER
Dear Mr Tan
I would like to share with you my agony and appreciate your advice.
In May 2004, I was persuaded to purchase a product named interest rate-linked structured deposit (5 years) by a local bank.
Barrier range of interest using 6 mth-SGD-SOR rated compiled by the Assn of Banks in Singapore.
Around Mar 2005, I was told the bank wanted to terminate the fund. It will start a new fund, adjusting the Barrier interest rate to 3.25 reason. The bank expected interest to go up.
The other terms and condition remain the same as the earlier deposit. I was also assured that it is unlikely to have zero payment and is a very safe product.
This year, my second quarter payment indicate that the interest is zero. I queried the officer and was told because the interest rate has shoot above the 3.25 barrier.
When I asked to withdraw the product, I was shocked that I had to pay a penalty of 10% to the bank.
The officer assured me the bank will try to close the fund when the interest rate comes down as it is too expensive for them to replace the fund now.
I felt so confused as in the cover letter the Pre-matured withdrawal Fee states:
"If a depositor wants to pre-maturely withdraw the deposit, it can only be done on a monthly basis and customer must pay a pre-mature withdrawal Fee, derived as the cost of replacing the above deposit at market rates for such tenor. A minimum of 1% will be imposed if such pre-matured withdrawal is made within the first 6 months. "
At that time, the officer told me that the pre-mature withdrawal fee is 1%. Now I was told is 10% (ie $7,000 plus penalty for my $50,000 structured deposit.)
The bank can terminate the fund early without penalty. When customer wants to terminated, the cusotmer has to pay l0% penalty, and not l% as mentioned early withdrawal fee and informed by the officer.
I bought this product earlier because I was told that it is like a fixed deposit, is very safe, and is not linked to any equities or currency. I would appreciate if you can enlighten me on this matter.
REPLY
I suggest that you write to the CEO of the bank and raise the facts as you have presented. Ask the CEO to explain why the penalty is 10% and why there is no interest payment. It is the bank's duty to explain the product to the customer.
Dear Mr Tan
I would like to share with you my agony and appreciate your advice.
In May 2004, I was persuaded to purchase a product named interest rate-linked structured deposit (5 years) by a local bank.
Barrier range of interest using 6 mth-SGD-SOR rated compiled by the Assn of Banks in Singapore.
Around Mar 2005, I was told the bank wanted to terminate the fund. It will start a new fund, adjusting the Barrier interest rate to 3.25 reason. The bank expected interest to go up.
The other terms and condition remain the same as the earlier deposit. I was also assured that it is unlikely to have zero payment and is a very safe product.
This year, my second quarter payment indicate that the interest is zero. I queried the officer and was told because the interest rate has shoot above the 3.25 barrier.
When I asked to withdraw the product, I was shocked that I had to pay a penalty of 10% to the bank.
The officer assured me the bank will try to close the fund when the interest rate comes down as it is too expensive for them to replace the fund now.
I felt so confused as in the cover letter the Pre-matured withdrawal Fee states:
"If a depositor wants to pre-maturely withdraw the deposit, it can only be done on a monthly basis and customer must pay a pre-mature withdrawal Fee, derived as the cost of replacing the above deposit at market rates for such tenor. A minimum of 1% will be imposed if such pre-matured withdrawal is made within the first 6 months. "
At that time, the officer told me that the pre-mature withdrawal fee is 1%. Now I was told is 10% (ie $7,000 plus penalty for my $50,000 structured deposit.)
The bank can terminate the fund early without penalty. When customer wants to terminated, the cusotmer has to pay l0% penalty, and not l% as mentioned early withdrawal fee and informed by the officer.
I bought this product earlier because I was told that it is like a fixed deposit, is very safe, and is not linked to any equities or currency. I would appreciate if you can enlighten me on this matter.
REPLY
I suggest that you write to the CEO of the bank and raise the facts as you have presented. Ask the CEO to explain why the penalty is 10% and why there is no interest payment. It is the bank's duty to explain the product to the customer.
Wheel cramp - release fee $100
I saw a sign next to a building: "Illegally parked vehicle will be wheel-clamped. Release fee $100".
Does the owner of the building have the right to do this? Is the fee reasonable or exorbitant? Can the owner charge $500?
Does the owner of the building have the right to do this? Is the fee reasonable or exorbitant? Can the owner charge $500?
Key features of Flexi Cash
Earn a better interest rate on your savings account!
Do you want to earn 3% on your savings? And have the flexibility to withdraw your money at any time?
Flexi Cash from NTUC Income is a better choice:
- this is an investment-linked plan
- your saving is invested in the money market
- the interest rate is currently around 3% (but may be subject to change with the market)
- minimum saving of $5,000
- saving is subject to a very small investment charge of 0.1% (during the promtion period)
- no restriction on withdrawal
Interested? Call 6788 1111
Do you want to earn 3% on your savings? And have the flexibility to withdraw your money at any time?
Flexi Cash from NTUC Income is a better choice:
- this is an investment-linked plan
- your saving is invested in the money market
- the interest rate is currently around 3% (but may be subject to change with the market)
- minimum saving of $5,000
- saving is subject to a very small investment charge of 0.1% (during the promtion period)
- no restriction on withdrawal
Interested? Call 6788 1111
High cost of education
Some financial planners alarm parents about the high cost of education.
For example, the cost of getting a basic degree is:
Assume cost increase by 4% per year for all countries. Estimates based on 4 year course, except for Australia (3 years). Cost for overseas education includes tuition fees and living expenses.
Assuming an investment return of 6% per annum (not guaranteed), the parent has to save between $250 to $1,750 a month.
That is a lot of money.
Fortunately, most students enjoy a subsidy (if they go to a university in Singapore) or if they qualify for a scholarship in a foreign university. Some of them work to pay for their expenses.
Still, it is useful for the parent to have some regular savings to provide part of the cost of their children's education.
I recommend a monthly saving of $100 to $300 per child. This depends on the financial means of the parents.
For example, the cost of getting a basic degree is:
Today 15 yrs Monthly
Later saving
Singapore $40,000 $72,000 $250
Australia $160,000 $288,000 $1,000
USA $280,000 $504,000 $1,750
UK $270,000 $486,000 $1,700
Assume cost increase by 4% per year for all countries. Estimates based on 4 year course, except for Australia (3 years). Cost for overseas education includes tuition fees and living expenses.
Assuming an investment return of 6% per annum (not guaranteed), the parent has to save between $250 to $1,750 a month.
That is a lot of money.
Fortunately, most students enjoy a subsidy (if they go to a university in Singapore) or if they qualify for a scholarship in a foreign university. Some of them work to pay for their expenses.
Still, it is useful for the parent to have some regular savings to provide part of the cost of their children's education.
I recommend a monthly saving of $100 to $300 per child. This depends on the financial means of the parents.
eNN: News about your neighbourhood
NTUC Income started the electronic newsletter a year ago.
100,000 subscribers now receive this e-newsletter free-of-charge twice a week, on Tuesdays and Fridays.
Our objective is to informs subscribers of special events in the neighbourhood and help to promote neighbourliness, local jobs and local businesses. It contains sales offers, services, announcements and much more.
We have divided Singapore into 20 neighbourhoods. I subscribe to Ang Mo Kio and Paya Lebar / East Coast neighbourhoods.
You can go to www.enn.com.sg to subscribe eNN of your own neighbourhood. Subscription is FREE.
100,000 subscribers now receive this e-newsletter free-of-charge twice a week, on Tuesdays and Fridays.
Our objective is to informs subscribers of special events in the neighbourhood and help to promote neighbourliness, local jobs and local businesses. It contains sales offers, services, announcements and much more.
We have divided Singapore into 20 neighbourhoods. I subscribe to Ang Mo Kio and Paya Lebar / East Coast neighbourhoods.
You can go to www.enn.com.sg to subscribe eNN of your own neighbourhood. Subscription is FREE.
Tuesday, June 20, 2006
Cross selling works wonders
Our consultant at the business center followed up on a customer who bought a low cost term insurance (i-term).
The consultant informed the customer about Enhanced Incomeshield. The customer is convinced about this plan. She took it for herself and her son. She is getting the whole family to join the plan.
Cross selling works wonders!
The consultant informed the customer about Enhanced Incomeshield. The customer is convinced about this plan. She took it for herself and her son. She is getting the whole family to join the plan.
Cross selling works wonders!
Customer likes our website
Dear sir,
Thank you for your prompt reply. I'm relieved I won't be rejected or loaded on renewal of our Incomeshield plan, should I get sick after getting insured.
I already read all the details provided in the website before submitting my application.
NTUC Income has my vote for the best website among all the insurers because it's easy to navigate and all the information is there, including the policy documents. This way, I know exactly what I'm buying, thanks.
Thank you for your prompt reply. I'm relieved I won't be rejected or loaded on renewal of our Incomeshield plan, should I get sick after getting insured.
I already read all the details provided in the website before submitting my application.
NTUC Income has my vote for the best website among all the insurers because it's easy to navigate and all the information is there, including the policy documents. This way, I know exactly what I'm buying, thanks.
Monday, June 19, 2006
97% prefer the lower premium
Under our quality plan, we carry out the repair as follows:
- if the damages involve the engine or integrity of the car, we will repair at the dealer's workshop
- for minor repair, we repair at our quality workshop and take over the warranty (if it is voided by the dealer).
Earlier this year, we provided an option for the owner to pay a 25% loading in the premium (for a car less than 3 years old), for the repairs to be done at the dealer's workshop, in all cases (including minor repairs).
Out of 3,000 cases that are eligible for this optional plan, only 3% are willing to pay the higher premium. The other 97% prefer the lower premium, and accept the standard package.
- if the damages involve the engine or integrity of the car, we will repair at the dealer's workshop
- for minor repair, we repair at our quality workshop and take over the warranty (if it is voided by the dealer).
Earlier this year, we provided an option for the owner to pay a 25% loading in the premium (for a car less than 3 years old), for the repairs to be done at the dealer's workshop, in all cases (including minor repairs).
Out of 3,000 cases that are eligible for this optional plan, only 3% are willing to pay the higher premium. The other 97% prefer the lower premium, and accept the standard package.
Lessons on market volatility
Three weeks ago, the FED chairman, Bernarke, made some comments about inflation in the USA. It caused the global stockmarkets to fall by 10% to 20%.
A few days ago, he made some positive comments. The global stockmarket recovered by 2% to 4%.
What are the lessons?
- the stockmarkets are volatile
- a long term investor can ignore the volatility
- the monetary authorities around the world want to have a robust stockmarket
Any conclusion? It is better to invest when the stockmarkets are down?
A few days ago, he made some positive comments. The global stockmarket recovered by 2% to 4%.
What are the lessons?
- the stockmarkets are volatile
- a long term investor can ignore the volatility
- the monetary authorities around the world want to have a robust stockmarket
Any conclusion? It is better to invest when the stockmarkets are down?
Sunday, June 18, 2006
NTUC Income will support parallel importers of cars
NTUC Income will support parallel importers of cars in the following ways:
- get customers for them
- provide financing
- provide warranty, damage and liability insurance
We have made contacts with several parallel importers who are willing to bring in cars on the orders from our customers.
We hope to be able to save a few thousand dollars to car owners for the purchase of their cars, including COEs, and also on the cost of servicing their cars (as the general workshops are able to reduce the cost significantly).
Wait for further announcement.
- get customers for them
- provide financing
- provide warranty, damage and liability insurance
We have made contacts with several parallel importers who are willing to bring in cars on the orders from our customers.
We hope to be able to save a few thousand dollars to car owners for the purchase of their cars, including COEs, and also on the cost of servicing their cars (as the general workshops are able to reduce the cost significantly).
Wait for further announcement.
Customer says: Thank you for insuring me!
FROM A CUSTOMER
Dear Mr Tan,
I always have difficulty getting health shield plans due to my medical conditions. That is until I tried applying for NTUC IncomeShield!
I thought I will go through rounds of medical examination again and the insurer will drag my case. But not with your company! I walked into your Tampines Business Centre on 29 May and received the policy document on 14 June 06. What promptness and efficiency!
I also thought loading will be imposed. Surprisingly, NTUC Income didn't! Very thankful for that. More than that, there are even vouchers given to me for taking up the policy!
I wish to commend your staff Ms Wendy Soong at the Tampines Business Centre as well. She answered my questions well. Insuring myself with NTUC Income has been a pleasant experience indeed.
Dear Mr Tan,
I always have difficulty getting health shield plans due to my medical conditions. That is until I tried applying for NTUC IncomeShield!
I thought I will go through rounds of medical examination again and the insurer will drag my case. But not with your company! I walked into your Tampines Business Centre on 29 May and received the policy document on 14 June 06. What promptness and efficiency!
I also thought loading will be imposed. Surprisingly, NTUC Income didn't! Very thankful for that. More than that, there are even vouchers given to me for taking up the policy!
I wish to commend your staff Ms Wendy Soong at the Tampines Business Centre as well. She answered my questions well. Insuring myself with NTUC Income has been a pleasant experience indeed.
Friday, June 16, 2006
Stockmarkets will recover
Compared to the peak a few weeks ago, the stockmarkets have fallen by 9% to 17% to the lows.
Many of these markets are now recovering. If you invest in the stockmarket now, you pay a much lower price than the recent peak.
----------------------------------
Is there a chance that it may go lower?
Yes, but it is a small chance. The worse case scenario was during September 1987. The stockmarket crashed by 19% over 2 months. However, the crash was temporary. Within 11 months, it fully recovered to the level before the crash.
Peak Low %
Nikkei Japan 17291 14218 -17.8%
STI, Singapore 2660 2297 -13.6%
Nasdaq, USA 2345 2072 -11.6%
Dow Jones, USA 11642 10706 -8.0%
Many of these markets are now recovering. If you invest in the stockmarket now, you pay a much lower price than the recent peak.
----------------------------------
Is there a chance that it may go lower?
Yes, but it is a small chance. The worse case scenario was during September 1987. The stockmarket crashed by 19% over 2 months. However, the crash was temporary. Within 11 months, it fully recovered to the level before the crash.
Money market fund earns good return
Here is the return on our money market fund, net of expenses, during the past 12 months:
The interest rate has been increasing during the past year. The interest for the latest period is 0.74% for 3 months, or 2.96% per year.
Interest rate is likely to increase over the next few months. The return from the money market fund is likely to exceed 3% (but not guaranteed).
3 months to:
31 Aug 05 0.47%
31 Nov 05 0.45%
31 Feb 06 0.67%
31 May 06 0.74%
The interest rate has been increasing during the past year. The interest for the latest period is 0.74% for 3 months, or 2.96% per year.
Interest rate is likely to increase over the next few months. The return from the money market fund is likely to exceed 3% (but not guaranteed).
Thursday, June 15, 2006
Bonus Cut and Restoration
A policyholder complained that his insurer (not NTUC Income) cut bonuses on all insurance policies in bad times but restored them selectively in good times.
He had two endowment policies outstanding with the company. The bonuses were cut in 1999 and have not been restored since then and the terminal bonus is still in suspension.
According to him, the insurer "was trigger happy to cut bonus rates on its policies during bad times, but during good or better times, restoration was applicable only to policies that matured in certain years. Why was restoration of bonus rates not accorded to all its policies in the same spirit as during the reduction exercise?"
He had two endowment policies outstanding with the company. The bonuses were cut in 1999 and have not been restored since then and the terminal bonus is still in suspension.
According to him, the insurer "was trigger happy to cut bonus rates on its policies during bad times, but during good or better times, restoration was applicable only to policies that matured in certain years. Why was restoration of bonus rates not accorded to all its policies in the same spirit as during the reduction exercise?"
Customer is happy with business center
A customer visited our Business Centre to ask about motor insurance. Our insurance consultant attended to her.
Our premiums are slightly lower than the current insurer. In particular, she liked our convenient operating hours which is until 6:30pm.
She was very pleased with our service. She SMS to say, "Many thanks. This is truly customer service!"
Our premiums are slightly lower than the current insurer. In particular, she liked our convenient operating hours which is until 6:30pm.
She was very pleased with our service. She SMS to say, "Many thanks. This is truly customer service!"
A buying opportunity?
The market correction has been more severe than I had expected.
The Japan market has dropped by 20% from its peak. The Singapore market dropped by about 15%. The US market dropped by about 10%.
The combined fund (growth) from NTUC Income probably dropped by about 7% to 10%. It dropped less than the other markets, due to a 30% component invested in bonds.
Here is the good news for long term investors. You have the chance to invest now, at a much lower price. And benefit from the long term appreciation of the investment funds.
I have an additional $100,000 to be invested. I shall be deciding within the next two weeks.
The Japan market has dropped by 20% from its peak. The Singapore market dropped by about 15%. The US market dropped by about 10%.
The combined fund (growth) from NTUC Income probably dropped by about 7% to 10%. It dropped less than the other markets, due to a 30% component invested in bonds.
Here is the good news for long term investors. You have the chance to invest now, at a much lower price. And benefit from the long term appreciation of the investment funds.
I have an additional $100,000 to be invested. I shall be deciding within the next two weeks.
Tuesday, June 13, 2006
Additional cover for renting a car overseas
If you rent a car for driving overseas, you may be required to pay up an additional $20 a day for the additional third party cover (over and above the basic cover provided in the basic rental). This is quite high.
If you are insured with NTUC Income and have NCD of 20% or more, you can get this additional cover at a 50% discount from us. You can save $10 per day.
Call 6332 3456. More details can be found in our website.
If you are insured with NTUC Income and have NCD of 20% or more, you can get this additional cover at a 50% discount from us. You can save $10 per day.
Call 6332 3456. More details can be found in our website.
Are pre-existing conditions excluded?
QUESTION
I am a civil servant. I have been covered under CPF Medishield since its introduction. I did not opt out from Medishield, even through I am covered for medical benefits by the civil service.
I attended your educational talk and wish to move to IncomeShield for better coverage. But I am afraid that any pre-existing illness will not be covered under IncomeShield. What is your advice
REPLY
If you wish to know whether you can be covered under Incomeshield, all you have to do is put in an application. It cost you nothing.
If there is any exclusion for pre-existing conditions, we will ask for your agreement. The exclusion, if any, will be endorsed on your policy.
If your pre-existing conditions are properly disclosed to us and are not endorsed as exclusion, you will be covered.
When you opt for Incomeshield, you will continue to be covered by Medishield for all your pre-existing conditions.
I am a civil servant. I have been covered under CPF Medishield since its introduction. I did not opt out from Medishield, even through I am covered for medical benefits by the civil service.
I attended your educational talk and wish to move to IncomeShield for better coverage. But I am afraid that any pre-existing illness will not be covered under IncomeShield. What is your advice
REPLY
If you wish to know whether you can be covered under Incomeshield, all you have to do is put in an application. It cost you nothing.
If there is any exclusion for pre-existing conditions, we will ask for your agreement. The exclusion, if any, will be endorsed on your policy.
If your pre-existing conditions are properly disclosed to us and are not endorsed as exclusion, you will be covered.
When you opt for Incomeshield, you will continue to be covered by Medishield for all your pre-existing conditions.
Approved: 8 cases of reverse mortgage on HDB flats
We have approved 8 cases of reverse mortgage on HDB flats during the past 3 months for a total of $657,000. The average loan is $82,000, to be withdrawn in monthly installment over the loan period (of up to 20 years).
Another 4 cases are being processed.
We received many enquiries, but the number of applications is still small at this time.
Another 4 cases are being processed.
We received many enquiries, but the number of applications is still small at this time.
Monday, June 12, 2006
Competitor's agent tell a blatant lie!
A customer ask a competitor's agent, "Is it true that the investment-linked plan from your company takes away 19 months of my savings, compared to 7 months by NTUC Income?"
The agent said, "Oh, our 19 monhts is already built into the premium. The 9 months from NTUC Income is an additional charge."
It is a blatant lie. But, the agent knows how to tell it in a convincing way. The customer is too confused and afraid to ask for the agent to explain.
Lesson: The only way for the competitor's agent to get away with a high charge of 19 months is to tell a blatant lie. Do not trust this agent. He is only interested to earn a big commision on the sale.
The agent said, "Oh, our 19 monhts is already built into the premium. The 9 months from NTUC Income is an additional charge."
It is a blatant lie. But, the agent knows how to tell it in a convincing way. The customer is too confused and afraid to ask for the agent to explain.
Lesson: The only way for the competitor's agent to get away with a high charge of 19 months is to tell a blatant lie. Do not trust this agent. He is only interested to earn a big commision on the sale.
Sunday, June 11, 2006
An idea - start the school year in 4 enrolment dates
I suggest that the school year should have 4 enrolment dates, ie in January, April, July and October.
This allows parents to send their child to a school immediately after the birthday, rather than to wait for up to 11 months.
We can divide the schools into 4 groups, to start at the various enrolment dates.
In the future, parents can plan to have their children born in the same time of the year, so that they can go to the same school.
If there are born at different months of the year, the parent can still find the enrolment date that is most convenient for both children.
This approach will also help to spread the school holdays throughout the year. As the school holidays are spread out, parents do not have to pay a higher price for air tickets and hotels.
It is time to move to a more flexible system.
This allows parents to send their child to a school immediately after the birthday, rather than to wait for up to 11 months.
We can divide the schools into 4 groups, to start at the various enrolment dates.
In the future, parents can plan to have their children born in the same time of the year, so that they can go to the same school.
If there are born at different months of the year, the parent can still find the enrolment date that is most convenient for both children.
This approach will also help to spread the school holdays throughout the year. As the school holidays are spread out, parents do not have to pay a higher price for air tickets and hotels.
It is time to move to a more flexible system.
High pressure sales by a bank?
My friend told me this story.
A bank advertised interest rate of 3% for a fixed deposit of more than $50,000. This is only available when you visit the branch.
If you wish to place the same fixed deposit through their internet website, the bank pays only 1.5% per annum.
When he visited the branch, he is advised by the bank's marketing officer to change to a investment fund or structured product.
My friend is knowledgeable. So, he knows how to resist the marketing pitch.
But he said that less educated people may be persuaded to invest in the risker product, without understanding the risk.
Perhaps, it is time for the bank's marketing practice to be reviewed?
A bank advertised interest rate of 3% for a fixed deposit of more than $50,000. This is only available when you visit the branch.
If you wish to place the same fixed deposit through their internet website, the bank pays only 1.5% per annum.
When he visited the branch, he is advised by the bank's marketing officer to change to a investment fund or structured product.
My friend is knowledgeable. So, he knows how to resist the marketing pitch.
But he said that less educated people may be persuaded to invest in the risker product, without understanding the risk.
Perhaps, it is time for the bank's marketing practice to be reviewed?
Pay motor insurance and road tax in monthly installments?
Tentative (subject to change).
FAQ (frequently asked questions)
Motor Insurance Plan G
1. How do I save up to 15% on motor insurance?
NTUC Income offer competitive rates for motor insurance. For many models of cars, our rates are up to 15% lower than our competitors.
If you are now insured with another insurer and you move to us, you can enjoy a saving of up to 15%.
Just call us for a quotation. You can compare for yourself.
2. How do I pay my premium in 12 monthly installments, free of interest?
If you insure your car under this plan, we allow you to pay your premium in 12 monthly installments by GIRO. This will be free of interest.
Example:
Insurance premium: $600 a year
You can pay in 12 monthly installments of $50.
We require you to pay the installment 1 month in advance. At the start, you will pay 2 monthly installments. After that, we will collect the monthly instalments every month through GIRO.
3. How do I pay my road tax in 12 monthly installments?
You can also apply for an advance to pay your road tax. We will collect it from you in 12 monthly installments with a flat interest of 3%.
Example:
Road tax $1,200
You can pay in 12 monthly installments of $100 plus 3% = $103.
This will be combined with the monthly installment of the insurance premium.
4. How do I apply to join this plan?
Call 6788 1111 at least 2 months before the renewal date and sign an agreement and GIRO form. We will notify the Land Transport Authority and pay the road tax on your behalf.
If you already have a GIRO form with NTUC Income, we can use your existing GIRO. You do not need to sign the form again.
5. What happens if I fail to pay the instalment?
We will contact and remind you. You can pay within 14 days. There is a service charge of $3.
If you still do not pay the installment after our telephone reminder, and do not get our agreement for an extention, we will cancel your insurance policy and notify Land Transport Authority. Under the law, you will not be allowed to use your car.
We will also take legal action on you for the balance of the road tax that you have not paid. The legal cost will be charged on you.
In future, you will not be allowed to enjoy this privilege with NTUC Income.
6. What do I renew my insurance in the future?
We will send a letter to you 2 months before the renewal date and notify you about the premium and road tax for the next year. We will call you to get your confirmation to continue this arrangement.
7. Can I go through an agent?
You can go through an agent for the first year. In subsequent years, we will deal with you directly on the renewal and the road tax.
8. Can I cancel my insurance, if I find that another insurance company can offer a lower rate to me?
We believe that our premium rate will be lower than the market.
However, if you can find another insurance company willing to give you a better rate, and you wish to cancel your insurance with us, we will refund to you 85% of the proportionate premium. The 15% is used to cover our expenses.
Example:
If the premium is $600 and you cancel the insurance after 2 months, you will get a refund of 85% of $600 X 10/12 = $425.
End of FAQ
FAQ (frequently asked questions)
Motor Insurance Plan G
1. How do I save up to 15% on motor insurance?
NTUC Income offer competitive rates for motor insurance. For many models of cars, our rates are up to 15% lower than our competitors.
If you are now insured with another insurer and you move to us, you can enjoy a saving of up to 15%.
Just call us for a quotation. You can compare for yourself.
2. How do I pay my premium in 12 monthly installments, free of interest?
If you insure your car under this plan, we allow you to pay your premium in 12 monthly installments by GIRO. This will be free of interest.
Example:
Insurance premium: $600 a year
You can pay in 12 monthly installments of $50.
We require you to pay the installment 1 month in advance. At the start, you will pay 2 monthly installments. After that, we will collect the monthly instalments every month through GIRO.
3. How do I pay my road tax in 12 monthly installments?
You can also apply for an advance to pay your road tax. We will collect it from you in 12 monthly installments with a flat interest of 3%.
Example:
Road tax $1,200
You can pay in 12 monthly installments of $100 plus 3% = $103.
This will be combined with the monthly installment of the insurance premium.
4. How do I apply to join this plan?
Call 6788 1111 at least 2 months before the renewal date and sign an agreement and GIRO form. We will notify the Land Transport Authority and pay the road tax on your behalf.
If you already have a GIRO form with NTUC Income, we can use your existing GIRO. You do not need to sign the form again.
5. What happens if I fail to pay the instalment?
We will contact and remind you. You can pay within 14 days. There is a service charge of $3.
If you still do not pay the installment after our telephone reminder, and do not get our agreement for an extention, we will cancel your insurance policy and notify Land Transport Authority. Under the law, you will not be allowed to use your car.
We will also take legal action on you for the balance of the road tax that you have not paid. The legal cost will be charged on you.
In future, you will not be allowed to enjoy this privilege with NTUC Income.
6. What do I renew my insurance in the future?
We will send a letter to you 2 months before the renewal date and notify you about the premium and road tax for the next year. We will call you to get your confirmation to continue this arrangement.
7. Can I go through an agent?
You can go through an agent for the first year. In subsequent years, we will deal with you directly on the renewal and the road tax.
8. Can I cancel my insurance, if I find that another insurance company can offer a lower rate to me?
We believe that our premium rate will be lower than the market.
However, if you can find another insurance company willing to give you a better rate, and you wish to cancel your insurance with us, we will refund to you 85% of the proportionate premium. The 15% is used to cover our expenses.
Example:
If the premium is $600 and you cancel the insurance after 2 months, you will get a refund of 85% of $600 X 10/12 = $425.
End of FAQ
Saturday, June 10, 2006
Enhanced Incomeshield
1) Last year, you said that NTUC Income will not be offering a "as charged" plan. Why do you change your mind?
Reply: Here are three reasons why we decided to introduce the enhanced plan to offer "as charged" coverage:
- Some policyholders indicate that they are willing to pay a higher premium for the "as charged" plan. We wish to meet the wishes of these policyholders.
- Our "as charged" plan requires prior approval, except for emergency. This is to allow our medical adviser to give a second opinion of the proposed treatment and to avoid unnecessary treatment. In most cases, approval will be given within one day.
- We will continue to offer the basic Incomeshield, which is subject to limits for each category of treatment. Our basic plan will continue to be the most affordable in the market.
Initially, the enhanced Incomeshield cost about 15% higher than the similar basic plan, but this difference may widen in the future, based on the claim experience. We will try our best to keep the premium rates at an affordable level for the enhanced plan. It depends on our ability to prevent escalation in medical expenses.
If the gap widens, some policyholders may wish to opt back into the similar basic plan (which will continue to be available) to enjoy the lower premium rates.
Our strategy is to offer a choice for consumers.
2)An industry observer said that insurers are not fighting to get a bigger piece of the pie, but instead its a fight for healthy lives Did you face problems with unhealthy policyholders who wish to upgrade to "as charged plans.?
Reply: We will allow our existing policyholders to upgrade to the enhanced plan without any underwriting on the next renewal date. This will be hassle free. They can upgrade to the enhanced plan during this window period, even if their health condition does not meet the normal acceptance standard.
This is a privilege that we wish to give to all existing policyholders of the basic Incomeshield plan.
After the window period, they will be required to provide evidence of good health for upgrading at a future renewal date.
3) Your "as-charged" plan requires the policyholder to give 4 days advance notice before being treated in a hospital. How is this being managed? If a policyholder fails to fulfill this condition, is there a penalty?
Reply: Under the Enhanced Incomeshield Plan, we ask the policyholder to call us, four working days prior to admission to hospital to seek our guidance on admission and coverage.
We will check that the proposed medical treatment and the charges are reasonable, and give our approval as soon as possible. This can normally be done within one or two working days.
If there is any doubt, we will seek a second opinion of our medical adviser or a panel of specialists. This opinion can be obtained quite quickly.
We believe that this approach will help to reduce the possibility of unnecessary treatment or inflated charges.
In the case of emergency, there is no need to get our prior approval.
If a policyholder overlook to get our prior approval, we will still process the claim. If the medical bill is reasonably and necessary, it will be paid in full. In other cases, we will still make a partial payment, based on the limits that are provided under the basic plan.
4) What is the rate of claims for your various medical insurance plans?
We process about 60,000 claims a year, representing about 7.5% of the policyholders covered under our Incmeshield plan.
5) In the event of a dispute, where do NTUC Income and the consumer take their claims to?
Reply: We refer all disputes to an independent third party, such as the Financial Industry Dispute Resolution Center (FiDREC). Less than 1 percent of claims lead to a dispute.
6) Do you expect many new policyholders, or existing policyholders to upgrade to the "as charged" plan?
Reply: We are getting good response from existing policyholders to upgrad to the enhanced plan. We are getting many new applications as well.
Reply: Here are three reasons why we decided to introduce the enhanced plan to offer "as charged" coverage:
- Some policyholders indicate that they are willing to pay a higher premium for the "as charged" plan. We wish to meet the wishes of these policyholders.
- Our "as charged" plan requires prior approval, except for emergency. This is to allow our medical adviser to give a second opinion of the proposed treatment and to avoid unnecessary treatment. In most cases, approval will be given within one day.
- We will continue to offer the basic Incomeshield, which is subject to limits for each category of treatment. Our basic plan will continue to be the most affordable in the market.
Initially, the enhanced Incomeshield cost about 15% higher than the similar basic plan, but this difference may widen in the future, based on the claim experience. We will try our best to keep the premium rates at an affordable level for the enhanced plan. It depends on our ability to prevent escalation in medical expenses.
If the gap widens, some policyholders may wish to opt back into the similar basic plan (which will continue to be available) to enjoy the lower premium rates.
Our strategy is to offer a choice for consumers.
2)An industry observer said that insurers are not fighting to get a bigger piece of the pie, but instead its a fight for healthy lives Did you face problems with unhealthy policyholders who wish to upgrade to "as charged plans.?
Reply: We will allow our existing policyholders to upgrade to the enhanced plan without any underwriting on the next renewal date. This will be hassle free. They can upgrade to the enhanced plan during this window period, even if their health condition does not meet the normal acceptance standard.
This is a privilege that we wish to give to all existing policyholders of the basic Incomeshield plan.
After the window period, they will be required to provide evidence of good health for upgrading at a future renewal date.
3) Your "as-charged" plan requires the policyholder to give 4 days advance notice before being treated in a hospital. How is this being managed? If a policyholder fails to fulfill this condition, is there a penalty?
Reply: Under the Enhanced Incomeshield Plan, we ask the policyholder to call us, four working days prior to admission to hospital to seek our guidance on admission and coverage.
We will check that the proposed medical treatment and the charges are reasonable, and give our approval as soon as possible. This can normally be done within one or two working days.
If there is any doubt, we will seek a second opinion of our medical adviser or a panel of specialists. This opinion can be obtained quite quickly.
We believe that this approach will help to reduce the possibility of unnecessary treatment or inflated charges.
In the case of emergency, there is no need to get our prior approval.
If a policyholder overlook to get our prior approval, we will still process the claim. If the medical bill is reasonably and necessary, it will be paid in full. In other cases, we will still make a partial payment, based on the limits that are provided under the basic plan.
4) What is the rate of claims for your various medical insurance plans?
We process about 60,000 claims a year, representing about 7.5% of the policyholders covered under our Incmeshield plan.
5) In the event of a dispute, where do NTUC Income and the consumer take their claims to?
Reply: We refer all disputes to an independent third party, such as the Financial Industry Dispute Resolution Center (FiDREC). Less than 1 percent of claims lead to a dispute.
6) Do you expect many new policyholders, or existing policyholders to upgrade to the "as charged" plan?
Reply: We are getting good response from existing policyholders to upgrad to the enhanced plan. We are getting many new applications as well.
Flexi Cash is now launched
Some details are found in this webpage:
http://www.income.coop/insurance/FlexiCash/
Flexi-Cash works like a bank account. You can put money in at any time. You will earn an interest rate on your money that is linked to the money market.
Currently, the money earns about 3% per annum. It will change with the interest rate in the money market. As interest rate is likely to increase, you can earn more.
The money market (or interbank rate) is what the bank pays to get money from other banks. Usually, the bank will pay 1% to 1.5% less than the money market rate for their fixed deposit.
In NTUC Income's case, we pay 0.25% less than the money market rate. This means that you can earn about 1% more than fixed deposit.
There is a small investment charge of 0.1% when you put money into this account. So, if you keep for more than 1 month, you will get a better return than fixed deposit. Anyway, your money is not locked up for 1 year. It can be taken out at any time.
If you are interested, call 6788 1111.
http://www.income.coop/insurance/FlexiCash/
Flexi-Cash works like a bank account. You can put money in at any time. You will earn an interest rate on your money that is linked to the money market.
Currently, the money earns about 3% per annum. It will change with the interest rate in the money market. As interest rate is likely to increase, you can earn more.
The money market (or interbank rate) is what the bank pays to get money from other banks. Usually, the bank will pay 1% to 1.5% less than the money market rate for their fixed deposit.
In NTUC Income's case, we pay 0.25% less than the money market rate. This means that you can earn about 1% more than fixed deposit.
There is a small investment charge of 0.1% when you put money into this account. So, if you keep for more than 1 month, you will get a better return than fixed deposit. Anyway, your money is not locked up for 1 year. It can be taken out at any time.
If you are interested, call 6788 1111.
Friday, June 09, 2006
It's nice to hear from a happy customer
I was at the check-in queue at the airport yesterday (travelling economy class to Hanoi).
"Hi, Mr Tan".
I turned and saw a woman with a happy smile. "My name is Madam Tan. All of my insurance policies are with NTUC. I recognise you."
We shook hands. She told me that she was travelling to Bangkok.
She turned to her two companions and introduced me, "This is Mr Tan, CEO of NTUC Income". I shook hands with her friends.
It is nice to hear from a happy customer, who is proud to be with NTUC Income!
"Hi, Mr Tan".
I turned and saw a woman with a happy smile. "My name is Madam Tan. All of my insurance policies are with NTUC. I recognise you."
We shook hands. She told me that she was travelling to Bangkok.
She turned to her two companions and introduced me, "This is Mr Tan, CEO of NTUC Income". I shook hands with her friends.
It is nice to hear from a happy customer, who is proud to be with NTUC Income!
Personal Accident + Infectious Disease
1. When was this new policy launched?
NTUC Income is the first insurer in Singapore to roll out this innovative policy that covers personal accident and infectious diseases at a low premium. The insurance plan provides worldwide cover, 24 hours a day. It was launched in April 2006.
2. Why was this introduced?
In recent years, there is a spread of infections disease, such as SARS, bird flu and dengue fever.
We launched this policy to provide an added coverage to our personal accident policy. 14 infectious diseases are covered.
3. Is the premium under PA+ID cheaper than a life insurance policy?
The premium for PA+ID is $100 a year and it covers $50,000 on death by accident and infectious disease.
The premium for a life insurance policy covering the same amount depends on age and term of policy, and will probably be $1,000 or higher.
NTUC Income is the first insurer in Singapore to roll out this innovative policy that covers personal accident and infectious diseases at a low premium. The insurance plan provides worldwide cover, 24 hours a day. It was launched in April 2006.
2. Why was this introduced?
In recent years, there is a spread of infections disease, such as SARS, bird flu and dengue fever.
We launched this policy to provide an added coverage to our personal accident policy. 14 infectious diseases are covered.
3. Is the premium under PA+ID cheaper than a life insurance policy?
The premium for PA+ID is $100 a year and it covers $50,000 on death by accident and infectious disease.
The premium for a life insurance policy covering the same amount depends on age and term of policy, and will probably be $1,000 or higher.
Wednesday, June 07, 2006
What is the secret of success for NTUC Income?
I presented a paper on branding at a conference. One question asked is, "How much of the success of NTUC Income is due to the personal contribution of Tan Kin Lian?"
My reply:
The success of NTUC Income is largely driven by its core values:
- quality products
- low cost
- fair treatment of policyholders
As a cooperative, we do not seek to make excessive profits for shareholders. We distribute most of our surplus to our policyholders.
Over the years, I work hard to get the my colleagues to feel passionate about our cooperative values, and look after the best interest of our customers. This strategy will ensure the long term success of NTUC Income.
As the CEO, my task is to articulate the cooperative values and to communicate it actively through various channels. I use my blog to help to pass this message.
My reply:
The success of NTUC Income is largely driven by its core values:
- quality products
- low cost
- fair treatment of policyholders
As a cooperative, we do not seek to make excessive profits for shareholders. We distribute most of our surplus to our policyholders.
Over the years, I work hard to get the my colleagues to feel passionate about our cooperative values, and look after the best interest of our customers. This strategy will ensure the long term success of NTUC Income.
As the CEO, my task is to articulate the cooperative values and to communicate it actively through various channels. I use my blog to help to pass this message.
Do you understand this structured product?
Taken from www.askdrmoney.com
Name of Product: "Income X Fund"
Distributor: 4 banks, 1 insurer
Type of Product: Currency arbitrage fund
Bold Claim: "9 % payout in the first year of inception of the fund."
The Facts:
A footnote explains that the payout may be made from the capital of the fund. It means the fund would be giving back part of your own investment and calling it a "payout".
There is no guarantee that any distribution will be made or that the frequency or amount of distributions as set out in the prospectus relating to the Fund will be met.
The sales charge is 5 per cent and the yearly management fee is 1.5 per cent.
For details of how this product operates, read Dr Money's blog. Personally, I find it very complicated.
Lesson: Do not invest in any product that you do not understand.
Name of Product: "Income X Fund"
Distributor: 4 banks, 1 insurer
Type of Product: Currency arbitrage fund
Bold Claim: "9 % payout in the first year of inception of the fund."
The Facts:
A footnote explains that the payout may be made from the capital of the fund. It means the fund would be giving back part of your own investment and calling it a "payout".
There is no guarantee that any distribution will be made or that the frequency or amount of distributions as set out in the prospectus relating to the Fund will be met.
The sales charge is 5 per cent and the yearly management fee is 1.5 per cent.
For details of how this product operates, read Dr Money's blog. Personally, I find it very complicated.
Lesson: Do not invest in any product that you do not understand.
Tuesday, June 06, 2006
Lower age requirement for reverse mortgage on HDB flat
Previously, HDB require the owner to be at least 70 years old, before they can apply for a reverse mortgage.
HDB had now just relaxed the minimum age limit of applicants to 62. The loan period is up to age 90 or death or sale of property, whichever is earlier.
HDB had now just relaxed the minimum age limit of applicants to 62. The loan period is up to age 90 or death or sale of property, whichever is earlier.
Insurance Academy
http://www.income.coop/academy/
The Insurance Academy is a collaboration between Nanyang Polytechnic (NYP) and NTUC Income.
The Academy train news and current professionals in the financial services and insurance industryl in Singapore and in the region.
There are currently two full time courses:
1 week: Certificate in Entrepreneurial Management
3 months: Specialist Diploma in Insurance Studies
The Insurance Academy is a collaboration between Nanyang Polytechnic (NYP) and NTUC Income.
The Academy train news and current professionals in the financial services and insurance industryl in Singapore and in the region.
There are currently two full time courses:
1 week: Certificate in Entrepreneurial Management
3 months: Specialist Diploma in Insurance Studies
Amazing: special benefits for policyholders
Amazing.
NTUC Income policyholders are eligible for many special benefits.
Some are very useful.
Find out more:
http://www.income.coop/benefits/
NTUC Income policyholders are eligible for many special benefits.
Some are very useful.
Find out more:
http://www.income.coop/benefits/
Should I sell and come back later?
QUESTION FROM POLICYHOLDER
I would like to know your opinion that if a ILP (using CPF OA) are making money say after 3 years, would it be advisable to sell it off and put the money back to CPF and wait for another opportunity or just wait for it to keep rolling?
REPLY
It is usually quite difficult to time the market.
If you are really sure that the market is "too high" and you wish to take profit, then it is okay.
But, if you are wrong in selling out, you may have to re-invest at a higher price, and you miss out on a significant portion of the gain.
Normally, I prefer to invest for 10 or 20 years and avoid taking decisions at shorter intervals.
I would like to know your opinion that if a ILP (using CPF OA) are making money say after 3 years, would it be advisable to sell it off and put the money back to CPF and wait for another opportunity or just wait for it to keep rolling?
REPLY
It is usually quite difficult to time the market.
If you are really sure that the market is "too high" and you wish to take profit, then it is okay.
But, if you are wrong in selling out, you may have to re-invest at a higher price, and you miss out on a significant portion of the gain.
Normally, I prefer to invest for 10 or 20 years and avoid taking decisions at shorter intervals.
Interested to invest in NTUC Income shares
FROM SHAREHOLDER
I have always viewed NTUC income shares as a good defense stock as it provide a very decent return (6% based on recent dividend) with little/no risk of losing the principal.
Is it still open for investment? Some months back, I have checked with the NTUC Income staff in the Tampines Centre and was told it was not available.
I am currently holding 1,000 shares and would like to purchase more shares if possible to form part of my defensive portfolio.
REPLY BY TAN KIN LIAN
We are not taking application for Income shares. As we have sufficient capital, we are not likely to invite applications for the next few years.
I suggest that you attend our educational seminar and learn about the various investment choices. The seminar on "re-investing your maturity proceeds" offer choices for single premium investments. It covers a choice of various investment products.
I have always viewed NTUC income shares as a good defense stock as it provide a very decent return (6% based on recent dividend) with little/no risk of losing the principal.
Is it still open for investment? Some months back, I have checked with the NTUC Income staff in the Tampines Centre and was told it was not available.
I am currently holding 1,000 shares and would like to purchase more shares if possible to form part of my defensive portfolio.
REPLY BY TAN KIN LIAN
We are not taking application for Income shares. As we have sufficient capital, we are not likely to invite applications for the next few years.
I suggest that you attend our educational seminar and learn about the various investment choices. The seminar on "re-investing your maturity proceeds" offer choices for single premium investments. It covers a choice of various investment products.
Monday, June 05, 2006
250 people visit my blog each day
An average of 250 people visit my blog each day. This is a 65% increase over the average of 150 people two months ago. This is measured through the site meter that is pasted to my blog.
Thank you for visiting my blog. Please help to spread the word to your friends. Ask them to come and read my views and tips.
Thank you for visiting my blog. Please help to spread the word to your friends. Ask them to come and read my views and tips.
More visitors to Business Centers
Each day, 80 people visit our two business centers, an increase of 80% compared to 6 weeks ago. After the official opening of the centers, more people are aware about it.
They come to the business centers for financial planning and to buy our insurance products. We offer great value on these products, which are much better than similar products from our competitors.
For example, a person saving $300 a month over 30 years can get $60,000 more from our product compared to a similar product from our competitors - for the same risk profile.
You get more from NTUC Income becuase we give an additonal 12 months of investments and charge 1% less in annual fee. $60,000 is A LOT OF MONEY!
We are able to handle double the number of visitors, so we welcome more people to vist our business center. Call 6877 3366 to make an appointment.
They come to the business centers for financial planning and to buy our insurance products. We offer great value on these products, which are much better than similar products from our competitors.
For example, a person saving $300 a month over 30 years can get $60,000 more from our product compared to a similar product from our competitors - for the same risk profile.
You get more from NTUC Income becuase we give an additonal 12 months of investments and charge 1% less in annual fee. $60,000 is A LOT OF MONEY!
We are able to handle double the number of visitors, so we welcome more people to vist our business center. Call 6877 3366 to make an appointment.
Savings rate among the young is low in Canada
Our consultant in Canada was very impressed with the educational talk given by NTUC Income on "financial tips for the young".
He also like the financial awareness talks conducted under the Money Sense programme funded by the Monetary Authority in Singapore.
There is no similar educational program in Canada. The personal savings rate, especially among the young, is now in negative territory, which is the lowest level since the 1920s.
He also like the financial awareness talks conducted under the Money Sense programme funded by the Monetary Authority in Singapore.
There is no similar educational program in Canada. The personal savings rate, especially among the young, is now in negative territory, which is the lowest level since the 1920s.
Sunday, June 04, 2006
Our investments are doing well
I received a monthly e-mail statement on my investments with the funds operated by NTUC Income.
I invested $208,000 of my money from CPF, SRS and cash. The average duration is 3 years. They are invested in several combined and specialised funds.
The total value of my investments is $245,000 (even after the 5% correction in May). I get a return of 18% for the 3 years.
My wife invested $201,000 of her cash savings. The average duration is 2 years. Most of her investments are in the combined fund.
Her investments are now worth $230,000, giving a return of 14% for 2 years. This is a better return than mine.
I invested $208,000 of my money from CPF, SRS and cash. The average duration is 3 years. They are invested in several combined and specialised funds.
The total value of my investments is $245,000 (even after the 5% correction in May). I get a return of 18% for the 3 years.
My wife invested $201,000 of her cash savings. The average duration is 2 years. Most of her investments are in the combined fund.
Her investments are now worth $230,000, giving a return of 14% for 2 years. This is a better return than mine.
Learn about insurance on your own
www.KnowYourInsurance.com.sg
This educational website tells you about the key facts on
common insurance products, such as motor, health, life and
home insurance. It also tells you about estate duty, writing a
will and other useful topics.
Each topic can be completed within 20 minutes. You can take
a test to check your understanding.
It is educational and fun. And can save you a lot of money by
buying the right product.
This educational website tells you about the key facts on
common insurance products, such as motor, health, life and
home insurance. It also tells you about estate duty, writing a
will and other useful topics.
Each topic can be completed within 20 minutes. You can take
a test to check your understanding.
It is educational and fun. And can save you a lot of money by
buying the right product.
Saturday, June 03, 2006
Advertisement: Ideal plan can earn $20,000 more for you
Most investment linked plans takes away 17 to 19 months of your savings, to pay commission to the agent and other expenses (see www.askdrmoney.com).
The Ideal plan from NTUC Income takes away only 7 months of savings. This means that we can invest an additional 12 months of your savings to earn more for you.
If you save $300 a month, the additional investment of 12 months, can amount to $20,000 at the end of 30 years (assuming a return of 6% per annum).
That is a lot of money. You can get up to $20,000 MORE, by investing through the Ideal plan from NTUC Income.
Call 6877 1111.
The Ideal plan from NTUC Income takes away only 7 months of savings. This means that we can invest an additional 12 months of your savings to earn more for you.
If you save $300 a month, the additional investment of 12 months, can amount to $20,000 at the end of 30 years (assuming a return of 6% per annum).
That is a lot of money. You can get up to $20,000 MORE, by investing through the Ideal plan from NTUC Income.
Call 6877 1111.
Financial Planning Advice
It's FREE, but the value of the advice is priceless!
Spend 30 minutes.
Learn how to have the right financial plan.
Save and invest wisely.
You can earn $146,000 more (for a monthly saving of
$300 over 30 years)
And enjoy a cup of coffee, tea or milo. It's on us!
For appointment: call 6877 3366.
Business Center:
- NTUC Income Center, 75 Bras Basah Road
- Tampines Point, 2 Tampines Central 6
Spend 30 minutes.
Learn how to have the right financial plan.
Save and invest wisely.
You can earn $146,000 more (for a monthly saving of
$300 over 30 years)
And enjoy a cup of coffee, tea or milo. It's on us!
For appointment: call 6877 3366.
Business Center:
- NTUC Income Center, 75 Bras Basah Road
- Tampines Point, 2 Tampines Central 6
Tips for the Young: talk on Wed 7 June, 7 pm
I am giving a talk "Tips for the Young" on Wed 7 June 7-9 pm at NTUC Income center. I will give tips that help the young to make the right choice and get $146,000 more in return for their savings.
Call 6877 3366 to register for this talk. The talk is FREE but my tips are priceless!
Call 6877 3366 to register for this talk. The talk is FREE but my tips are priceless!
Be gracious and accept an apology
A policyholder sent two cheques to us. One is for a payment of home insurance. Another is for a payment to NTUC (another organisation) for some membership service.
We cleared the cheque for Income. But our staff must have sent the second cheque to NTUC. It must have been lost in transit.
The policyholder complained about the missing cheque. Our staff tried to find it, but could not locate it.
The policyholder brought the complaint to me.
Here is my reply:
Dear
I am sorry that the cheque was displaced. As this payment is for another organisation (ie NTUC), our staff could not bank it in. It must have been sent to NTUC.
It will be impossible for us to trace the cheque. I hope that you understand our dilemma. I suggest that you treat it as cancelled and send another cheque directly to NTUC.
LESSON: Our internal process for handling this type of situation will be strengthened.
We cleared the cheque for Income. But our staff must have sent the second cheque to NTUC. It must have been lost in transit.
The policyholder complained about the missing cheque. Our staff tried to find it, but could not locate it.
The policyholder brought the complaint to me.
Here is my reply:
Dear
I am sorry that the cheque was displaced. As this payment is for another organisation (ie NTUC), our staff could not bank it in. It must have been sent to NTUC.
It will be impossible for us to trace the cheque. I hope that you understand our dilemma. I suggest that you treat it as cancelled and send another cheque directly to NTUC.
LESSON: Our internal process for handling this type of situation will be strengthened.
Be a considerate driver; give way
While driving this morning, I wanted to move from the middle to the right lane. I turned on my right hand signal. I looked at the rear view mirror to see the cars in the right lane.
Instead of slowing down for me to move to the right lane, I saw the first car actualy speed up. The driver just wanted to get in front. This happened with the second and the third cars.
All three drivers behaved in the same way.
We have to learn to be considerate, and to give way.
Instead of slowing down for me to move to the right lane, I saw the first car actualy speed up. The driver just wanted to get in front. This happened with the second and the third cars.
All three drivers behaved in the same way.
We have to learn to be considerate, and to give way.
Invest $100,000 in Global Equity
After watching the market for the past month, I have now decided to invest $100,000 in Global Equity Fund. This will be transacted on the coming Monday.
Here are my reasons:
- I am investing for 20 years
- the Global Equity fund has corrected by 5% during the past month
- the fund still give a positive return for this year and beat the market benchmark
- the global economy is still robust, especially Japan and Europe
Here are my reasons:
- I am investing for 20 years
- the Global Equity fund has corrected by 5% during the past month
- the fund still give a positive return for this year and beat the market benchmark
- the global economy is still robust, especially Japan and Europe
Friday, June 02, 2006
Customer ask: Is it time to buy?
QUESTION
Dear Mr Tan:
I am very late in investing in NTUC's investment funds. I used to play local
equities directly and lost quite substantially.
Last year, I bought combined
fund (growth) at S$50,000 on Sep 05 and S$27,000 (Ideal Plan) on Nov 05. Although there is a major correction last two weeks, my investments are still positive.
I have set aside another S$50,000 to invest. Is this the right time? Has the
correction stabilized? If yes, when and how should I invest? Top up the current investment on combined fund or buy a new investment on global equity?
-------------------
REPLY
Read my blog www.tankinlian.blogspot.com. I am also asking the same question on my personal investment. Most probably, I will invest $100,000 next week, and another $100,000 in 1 or 2 month's time.
Dear Mr Tan:
I am very late in investing in NTUC's investment funds. I used to play local
equities directly and lost quite substantially.
Last year, I bought combined
fund (growth) at S$50,000 on Sep 05 and S$27,000 (Ideal Plan) on Nov 05. Although there is a major correction last two weeks, my investments are still positive.
I have set aside another S$50,000 to invest. Is this the right time? Has the
correction stabilized? If yes, when and how should I invest? Top up the current investment on combined fund or buy a new investment on global equity?
-------------------
REPLY
Read my blog www.tankinlian.blogspot.com. I am also asking the same question on my personal investment. Most probably, I will invest $100,000 next week, and another $100,000 in 1 or 2 month's time.
Thursday, June 01, 2006
Return on investment funds
In spite of the sharp correction in May, the global equity, Singapore equity and the combined (growth and balanced funds) operated by NTUC Income still give a positive return for the five months of this year.
The funds also performed better than benchmark.
The funds also performed better than benchmark.
Fund Jan-Apr May Jan-May
Global Equity 6.1% -4.2% 1.6%
Singapore Equity 12.0% -5.6% 5.7%
Global Bond -1.8% 0.1% -1.7%
Singapore Bond -0.4% 0.6% 0.2%
Combined (Growth) 4.7% -3.2% 1.4%
Combined (Balanced) 3.0% -2.3% 0.6%
Combined (Conservative) 1.2% -1.3% -0.2%
Benchmark
MSCI World 4.5% -3.6% 0.8%
STI 12.1% -7.9% 3.3%
Is it time to invest?
It is a good time to take up a regular premium investment-linked plan. By saving on the regular premium, you will enjoy the benefit of lower dollar cost averaging.
At the current low cost of the units, you will get more units for your investment. If the price drops further, you can get even more units.
The market will turn around. Your investment will benefit from the upturn.
I suggest that you choose the Global Equity fund or the Combined Growth fund.
--------------------------------------------
If you are making a large, lump sum investment, the position is still not clear. The market correction has been more severe than I had expected. The correction allows you to make your investment at 5% to 10% lower than it was one month ago.
I wish to make an additonal investment of $200,000. I will probably invest $100,000 next week, and another $100,000 a few weeks later.
My choice is the Global Equity Fund.
At the current low cost of the units, you will get more units for your investment. If the price drops further, you can get even more units.
The market will turn around. Your investment will benefit from the upturn.
I suggest that you choose the Global Equity fund or the Combined Growth fund.
--------------------------------------------
If you are making a large, lump sum investment, the position is still not clear. The market correction has been more severe than I had expected. The correction allows you to make your investment at 5% to 10% lower than it was one month ago.
I wish to make an additonal investment of $200,000. I will probably invest $100,000 next week, and another $100,000 a few weeks later.
My choice is the Global Equity Fund.
Wednesday, May 31, 2006
Was this stent necessary?
My insurance adviser received an e-mail from a patient.
She went to a private surgeon, who did a stent for her. He wanted to do a second stent, but she said she has could not afford it. She had just switched to a private insurer, which does not cover an early claim.
When she went to a restructured hospital, she was told that the stent was not necessary, as the extent of her blockage was not severe, and was quite common.
There are patients who have received different advice from the the medical profession. It is useful to have a second opinion before embarking on a major or expensive surgery.
She went to a private surgeon, who did a stent for her. He wanted to do a second stent, but she said she has could not afford it. She had just switched to a private insurer, which does not cover an early claim.
When she went to a restructured hospital, she was told that the stent was not necessary, as the extent of her blockage was not severe, and was quite common.
There are patients who have received different advice from the the medical profession. It is useful to have a second opinion before embarking on a major or expensive surgery.
Banks earn bumper profits
The local banks report bumper profits this year. Two banks earns more than $1 billion each, and much higher than in previous years. Even a foreign bank report that they earn more than $500 million in Singapore.
They make higher profits from the following sources:
- fees from sale of insurance and structured products
- high margin on their lending vs cost of funds
This is good news for their shareholders. But it is not good news for their bank customers.
The customers probably get a low rate of interest on their savings, and pay high rates of interest on their loans and credit card rollovers.
Make the banks compete - by looking for better choices to earn higher returns on your money. You can also make better investments to earn several tens of thousands of dollars more!
Come and attend our educational seminar to learn how. Call 6877 3366.
They make higher profits from the following sources:
- fees from sale of insurance and structured products
- high margin on their lending vs cost of funds
This is good news for their shareholders. But it is not good news for their bank customers.
The customers probably get a low rate of interest on their savings, and pay high rates of interest on their loans and credit card rollovers.
Make the banks compete - by looking for better choices to earn higher returns on your money. You can also make better investments to earn several tens of thousands of dollars more!
Come and attend our educational seminar to learn how. Call 6877 3366.
Monday, May 29, 2006
Ideal plan can give you $20,000 more
Most insurance companies take away 17 to 19 months of your savings as upfront charge under their investment linked plan (ILP). The ILP plan from NTUC Income (ie Ideal plan) takes away only 7 months. (See www.askdrmoney.com).
The difference is 12 months. We give 12 months of savings extra.
If the monthly saving is $300, we invest an additional $3,600, compared to other plans. Assuming an average return of 6% p.a, the additional investment will amount to $20,000 at the end of 30 years.
They can get $20,000 more, by investing with NTUC Income.
Why do the other ILP plans take away 19 months? Because, they pay higher commission to their agents and aim to make more profit for their shareholders.
Why does NTUC Income take away only 7 months? Because, we pay lower commission and reduce our expenses.
The difference is 12 months. We give 12 months of savings extra.
If the monthly saving is $300, we invest an additional $3,600, compared to other plans. Assuming an average return of 6% p.a, the additional investment will amount to $20,000 at the end of 30 years.
They can get $20,000 more, by investing with NTUC Income.
Why do the other ILP plans take away 19 months? Because, they pay higher commission to their agents and aim to make more profit for their shareholders.
Why does NTUC Income take away only 7 months? Because, we pay lower commission and reduce our expenses.
Saturday, May 27, 2006
Combined Fund or Global Equity Fund?
QUESTION
Mr Tan
Can I have your advise for a regular saving plan of $200 monthly over a 20 years investment period, into Combined Fund or Global Equity ? Since you did mention that these 2 funds are good. But which one is better if you would like to invest this much over a 20 years period ? Thanks!
ANSWER
I prefer Global Equity, but the Combined Fund (Growth) is also quote good (for those who wish to have a lower level of risk).
I suggest that you attend my educational talks. Call 6877 3366 for the date of the next talk.
Mr Tan
Can I have your advise for a regular saving plan of $200 monthly over a 20 years investment period, into Combined Fund or Global Equity ? Since you did mention that these 2 funds are good. But which one is better if you would like to invest this much over a 20 years period ? Thanks!
ANSWER
I prefer Global Equity, but the Combined Fund (Growth) is also quote good (for those who wish to have a lower level of risk).
I suggest that you attend my educational talks. Call 6877 3366 for the date of the next talk.
Friday, May 26, 2006
Funds managed by Fidelity
FUNDS MANAGED BY FIDELITY
Fund Size and Annual Charge
- Most Fidelity funds are $200m in size.
- Annual Charge is 1.5% for equity fund, 0.75% for bond fund.
- 15 fund offered under CPF investment (3 balanced funds, 1 bond fund, 11 equity funds)
Sales Charge and discount
- Sales charge for bank distributiors is 5%. Discount in the form of higher return on Fixed deposit (at least 3%)
- Sales charge for online distributor is about 1.5% to 2.5%.
- Sales charge for brokers is 5%.
-----------------------------
COMBINED FUND FROM NTUC INCOME
- fund size: $3,800 million
- annual fee: about 1%
- asset class: growth fund (70% equity, 30% bond
- sales charge: 3.5% (reduced for large investments above $20,000)
Fund Size and Annual Charge
- Most Fidelity funds are $200m in size.
- Annual Charge is 1.5% for equity fund, 0.75% for bond fund.
- 15 fund offered under CPF investment (3 balanced funds, 1 bond fund, 11 equity funds)
Sales Charge and discount
- Sales charge for bank distributiors is 5%. Discount in the form of higher return on Fixed deposit (at least 3%)
- Sales charge for online distributor is about 1.5% to 2.5%.
- Sales charge for brokers is 5%.
-----------------------------
COMBINED FUND FROM NTUC INCOME
- fund size: $3,800 million
- annual fee: about 1%
- asset class: growth fund (70% equity, 30% bond
- sales charge: 3.5% (reduced for large investments above $20,000)
A better way to pass your assets to your family
FROM A CUSTOMER
I wish to get your expert view.
Currently, many banks are encouraging clients to buy Insurance Trusts as part of estate planning. Typically, it is a significant single upfront payment with both guaranteed and projected returns and insurance payable upon death to named Trust beneficiaries.
Advantages are supposed to be faster probate process, additional estate duty exemptions and protection from creditors
------------------------
MY REPLY
Here a few points.
1. Be careful of the product. You must find out what is the return that you get. Most products offer a fairly low return, due to the high commission paid to the agent or the bank.
2. If estate duty is a consideration, you have two options. One is to write it as a trust policy under section 73, which allows the policy to be treated as a separate estate. This can be done independently of the product. It enjoys special estate duty.
But, under a trust policy, the rights are transferred from the policyholder to the beneficiaries - so the policyholder cannot change the mind and "take back" the money.
3. Another option is to place it under a revocable nomination. This is available from NTUC Income and later from the other insurance company as well.
4. I suggest that you go to read about it in www.KnowYourInsurance.com.sg. Or give a telephone call to X who is our expert on this matter.
5. What you want to do can be done with NTUC Income, and you get a much better return!
I wish to get your expert view.
Currently, many banks are encouraging clients to buy Insurance Trusts as part of estate planning. Typically, it is a significant single upfront payment with both guaranteed and projected returns and insurance payable upon death to named Trust beneficiaries.
Advantages are supposed to be faster probate process, additional estate duty exemptions and protection from creditors
------------------------
MY REPLY
Here a few points.
1. Be careful of the product. You must find out what is the return that you get. Most products offer a fairly low return, due to the high commission paid to the agent or the bank.
2. If estate duty is a consideration, you have two options. One is to write it as a trust policy under section 73, which allows the policy to be treated as a separate estate. This can be done independently of the product. It enjoys special estate duty.
But, under a trust policy, the rights are transferred from the policyholder to the beneficiaries - so the policyholder cannot change the mind and "take back" the money.
3. Another option is to place it under a revocable nomination. This is available from NTUC Income and later from the other insurance company as well.
4. I suggest that you go to read about it in www.KnowYourInsurance.com.sg. Or give a telephone call to X who is our expert on this matter.
5. What you want to do can be done with NTUC Income, and you get a much better return!
Wednesday, May 24, 2006
Car-sharing is a better option for many people
In the past months, the newspapers had reported on the sharp drop in new car prices.
Many people, particularly the younger ones, rush to the car showrooms and sign on the dotted line to buy their dream car.
This dream may not last when the true cost of car ownership strikes home.
For instance, if you buy an off-peak Nissan with a 95% car loan repayable over 10 years, you have to pay a monthly instalment of around $350. Add road tax, insurance, maintenance, petrol and parking charges, the total cost jump to $600 to $700 a month.
This is not a small sum for a young person just starting out on his career and burdened with a 10-year financial commitment.
I suggest a better option. If your job does not require you to use a car, you can consider car-sharing.
NTUC Income operates a car-sharing scheme with 200 cars serving 5000 members. A member spends between $50 and $200 per month depending on their car usage. For some months, they spend nothing if they are overseas or have other lifestyle priorities.
A car-sharing member have nearly the same benefits as private car owners.
www.carcoop.com.sg
Many people, particularly the younger ones, rush to the car showrooms and sign on the dotted line to buy their dream car.
This dream may not last when the true cost of car ownership strikes home.
For instance, if you buy an off-peak Nissan with a 95% car loan repayable over 10 years, you have to pay a monthly instalment of around $350. Add road tax, insurance, maintenance, petrol and parking charges, the total cost jump to $600 to $700 a month.
This is not a small sum for a young person just starting out on his career and burdened with a 10-year financial commitment.
I suggest a better option. If your job does not require you to use a car, you can consider car-sharing.
NTUC Income operates a car-sharing scheme with 200 cars serving 5000 members. A member spends between $50 and $200 per month depending on their car usage. For some months, they spend nothing if they are overseas or have other lifestyle priorities.
A car-sharing member have nearly the same benefits as private car owners.
www.carcoop.com.sg
50 million hits a month at our websites!
The two websites managed by NTUC Income, ie income.coop and Big Trumpet, receive a total of 51 million hits in March 2006.
This represents 1 million visitors a month (assuming that each visitor contribute to 50 hits).
This must be one of the most active websites in Singapore.
We estimate that 30% of the visitors are from our own staff and insruance advisers. 70% must be from the public, ie our customers.
This represents 1 million visitors a month (assuming that each visitor contribute to 50 hits).
This must be one of the most active websites in Singapore.
We estimate that 30% of the visitors are from our own staff and insruance advisers. 70% must be from the public, ie our customers.
Excess on motor insurance
The Excess is the amount payable by the policyholder as their contribution towards a claim.
Some insurers peg their standard Excess just below NTUC Income and publicise it in their materials.
They conveniently omit to mention that young and inexperience drivers are subject to higher Excess.
They also impose an additional Excess for unnamed drivers.
Some insurers peg their standard Excess just below NTUC Income and publicise it in their materials.
They conveniently omit to mention that young and inexperience drivers are subject to higher Excess.
They also impose an additional Excess for unnamed drivers.
Product Features INCOME Co-A Co-AX Co-R Co-C Co-H
Basic excess $500 $450 $200-$600 $450 $500 $500
Young driver $2000 $3000 $2500 $3950 $2500 $1500
Unnamed driver NA $450-$550 $500 $750 $500 $500
Is it time to invest in equities?
Two weeks ago, I mentioned that the global equity markets are "correcting". I indicate that I may want to make a further investment within two weeks, after the correction is over.
The correction has been slightly more severe than I expected. So, the various markets have come down by 5% to 10%.
I shall be carrying out a further review. I think that it may be time for me to make my further investment later this week, or earlier next week.
I shall post my decision soon.
The correction has been slightly more severe than I expected. So, the various markets have come down by 5% to 10%.
I shall be carrying out a further review. I think that it may be time for me to make my further investment later this week, or earlier next week.
I shall post my decision soon.
Why do customers come to our business center?
Here are the views of 10 customers who bought policies through the Business Center:
1. 40 % feel that agents only come around when they want to sell something and they are agressive in the approach. They feel at ease when they walk into the Business Center to buy their policies.
2. 40 % of them feel that agents do not give after sales service so they prefer to deal with directly with the company. Comment for one PH.....Agents come and go but the company is always there.
3. 20% feel that we give better value in terms of our vouchers (for direct customers).
4. All of them fell it is hassle free and straight forward to deal with the Business Center.
1. 40 % feel that agents only come around when they want to sell something and they are agressive in the approach. They feel at ease when they walk into the Business Center to buy their policies.
2. 40 % of them feel that agents do not give after sales service so they prefer to deal with directly with the company. Comment for one PH.....Agents come and go but the company is always there.
3. 20% feel that we give better value in terms of our vouchers (for direct customers).
4. All of them fell it is hassle free and straight forward to deal with the Business Center.
Saturday, May 20, 2006
Adjustible Annuity
NTUC Income now offers the participating annuity. It offers a guaranteed payout which is increased each year by a variable bonus. The bonus is usually about 2.5% per annum, but is not guaranteed. In most years, it should vary from 1% to 4%.
A male at 62 investing in this annuity will get a return of 6.3% plus bonus. If he invest $100,000, the payout is $524 per month. This will increase with the yearly bonus.
Assuming the bonus is 2.5% per year, the annuity will increase to $671 after 10 years and $859 after 20 years.
Some policyholders have asked us to provide a higher payout in the earlier years. One option is for us to offer an adjustible annuity. It will pay $660 a month, of which $524 is guaranteed and $136 is adjustible.
If the average return on our investments is 5% per annum, the annuity will remain the same. If the average return is higher than 5%, we will adjust the annuity upwards. If it is lower than 5%, it will be adjusted downwards, but will not be less than the guaranteed floor of $524.
We will make gradual adjustment, by looking at the average return over a few years.
We have not yet decided to offer the adjustible annuity at this time. If there is sufficient interest, we may offer it in the future.
A male at 62 investing in this annuity will get a return of 6.3% plus bonus. If he invest $100,000, the payout is $524 per month. This will increase with the yearly bonus.
Assuming the bonus is 2.5% per year, the annuity will increase to $671 after 10 years and $859 after 20 years.
Some policyholders have asked us to provide a higher payout in the earlier years. One option is for us to offer an adjustible annuity. It will pay $660 a month, of which $524 is guaranteed and $136 is adjustible.
If the average return on our investments is 5% per annum, the annuity will remain the same. If the average return is higher than 5%, we will adjust the annuity upwards. If it is lower than 5%, it will be adjusted downwards, but will not be less than the guaranteed floor of $524.
We will make gradual adjustment, by looking at the average return over a few years.
We have not yet decided to offer the adjustible annuity at this time. If there is sufficient interest, we may offer it in the future.
Poor performance of two bond funds
QUESTION FROM POLICYHOLDER
I have invested in your 2 bond funds. I want an explanation for the under-performance of these funds. I have attended your talk. You said if fund manager consistently do not perform you are going to remove them. Why have you NOT kept your word?
Now it has been 3 years of underperformance - you are still going to keep them? Or are you going to do the right thing for policyholders who have entrusted our money to you? Customers expect swift and robust action to correct this problem!
REPLY
NTUC Income operates two bond funds - the Global Bond fund and the Singapore Bond fund.
The annualised return for the past 3 years is:
Global Bond - 3.4% p.a. (benchmark: 3.3% p.a.)
Singapore Bond - 1.2% p.a. (benchmark: 1.8% p.a.)
The return on Singapore bonds has been rather low, due mainly to the low interest rate in Singapore.
The return on the bond funds are affected by the recent increase in interest rate. This is a temporary situation. If the investment is kept for a longer period of 5 to 10 years, the average return will be about 3.5% p.a.
Investment in bonds have low risk, but the return is also low.
If the actual performance is within 1% of the benchmark (in the case of bonds), we consider the performance to be acceptable. We have to accept a small degree of fluctuation.
My advice: If you are investing for 10 years or longer, you should choose the global equity or the combined fund. Risk is to your advantage.
I have invested in your 2 bond funds. I want an explanation for the under-performance of these funds. I have attended your talk. You said if fund manager consistently do not perform you are going to remove them. Why have you NOT kept your word?
Now it has been 3 years of underperformance - you are still going to keep them? Or are you going to do the right thing for policyholders who have entrusted our money to you? Customers expect swift and robust action to correct this problem!
REPLY
NTUC Income operates two bond funds - the Global Bond fund and the Singapore Bond fund.
The annualised return for the past 3 years is:
Global Bond - 3.4% p.a. (benchmark: 3.3% p.a.)
Singapore Bond - 1.2% p.a. (benchmark: 1.8% p.a.)
The return on Singapore bonds has been rather low, due mainly to the low interest rate in Singapore.
The return on the bond funds are affected by the recent increase in interest rate. This is a temporary situation. If the investment is kept for a longer period of 5 to 10 years, the average return will be about 3.5% p.a.
Investment in bonds have low risk, but the return is also low.
If the actual performance is within 1% of the benchmark (in the case of bonds), we consider the performance to be acceptable. We have to accept a small degree of fluctuation.
My advice: If you are investing for 10 years or longer, you should choose the global equity or the combined fund. Risk is to your advantage.
Friday, May 19, 2006
Bank customer has bad experience
FROM A BANK CUSTOMER
When I visited a bank A to put my money in a fixed deposit, I was treated to personalised service at a sit down counter. If I decide to withdraw, I have to line up at the regular counter.
The bank has a roving officer who checks periodically on everyone in the queue regarding their transaction. The hard sell is strong.
When she came to me in the withdrawl queue, she tried to interest me in structured products instead, citing that they gave better returns than fixed deposit. This is a trap for the uninformed.
------------------------------
During the the last six months, I went to my bank B on two occasions to renew a deposit and to enquire about a shield plan.
On both occasions, the bank officer has online access to my particulars. When I gave them my NRIC, they know what products I have with the bank.
The bank officer saw that I have a particular unit trust with the bank. The officer tried to get me to sell that unit trust (stating that it is not doing well) and get me to buy a different unit trust.
They recommended recommended different products on two occasions.
I was quite confused at that time. I bought the unit trust 5 yrs ago, and it was losing money all these years. Now that it is finally on the uptend, they were asking me to sell. Luckily I decided to not act rashly.
----------------------------------
I now realise that their real interest was probably in the commission they would make by selling a new product to me. Straight away, they make 5% and I lose another 5%. Nobody was interested in what was best for me.
It is like preying on my fear - that I should get out of a money losing decision made earlier. If I run now with at least my capital intact. But I realise that this is getting from the frying pan into the fire. I recover my capital and straight away give away 5% to someone else again !
It is a world of predators out there! I shall never trust anything sold by banks again. My interest is the last thing on their minds!
When I visited a bank A to put my money in a fixed deposit, I was treated to personalised service at a sit down counter. If I decide to withdraw, I have to line up at the regular counter.
The bank has a roving officer who checks periodically on everyone in the queue regarding their transaction. The hard sell is strong.
When she came to me in the withdrawl queue, she tried to interest me in structured products instead, citing that they gave better returns than fixed deposit. This is a trap for the uninformed.
------------------------------
During the the last six months, I went to my bank B on two occasions to renew a deposit and to enquire about a shield plan.
On both occasions, the bank officer has online access to my particulars. When I gave them my NRIC, they know what products I have with the bank.
The bank officer saw that I have a particular unit trust with the bank. The officer tried to get me to sell that unit trust (stating that it is not doing well) and get me to buy a different unit trust.
They recommended recommended different products on two occasions.
I was quite confused at that time. I bought the unit trust 5 yrs ago, and it was losing money all these years. Now that it is finally on the uptend, they were asking me to sell. Luckily I decided to not act rashly.
----------------------------------
I now realise that their real interest was probably in the commission they would make by selling a new product to me. Straight away, they make 5% and I lose another 5%. Nobody was interested in what was best for me.
It is like preying on my fear - that I should get out of a money losing decision made earlier. If I run now with at least my capital intact. But I realise that this is getting from the frying pan into the fire. I recover my capital and straight away give away 5% to someone else again !
It is a world of predators out there! I shall never trust anything sold by banks again. My interest is the last thing on their minds!
Feedback about the Business Center
I received two feedback about the business center.
----------------------------------------------------
Having just started working full-time after graduating, I have been shopping around looking at various financial plans and insurance policies. Most agents I meet are terrifyingly aggressive and pushy, with their emphasis seemingly being on “Sell! Sell! Sell!” while I sit there, bewildered and intimidated by lists of figures and percentages.
It is reassuring and encouraging to know where NTUC Income’s heart lies and the ethics you work by. I’m definitely looking forward to a consultation with your financial planners!”
JT
----------------------------------------------------------------------
The new business centre caters to consumers like me, someone who is not comfortable to speaking with an agent but still wants the consultation and advise necessary to
make informed decisions on financial products.
There are far too many financial products floating about in the market. Consumers are often confused and frightened off and as a result not take any steps to help themselves. With the business centre, consumers are encouraged to take the
initiative to seek advise without being solicited and without the pressure of having to make any purchases.
Your business centre is a fine example of the cooperative's ethos and philosophy of putting the consumers' needs, concerns, trust and care above all else."
NM
----------------------------------------------------
Having just started working full-time after graduating, I have been shopping around looking at various financial plans and insurance policies. Most agents I meet are terrifyingly aggressive and pushy, with their emphasis seemingly being on “Sell! Sell! Sell!” while I sit there, bewildered and intimidated by lists of figures and percentages.
It is reassuring and encouraging to know where NTUC Income’s heart lies and the ethics you work by. I’m definitely looking forward to a consultation with your financial planners!”
JT
----------------------------------------------------------------------
The new business centre caters to consumers like me, someone who is not comfortable to speaking with an agent but still wants the consultation and advise necessary to
make informed decisions on financial products.
There are far too many financial products floating about in the market. Consumers are often confused and frightened off and as a result not take any steps to help themselves. With the business centre, consumers are encouraged to take the
initiative to seek advise without being solicited and without the pressure of having to make any purchases.
Your business centre is a fine example of the cooperative's ethos and philosophy of putting the consumers' needs, concerns, trust and care above all else."
NM
Thursday, May 18, 2006
Why prior approval is useful
I wish to share an experience involving someone I know. It illustrates the importance of getting prior approval for expensive medical treatment.
Mr Koh went to see a specialist for a medical condition. The specialist carried out some complicated tests. He told Mr Koh that his condition is serious and needed to be treated immediately.
Mr Koh signed the consent letter and was operated. He was discharged a few days later. He received a bill for more than $30,000. Mr Koh was not insured.
Mr Koh consulted his personal doctor. The doctor told him, "Mr Koh, you are already 80 years old. This type of medical condition is not serious. The operation is not necessary for a person of your age. Why did you agree to be operated?"
Mr Koh paid the bill. He decided not to pursue the matter.
Lesson: If Mr Koh is insured and has to consult his insurance company, he will be able to get a second opinion. In fact, the specialist will not dare to recommend an unnecessary operation, as he might be questioned.
Mr Koh went to see a specialist for a medical condition. The specialist carried out some complicated tests. He told Mr Koh that his condition is serious and needed to be treated immediately.
Mr Koh signed the consent letter and was operated. He was discharged a few days later. He received a bill for more than $30,000. Mr Koh was not insured.
Mr Koh consulted his personal doctor. The doctor told him, "Mr Koh, you are already 80 years old. This type of medical condition is not serious. The operation is not necessary for a person of your age. Why did you agree to be operated?"
Mr Koh paid the bill. He decided not to pursue the matter.
Lesson: If Mr Koh is insured and has to consult his insurance company, he will be able to get a second opinion. In fact, the specialist will not dare to recommend an unnecessary operation, as he might be questioned.
20 insurance advisers left NTUC Income
The Straits Times reported that 20 insurance advisers left NTUC Income to join other insurance companies, due to unhappiness with our insurance business center.
This is true. But it does not give the complete picture.
Each year, an average of 40 insurance agents from other companies join NTUC Income. They find it easier to sell our products, which give better value to their customers. Although they earn a lower rate of commission, they are able to earn more through a higher volume of sales.
Some join as supervisors or salaried consultants on fixed salaries.
NTUC Income aims to provide a new channel for people to buy insurance. We want to educate consumers and allow them to buy insurance from our business centers.
We will continue to have insurance advisers, who sell insurance to customers through the traditional way, by visiting their home or workplace. They continue to offer good value products to our customers.
There will be two channels to serve the two different groups of customers.
This is true. But it does not give the complete picture.
Each year, an average of 40 insurance agents from other companies join NTUC Income. They find it easier to sell our products, which give better value to their customers. Although they earn a lower rate of commission, they are able to earn more through a higher volume of sales.
Some join as supervisors or salaried consultants on fixed salaries.
NTUC Income aims to provide a new channel for people to buy insurance. We want to educate consumers and allow them to buy insurance from our business centers.
We will continue to have insurance advisers, who sell insurance to customers through the traditional way, by visiting their home or workplace. They continue to offer good value products to our customers.
There will be two channels to serve the two different groups of customers.
Get good leaders in government
At each general election, there is the risk that some of our experienced ministers may not get elected into Parliament. People worry that this may disrupt the smooth running of our country.
Is there a different way to "find" capable people to run the country?
The American system provides an interesting alternative.
The citizens elect their representatives into Congress, which is the equaivalent of our Parliament. Each district elect their own representative. They do not have a "group consitutency" system.
The citizens also elect their President and Vice President to run the country. The President cannot run the country on his own. He nominates capable people to be secretaries of the various departments. These secretaries perform roles that are similar to our ministers.
For example, their secretary of state is like our foreign affairs minister. The secretary of the treasury is like our finance minister.
The nominees have to be approved by Congress, which are the elected representatives of the people.
I think that Singapore can adopt this aspect of the American system. We do not need all ministers to be members of parliament at the same time. If necessary, we can appoint a minister from outside of Parliament, if they get the approval of a select committee of the Parliament.
Is there a different way to "find" capable people to run the country?
The American system provides an interesting alternative.
The citizens elect their representatives into Congress, which is the equaivalent of our Parliament. Each district elect their own representative. They do not have a "group consitutency" system.
The citizens also elect their President and Vice President to run the country. The President cannot run the country on his own. He nominates capable people to be secretaries of the various departments. These secretaries perform roles that are similar to our ministers.
For example, their secretary of state is like our foreign affairs minister. The secretary of the treasury is like our finance minister.
The nominees have to be approved by Congress, which are the elected representatives of the people.
I think that Singapore can adopt this aspect of the American system. We do not need all ministers to be members of parliament at the same time. If necessary, we can appoint a minister from outside of Parliament, if they get the approval of a select committee of the Parliament.
Wednesday, May 17, 2006
Insurance Business Center
NTUC Income now provides a new channel to service our customers.
At our new business centres, our salaried insurance consultants are on hand to assist you.
You get suitable advice on insurance and financial planning, without feeling obliged to buy the product. You enjoy a lower premium and a better return on the insurance and investment products from NTUC Income.
You can also get a modest incentive by buying through our business center.
Our business centers are conveniently located at Bras Basah Road and Tampines Point.
Call 6877-3366 for an appointment.
At our new business centres, our salaried insurance consultants are on hand to assist you.
You get suitable advice on insurance and financial planning, without feeling obliged to buy the product. You enjoy a lower premium and a better return on the insurance and investment products from NTUC Income.
You can also get a modest incentive by buying through our business center.
Our business centers are conveniently located at Bras Basah Road and Tampines Point.
Call 6877-3366 for an appointment.
More people now read my blog
My site meter said that 350 people visit my blog last Friday and 400 visit yesterday. Wow.
Previously, I received an average of 150 visitors daily.
If you like my blog, tell your friends to visit it.
Previously, I received an average of 150 visitors daily.
If you like my blog, tell your friends to visit it.
Auto-renewal of fixed deposit at poor interest rate
Dear Mr Tan,
My $50,000 FD was auto-renewed 1 month ago at 1.7%, although the same bank is offering about 3% for other customers.
Probably, after this similar incident was highlighted in your blog, the bank finally tele-invited me to renew my FD at a higher rate of 3%. But I think it is still not fair that the 3% will be effective only from the date when I made a personal request at the bank to renew it.
I trust the banks to auto renew my deposit at the best rates and yet got a lousy deal in return for my trust.
Hazel
My $50,000 FD was auto-renewed 1 month ago at 1.7%, although the same bank is offering about 3% for other customers.
Probably, after this similar incident was highlighted in your blog, the bank finally tele-invited me to renew my FD at a higher rate of 3%. But I think it is still not fair that the 3% will be effective only from the date when I made a personal request at the bank to renew it.
I trust the banks to auto renew my deposit at the best rates and yet got a lousy deal in return for my trust.
Hazel
Tuesday, May 16, 2006
Positive feedback on Insurance Business Center
Dear Mr Tan,
Having salaried insurance consultants who are not commission based at NTUC Income's Insurance Business Centre is a fantastic concept. It shows that NTUC Income understands the needs of their customers.
My expereince dealing directly with either financial consultants from banks or insurance agents has left me with a somewhat negative impression as many push products and services which may not be entirely suited for me. At the back of my mind I always question the sincereity of the agents as hitting sales targets and earning a commission will still be their priority.
I look forward to going to NTUC Income's Insurance Business Centre for a financial evaluation soon!
RT
Having salaried insurance consultants who are not commission based at NTUC Income's Insurance Business Centre is a fantastic concept. It shows that NTUC Income understands the needs of their customers.
My expereince dealing directly with either financial consultants from banks or insurance agents has left me with a somewhat negative impression as many push products and services which may not be entirely suited for me. At the back of my mind I always question the sincereity of the agents as hitting sales targets and earning a commission will still be their priority.
I look forward to going to NTUC Income's Insurance Business Centre for a financial evaluation soon!
RT
Sunday, May 14, 2006
Bank customer is unhappy with renewal of fixed deposit
FROM A BANK CUSTOMER
I wish to bring up a disgusting issue regarding the behaviour of my bank.
My fixed deposit of $50,000 with bank X matured recently. The bank auto renewed it at 1.88%.
When I found out, I was so angry that I decided to withdraw the money. This bank has been offering 3% for a new deposit. And yet, the quietly renewed my deposit at a lower rate.
I am angry on behalf of all the people out there, especially those the retirees who are not so well educated. They trust the banks to auto renew their deposit at the best rates. They get a lousy deal in return for their trust.
If they threaten to take out their money and go to another bank, they will get a higher interest rate.
Our banks seems to be playing games, trying their best to OUTWIT and take advantage of the poor, uninformed consumer with their fancy tricks.
I'd say this is blatant cheating by institutions that are supposed to be high on trust and credibility.
I wish to bring up a disgusting issue regarding the behaviour of my bank.
My fixed deposit of $50,000 with bank X matured recently. The bank auto renewed it at 1.88%.
When I found out, I was so angry that I decided to withdraw the money. This bank has been offering 3% for a new deposit. And yet, the quietly renewed my deposit at a lower rate.
I am angry on behalf of all the people out there, especially those the retirees who are not so well educated. They trust the banks to auto renew their deposit at the best rates. They get a lousy deal in return for their trust.
If they threaten to take out their money and go to another bank, they will get a higher interest rate.
Our banks seems to be playing games, trying their best to OUTWIT and take advantage of the poor, uninformed consumer with their fancy tricks.
I'd say this is blatant cheating by institutions that are supposed to be high on trust and credibility.
Make the right choice. Earn $146,000 more!
Many people are approached by their friend, who is an insurance agent, to buy a life insurance policy. They obliged. They have to pay a big premium for many years.
If they buy the wrong product, they will get a poor return. The difference can be a lot of money.
If you invest $300 a month over 30 years, the difference (between earning 2% and 6% per annum) can be as much as $146,000. Yes, you can earn $146,0000 more when you buy the right product!
Even if you buy the right product to earn 6% per annum, the difference (between buying from company A and company B) can be as much as $60,000. It depends on the charges that are taken from your investment.
Wow. That is a lot of money.
Take my advice. Attend our educational seminar. Spend 2 hours only and learn how to make the right choice. It can be worth $146,000 more to you!
You can also get advice from our salaried consultant at our Insurance Business Center.
Call 6877 3366.
If they buy the wrong product, they will get a poor return. The difference can be a lot of money.
If you invest $300 a month over 30 years, the difference (between earning 2% and 6% per annum) can be as much as $146,000. Yes, you can earn $146,0000 more when you buy the right product!
Even if you buy the right product to earn 6% per annum, the difference (between buying from company A and company B) can be as much as $60,000. It depends on the charges that are taken from your investment.
Wow. That is a lot of money.
Take my advice. Attend our educational seminar. Spend 2 hours only and learn how to make the right choice. It can be worth $146,000 more to you!
You can also get advice from our salaried consultant at our Insurance Business Center.
Call 6877 3366.
Better to invest in ILP or unit trust?
QUESTION FROM THE PUBLIC
1. According to Dr Money, he has grouped unit trust seperately from insurance (ie ILP). Please explain the difference.
Reply: An ILP is offered by an insurnce company. It combines insurance with investment. An insurance adviser sells the product.
A unit trust is operated by a fund manager and distributed by a bank or a financial adviser. Apart from the charge by the unit trust operator, the financial adviser usually add another layer of charge.
2. Does that mean that unit trust usually charges a higher sales fee as compared to an ILP. What about the returns? Which one tends to give higher returns?
Reply: Different unit trusts and ILPs have different charges. It is very difficult to generalise. Many of them (except for NTUC Income) aim to make much profit, so they give less to the investors.
3. If I were to invest in an ILP, say the ideal plan, is the insurance component compulsory? Can I opt for 100% into investment alone?
Reply: If you buy our ideal plan, it is not compulsory to pay for insurance. You can opt for 100% investment. You can buy insurance separately, if you wish. We offer low cost term insurance.
TO FIND OUT MORE.
I suggest that you attend my education talk. You can register for the "financial tips for the young" http://www.income.coop/seminar/
You can also see a salaried consultant by visiting our business center.
http://www.income.coop/businesscentre/
1. According to Dr Money, he has grouped unit trust seperately from insurance (ie ILP). Please explain the difference.
Reply: An ILP is offered by an insurnce company. It combines insurance with investment. An insurance adviser sells the product.
A unit trust is operated by a fund manager and distributed by a bank or a financial adviser. Apart from the charge by the unit trust operator, the financial adviser usually add another layer of charge.
2. Does that mean that unit trust usually charges a higher sales fee as compared to an ILP. What about the returns? Which one tends to give higher returns?
Reply: Different unit trusts and ILPs have different charges. It is very difficult to generalise. Many of them (except for NTUC Income) aim to make much profit, so they give less to the investors.
3. If I were to invest in an ILP, say the ideal plan, is the insurance component compulsory? Can I opt for 100% into investment alone?
Reply: If you buy our ideal plan, it is not compulsory to pay for insurance. You can opt for 100% investment. You can buy insurance separately, if you wish. We offer low cost term insurance.
TO FIND OUT MORE.
I suggest that you attend my education talk. You can register for the "financial tips for the young" http://www.income.coop/seminar/
You can also see a salaried consultant by visiting our business center.
http://www.income.coop/businesscentre/
Saturday, May 13, 2006
How to save for a child?
QUESTION:
I really enjoyed reading your blog. You never failed to give some of your advice and experience with your readers.
May I know if there are any investment or insurance products suitable for children?
School-going children receive pocket money from their parents. Parents usually save the money into the banks which give very little interest. Are there any suitable financial products which allow this money to grow?
MY REPLY
I suggest that you save in an Ideal plan as well, if the saving is at least $50 a month. The saving can be accumulated to meet the cost of tertiary education. I will ask my colleague to call you and explain how this works.
I really enjoyed reading your blog. You never failed to give some of your advice and experience with your readers.
May I know if there are any investment or insurance products suitable for children?
School-going children receive pocket money from their parents. Parents usually save the money into the banks which give very little interest. Are there any suitable financial products which allow this money to grow?
MY REPLY
I suggest that you save in an Ideal plan as well, if the saving is at least $50 a month. The saving can be accumulated to meet the cost of tertiary education. I will ask my colleague to call you and explain how this works.
Equity markets are "correcting"
The major equity markets (USA, Japan, Europe) have dropped by about 3% during the past week. It is described as a "correction".
This is healthy, and is to be expected. It is good to have a correction, after moving up strongly for the past 2 years.
I am getting ready to increase my investment. I will probably wait for 1 or 2 weeks before I decide. If the market falls by a further 3 to 5 percent, it will represent good value.
For my current investment, I will keep it fully invested, as a long term investment. I do not wish to get out, because I may miss the turn-around in the market.
This is healthy, and is to be expected. It is good to have a correction, after moving up strongly for the past 2 years.
I am getting ready to increase my investment. I will probably wait for 1 or 2 weeks before I decide. If the market falls by a further 3 to 5 percent, it will represent good value.
For my current investment, I will keep it fully invested, as a long term investment. I do not wish to get out, because I may miss the turn-around in the market.
Advice: Don't buy structured products
Summary of an article from Dr Money's website: www.askdrmoney.com
Structured investments, deposits and guaranteed funds are a popular investment, distributed mostly by banks.
Issuers came up with something like a customised gambling product. The product might take 20 well-known stocks, for example, and let people place bets on which three would appreciate the most over 5 years.
It is difficult to guess the outcome. The odds are structured in such a way to give you a big payout if you win. And it provides you a "guaranteed" minimum return. It looks like a good investment, with no risks and good upside potential.
But it has many negative features.
1. Distributors are mostly banks. Their standard fee is 3 per cent of the amount invested. This charge is deducted from the net asset value of your investment. If you sell your investment immediately after purchase, you would receive back 97 per cent of your investment. Ultimately, the sales commission reduces your yield.
2. Issuers are the architects who design the structured product. They invest your money, after the distributor sends it to them. It is NOT possible to know how much the issuer takes from returns. You can ask the issuer or the distributor but they won’t tell you. It could be, say a fixed 2 per cent per year when total returns are between 2 and 6 per cent.
3. The structured product is linked to return from the underlying investments. If the return is high, the issuers have found a way to give you only a part of the gain, and to keep the excess return for themselves. They cap your return.
You can never know if you are getting a fair return for your money. It depends on how the product is designed.
Structured investments, deposits and guaranteed funds are a popular investment, distributed mostly by banks.
Issuers came up with something like a customised gambling product. The product might take 20 well-known stocks, for example, and let people place bets on which three would appreciate the most over 5 years.
It is difficult to guess the outcome. The odds are structured in such a way to give you a big payout if you win. And it provides you a "guaranteed" minimum return. It looks like a good investment, with no risks and good upside potential.
But it has many negative features.
1. Distributors are mostly banks. Their standard fee is 3 per cent of the amount invested. This charge is deducted from the net asset value of your investment. If you sell your investment immediately after purchase, you would receive back 97 per cent of your investment. Ultimately, the sales commission reduces your yield.
2. Issuers are the architects who design the structured product. They invest your money, after the distributor sends it to them. It is NOT possible to know how much the issuer takes from returns. You can ask the issuer or the distributor but they won’t tell you. It could be, say a fixed 2 per cent per year when total returns are between 2 and 6 per cent.
3. The structured product is linked to return from the underlying investments. If the return is high, the issuers have found a way to give you only a part of the gain, and to keep the excess return for themselves. They cap your return.
You can never know if you are getting a fair return for your money. It depends on how the product is designed.
Friday, May 12, 2006
Insurance Business Center
FROM A CUSTOMER
Dear Mr Tan,
I applause the new initiative from NTUC Income to create the insurance business center.
While many insurance companies invest large portion of their revenue to re-invent their corporate branding, NTUC Income created this business model to benefit your policy-holders where affect them most ... pocket !
Moreover, this business model will guide insurance advisors to be more service orientated and not strictly committing to sales target. A potential customer can be assured that the recommendation by insurance advisors from Insurance Business Centres is genuinely suitable for them and, or their requirement(s).
I have no doubt that this business model will obviously take some time to materialize since this is a brand new concept that seem impossible previously. Clearly this is another resemblance of a budget terminal or budget airlines; but most importantly, does not reduce in it's coverage.
VF
Dear Mr Tan,
I applause the new initiative from NTUC Income to create the insurance business center.
While many insurance companies invest large portion of their revenue to re-invent their corporate branding, NTUC Income created this business model to benefit your policy-holders where affect them most ... pocket !
Moreover, this business model will guide insurance advisors to be more service orientated and not strictly committing to sales target. A potential customer can be assured that the recommendation by insurance advisors from Insurance Business Centres is genuinely suitable for them and, or their requirement(s).
I have no doubt that this business model will obviously take some time to materialize since this is a brand new concept that seem impossible previously. Clearly this is another resemblance of a budget terminal or budget airlines; but most importantly, does not reduce in it's coverage.
VF
Thursday, May 11, 2006
Be careful about product advertisements
Here is a product advertised by a bank: "Fixed payout of 5.5 %, 6 months after the inception date."
Here are the facts:
- Many customers think that this means 5.5% return for 6-month return, or 11 % per year. This is not correct.
- To make this payout, the fund dips into the its capital. The fund is giving back part of your own investment and calling it a "payout".
- The actual return is linked to products and events which are very difficult to forecast. In this case, "the fund is linked to 6 Asia-Pacific market indices" and their performance over a period of 4 years and 11 months. You do not know what you will get.
GET MORE INFORMATION ABOUT BANK PRODUCTS FROM:
http://www.askdrmoney.com
Here are the facts:
- Many customers think that this means 5.5% return for 6-month return, or 11 % per year. This is not correct.
- To make this payout, the fund dips into the its capital. The fund is giving back part of your own investment and calling it a "payout".
- The actual return is linked to products and events which are very difficult to forecast. In this case, "the fund is linked to 6 Asia-Pacific market indices" and their performance over a period of 4 years and 11 months. You do not know what you will get.
GET MORE INFORMATION ABOUT BANK PRODUCTS FROM:
http://www.askdrmoney.com
30,000 happy policyholders
30,700 policies will have their policies maturing in 2006. The total payout is $623 million. The average payout is $20,300 per policy.
If these policyholders had taken a similar policy from another insurer, they will receive 10% to 15% less than the payout from NTUC Income. Why? The other insurers pay more commission to their agents and give more profit to their shareholders (at the expense of the policyholders).
NTUC Income is able to give a better return to our policyholders because we keep our expenses low, and give more of the surplus to our policyholders (instead of shareholders).
Our recent comparision show that our payout is 10% to 15% more than similar policies taken through our competitors. The difference could be more, for the longer term policies.
It is better to insure with NTUC Income. You will benefit in the long term.
If these policyholders had taken a similar policy from another insurer, they will receive 10% to 15% less than the payout from NTUC Income. Why? The other insurers pay more commission to their agents and give more profit to their shareholders (at the expense of the policyholders).
NTUC Income is able to give a better return to our policyholders because we keep our expenses low, and give more of the surplus to our policyholders (instead of shareholders).
Our recent comparision show that our payout is 10% to 15% more than similar policies taken through our competitors. The difference could be more, for the longer term policies.
It is better to insure with NTUC Income. You will benefit in the long term.
Good return on money market fund
NTUC Income has a money market fund. It will be invested mainly in interbank deposits, which now yield 3.15% pa to 3.38% for maturity of up to 12 months. These deposits are readily available and liquid.
We deduct 0.25% from the money market fund to cover our expenses. This will give a net yield of about 3% for investors. It is very attractive.
As the money is invested with a bank, it is quite safe. Almost like placing a fixed deposit with a bank.
How do you invest in our money market fund? We are launching the Flexi-Cash policy, which is invested in this fund. Watch out for our advertisement in two weeks' time.
We deduct 0.25% from the money market fund to cover our expenses. This will give a net yield of about 3% for investors. It is very attractive.
As the money is invested with a bank, it is quite safe. Almost like placing a fixed deposit with a bank.
How do you invest in our money market fund? We are launching the Flexi-Cash policy, which is invested in this fund. Watch out for our advertisement in two weeks' time.
Poor return from a policy sold through a bank
A client bought a policy from another insurer sold through a bank. She pays a premium of $50 a month through GIRO. The return is guaranteed to be $10,360 on the maturity date at the end of 15 years.
Is this a good return?
No. The return is 1.85% per annum.
Many people are not well educated. The older folks are being talked into buying a policy that they do not know in details.
My advice. If you are approached to buy a policy through a bank, and you do not know much about it, please ask before you get committed.
Know what you buy.
Is this a good return?
No. The return is 1.85% per annum.
Many people are not well educated. The older folks are being talked into buying a policy that they do not know in details.
My advice. If you are approached to buy a policy through a bank, and you do not know much about it, please ask before you get committed.
Know what you buy.
Client invested another $300,000 in the Combined Fund
FROM AN INSURANCE ADVISER:
I just had the opportunity to come back with a $300,000 from a client who had invested on Growth Fund with us more than a year ago. He knows the potential of this fund. I updated him with a spreadsheet of his investments.
CEO Tan Kin Lian sent this message to my client:
"I have most of my personal savings in the Combined Fund (Growth). I think that it is good for the long term.
Another good fund is Global Equity. I believe, that over 20 years, this fund is likely to earn at least 6% to 8% per annum, and quite safe. It may go up and down, but the average should be within this range. The average for the past 10 and 20 years is closer to 8%."
When I met him last evening, he told me, market seems high now, but it's okay, it is for long term. How old is he? 56.
He said, put the $300,000 in Growth Fund. Wow....
I just had the opportunity to come back with a $300,000 from a client who had invested on Growth Fund with us more than a year ago. He knows the potential of this fund. I updated him with a spreadsheet of his investments.
CEO Tan Kin Lian sent this message to my client:
"I have most of my personal savings in the Combined Fund (Growth). I think that it is good for the long term.
Another good fund is Global Equity. I believe, that over 20 years, this fund is likely to earn at least 6% to 8% per annum, and quite safe. It may go up and down, but the average should be within this range. The average for the past 10 and 20 years is closer to 8%."
When I met him last evening, he told me, market seems high now, but it's okay, it is for long term. How old is he? 56.
He said, put the $300,000 in Growth Fund. Wow....
Wednesday, May 10, 2006
Policyholder got an attractive return
AN INSURANCE ADVISER SENT THIS MESSAGE TO ME
I am writing on behalf of my prospect whose NTUC policy is about to mature on 24th June 2006.
When she bought the policy 19 yrs ago, her son was 2 yrs old so based on him going to University at age 21, the NTUC adviser recommended her the 19 year endowment.
She has been quite happy with NTUC having paid quite good bonuses over the years, even during the SARS, Sept 911 & various other difficult periods.
However, recently she was very disappointed when she received your company's letter advising her of her maturity benefit.
Her disappointed was in the vast difference between her gross maturity benefit of $41,458 and the total projected maturity of $45,012. This represents a hefty 7.89% less than the projected $45,012.
Hence, she has expressed her extreme loss of confidence towards NTUC.
-------------
HERE IS MY REPLY.
The policyholder paid a monthly premium of $102.70 for 19 years. Total premium paid for 19 years is $23,416. The maturing benefit of $41,458 represents a yield of 5.8% per annum.
You can tell the policyholder that the return of 5.8% per annum is quite attractive.
Our payout is about 10% to 15% higher than the payout offered by other insurance companies under a similar plan.
I am writing on behalf of my prospect whose NTUC policy is about to mature on 24th June 2006.
When she bought the policy 19 yrs ago, her son was 2 yrs old so based on him going to University at age 21, the NTUC adviser recommended her the 19 year endowment.
She has been quite happy with NTUC having paid quite good bonuses over the years, even during the SARS, Sept 911 & various other difficult periods.
However, recently she was very disappointed when she received your company's letter advising her of her maturity benefit.
Her disappointed was in the vast difference between her gross maturity benefit of $41,458 and the total projected maturity of $45,012. This represents a hefty 7.89% less than the projected $45,012.
Hence, she has expressed her extreme loss of confidence towards NTUC.
-------------
HERE IS MY REPLY.
The policyholder paid a monthly premium of $102.70 for 19 years. Total premium paid for 19 years is $23,416. The maturing benefit of $41,458 represents a yield of 5.8% per annum.
You can tell the policyholder that the return of 5.8% per annum is quite attractive.
Our payout is about 10% to 15% higher than the payout offered by other insurance companies under a similar plan.
Comparison of premium rates - medical plans
Incomeshield, subject to category limits
Total premium for age 20 to 80
Plan Income Co-G Co-A Co-P
P 47334 NA NA NA
A 32790 36463 42652 42670
B 19648 23127 25650 26765
Total premium for age 40 to 80
Plan Income Co-G Co-A Co-P
P 44456 NA NA NA
A 30651 34209 40265 40320
B 18464 21747 25019 24249
Enhanced Incomeshield, ie "as charged"
Total premium for age 20 to 80
Plan Income Co-V
Preferred 56405 58283
Advantage 40559 44866
Basic 22945 30267
Total premium for age 40 to 80
Plan Income Co-V
Preferred 53141 54777
Advantage 38301 42410
Basic 21511 28508
Tuesday, May 09, 2006
I moved to Global Equity
I have $120,000 of my CPF savings invested in the Combined Fund (Growth) and Singapore Equity Fund. I have just decided to switch these investments into the Global Equity fund.
Here are my reasons.
1. The forecast PE ratio of USA and UK are expected to drop by about 15% to below 16 times. This suggest that earnings may increase by 15% during the next 12 months.
2. The forecast PE ratio of Singapore is likely to increase by 15% to above 16 times. This suggest that the earnings of Singapore companies may drop by 15%.
3. The Singapore market has done very well up to now. It is moving up further, after the general election. I decided that it is time to make a switch.
I continue to have other investments in the Combined Fund (Growth) and in other funds that are invested in Singapore equities.
Here are my reasons.
1. The forecast PE ratio of USA and UK are expected to drop by about 15% to below 16 times. This suggest that earnings may increase by 15% during the next 12 months.
2. The forecast PE ratio of Singapore is likely to increase by 15% to above 16 times. This suggest that the earnings of Singapore companies may drop by 15%.
3. The Singapore market has done very well up to now. It is moving up further, after the general election. I decided that it is time to make a switch.
I continue to have other investments in the Combined Fund (Growth) and in other funds that are invested in Singapore equities.
Do you believe a broker who is driven by commission?
Some brokers and agents prefer to sell the medical or motor insurance plans offered by our competitors.
Why?
They earn a higher commission from the competitor.
Although the premium rates offered by NTUC Income are lower, they discourage consumers to buy from us by making statements such as "the service is poor; it is difficult to make a claim".
Do you believe the broker or agent? If our service is poor, why are we able to get a large market share?
Do not believe someone who is driven by their personal benefit. Check out for yourself.
Why?
They earn a higher commission from the competitor.
Although the premium rates offered by NTUC Income are lower, they discourage consumers to buy from us by making statements such as "the service is poor; it is difficult to make a claim".
Do you believe the broker or agent? If our service is poor, why are we able to get a large market share?
Do not believe someone who is driven by their personal benefit. Check out for yourself.
Enhanced Incomeshield
NTUC Income now offers the Enhanced Incomeshield. It pays for medical expenses in hospital "as charged".
A policyholder asked me, "Why is NTUC Income covering 'as charged', when I indicated earlier that this may lead to escalation in medical expenses?"
Here are three reasons.
1. Some policyholders indicate that they are willing to pay a higher premium for the "as charged" plan. We wish to meet the wishes of these policyholders.
2. Our "as charged" plan requires prior approval, except for emergency. This is to allow our medical adviser to give a second opinion of the proposed treatment and to avoid unnecessary treatment. In most cases, approval will be given within one day.
3. We will continue to offer the basic Incomeshield, which is subject to limits for each category of treatment. Our basic plan will continue to be the most affordable in the market.
Initially, the enhanced Incomeshield cost about 15% higher than the similar basic plan, but this difference may widen in the future, based on the claim experience. We will try our best to keep the premium rates at an affordable level for the enhanced plan. It depends on our ability to prevent escalation in medical expenses.
If the gap widens, some policyholders may wish to opt back into the similar basic plan (which will continue to be avaialable) to enjoy the lower premium rates.
Our strategy is to offer a choice for consumers.
A policyholder asked me, "Why is NTUC Income covering 'as charged', when I indicated earlier that this may lead to escalation in medical expenses?"
Here are three reasons.
1. Some policyholders indicate that they are willing to pay a higher premium for the "as charged" plan. We wish to meet the wishes of these policyholders.
2. Our "as charged" plan requires prior approval, except for emergency. This is to allow our medical adviser to give a second opinion of the proposed treatment and to avoid unnecessary treatment. In most cases, approval will be given within one day.
3. We will continue to offer the basic Incomeshield, which is subject to limits for each category of treatment. Our basic plan will continue to be the most affordable in the market.
Initially, the enhanced Incomeshield cost about 15% higher than the similar basic plan, but this difference may widen in the future, based on the claim experience. We will try our best to keep the premium rates at an affordable level for the enhanced plan. It depends on our ability to prevent escalation in medical expenses.
If the gap widens, some policyholders may wish to opt back into the similar basic plan (which will continue to be avaialable) to enjoy the lower premium rates.
Our strategy is to offer a choice for consumers.
Monday, May 08, 2006
Poor return from 10 year endowment
A retiree asked me, "Mr Tan, I took a 10 year endowment from another insurance company (ie not NTUC Income). I paid $1,200 a year. The policy originally projected a return of $14,000 on maturity. It matured recently and I received just $60 more than the $12,000 that was paid. Just $60. Is this a fair return?"
I replied "No. It is a poor return".
She asked, "Why is it so poor?"
I replied, "The insurance company paid high commission to the agent. The investment return during the past 10 years was low. After deducting expenses and the profit for their shareholders, they are only able to just return your premium back to you."
If the retiree had taken a 10 year endowment from NTUC Income, our payout would be 10% to 15% higher. We pay a modest commision to our agent, and our shareholders get only a modest rate of dividend. Most of the returns are given to our policyholders.
Advice: Insure with NTUC Income. We keep our expenses low. We distribute most of the profits to our policyholders. Our shareholders get a very small share of the profits. We are a cooperative society.
I replied "No. It is a poor return".
She asked, "Why is it so poor?"
I replied, "The insurance company paid high commission to the agent. The investment return during the past 10 years was low. After deducting expenses and the profit for their shareholders, they are only able to just return your premium back to you."
If the retiree had taken a 10 year endowment from NTUC Income, our payout would be 10% to 15% higher. We pay a modest commision to our agent, and our shareholders get only a modest rate of dividend. Most of the returns are given to our policyholders.
Advice: Insure with NTUC Income. We keep our expenses low. We distribute most of the profits to our policyholders. Our shareholders get a very small share of the profits. We are a cooperative society.
Are the stockmarkets too high?
Based on current interest rate, it is possible to justify a PE ratio of 20 times.
Here are the PE ratio of the various markets:
Based on estimate PE (ie for next year), Japan and Singapore looks relatively expensive, while South Korea and Thailand looks cheap.
However, at estimated PE of 16 times, the Singapore market still looks acceptable. So, there is nothing to be concerned about.
It seems that the profit is forecasted to drop for Japan, Singapore, Hong Kong, South Korea and Thailand over the next 12 months.
P/E is calculated on trailing 12 months net earnings (after tax) per share
of component stocks. Est P/E is calculated based on IBES earnings estimates.
I
Here are the PE ratio of the various markets:
World Price-Earnings
P/E Est. P/E
Japan (Nikkei 225) 43.93 49.64
Singapore (STI) 14.51 16.35
US (S&P500) 17.97 15.59
Indonesia (JCI) 20.27 15.93
Malaysia (KLCI) 15.78 15.91
Taiwan (TWSE) 19.97 15.12
Italy (MIB30) 15.19 14.29
Hong Kong (HSI) 13.32 14.21
Germany (Dax) 14.94 13.95
UK (FTSE100) 15.43 13.37
South Korea (KOSPI) 12.45 13.34
France (CAC 40) 14.68 13.33
Thailand (SET) 10.58 11.59
P/E is calculated on trailing 12 months net earnings (after tax) per share of component stocks.
Est P/E is calculated based on IBES earnings estimates.
Based on estimate PE (ie for next year), Japan and Singapore looks relatively expensive, while South Korea and Thailand looks cheap.
However, at estimated PE of 16 times, the Singapore market still looks acceptable. So, there is nothing to be concerned about.
It seems that the profit is forecasted to drop for Japan, Singapore, Hong Kong, South Korea and Thailand over the next 12 months.
P/E is calculated on trailing 12 months net earnings (after tax) per share
of component stocks. Est P/E is calculated based on IBES earnings estimates.
I
Safe Deposit Box
Many people queue for a safe deposit box provided by their bank.
Here is another option. NTUC Income has partnered with CISCO to provide a safe deposit box to our policyholders on attractive terms. Their boxes are located at Paya Lebar.
A few policyholders have taken up the offer. We interviewed 30 customers why they like the CISCO service. Here are their views:
- Longer access hours 41%
- Able to get the box immediately 21%
- CISCO branding - 15%
- Stay near to CISCO 13%
- Promotion 5%
- No fixed deposit required 5%
If you or your friend is looking for a safe deposit box, send an e-mail to edgar@income.com.sg.
Here is another option. NTUC Income has partnered with CISCO to provide a safe deposit box to our policyholders on attractive terms. Their boxes are located at Paya Lebar.
A few policyholders have taken up the offer. We interviewed 30 customers why they like the CISCO service. Here are their views:
- Longer access hours 41%
- Able to get the box immediately 21%
- CISCO branding - 15%
- Stay near to CISCO 13%
- Promotion 5%
- No fixed deposit required 5%
If you or your friend is looking for a safe deposit box, send an e-mail to edgar@income.com.sg.
Sunday, May 07, 2006
Feedback: Financial Tips for the Young
E-MAIL FROM SOMEONE WHO ATTENDED MY TALK: FINANCIAL TIPS FOR THE YOUNG.
Many thank for your interesting talk on financial tip for the young . I enjoy your talk. Due to time constraint, I was not able to get some queries answered. I hope to get the answer through e-mail .
1) You mention that the combined fund charges 1% annual fee. May I know the expense ratio of combined fund?
Reply: I am not clear what is being used to compute the expense ratio. Anyway, you can look at the comparison in this webpage by Dr Money:
http://www.askdrmoney.com/Ins_ILP_SP.htm
It shows NTUC Income's expense ratio to be 1% and other funds to be 1.5% to 2.5% per annum.
2) Other than through an insurance plan, can I invest in the combined fund directly through other distributers, such as Fundsupermart, DollarDex, etc
Reply: You can only invest through our insurance plan (Flexi-Link). Our fee is quite low. You only pay a 3.5% upfront spread. If you invest a large sum during our promotion, you give you bonus unit of up to 2%. So, this reduces the upfront fee to only 1.5%. You get some life insurance cover for free. So, the Flexi-Link plan is almost as good as any unit trust.
3) You mention that the return of combined fund since 2003 have exceed the target 6% return per year. Where can I see the information on NTUC income funds, such as benchmark, annual return since inception, turnover ratio, etc.
Reply: you can get the information from this webpage: http://www.income.coop/insurance/flexilink/
4) I understand from the talk that we shall invest in a fund that offer low cost. There is an asset class like ETF exchange traded fund, where the annual charges is only 0.3%, which is lower than 1% for the combined fund. What is your comment?
Reply: Yes, it is good for you to invest in ETF. It comes with low charges.
Actually, a portion of our Singapore Equity fund is invested in ETF. So, we are reducing our annual charge for the Singapore Equity fund to about 0.6% In my view, it is easier to invest through the FlexiLink from NTUC Income.
5) You mention that an investor should be wary of muliple layer of charges when investing in unit trust. Are you referring to a feeder fund that pass the money to mother fund? How can a retail investor find out about these charges? Most of the charges of unit trust are hidden and are not transparent to investor.
Reply: Yes, most of the funds hide this fact. It is quite difficult for you to find out. I am not able to find out myself.
6) You recommended iYoung plan. If I buy iYoung at age 27, can I still remain cover after age 30. If not, what is the alternative cheap term insurance ?
Reply: I suggest that you buy our low cost term assurance now, rather than i-Young (which is intended for someone in the early 20s.
You should make a financial plan now and invest in the Ideal plan with low cost term assurance.
7) Thank you for providing your time, effort and resource to educate the public like me. I enjoyed your talk .
Reply: Please encourage your friends and colleagues to attend my educational talks. A list of talks is given in our website:
http://www.income.coop/seminar/
Many thank for your interesting talk on financial tip for the young . I enjoy your talk. Due to time constraint, I was not able to get some queries answered. I hope to get the answer through e-mail .
1) You mention that the combined fund charges 1% annual fee. May I know the expense ratio of combined fund?
Reply: I am not clear what is being used to compute the expense ratio. Anyway, you can look at the comparison in this webpage by Dr Money:
http://www.askdrmoney.com/Ins_ILP_SP.htm
It shows NTUC Income's expense ratio to be 1% and other funds to be 1.5% to 2.5% per annum.
2) Other than through an insurance plan, can I invest in the combined fund directly through other distributers, such as Fundsupermart, DollarDex, etc
Reply: You can only invest through our insurance plan (Flexi-Link). Our fee is quite low. You only pay a 3.5% upfront spread. If you invest a large sum during our promotion, you give you bonus unit of up to 2%. So, this reduces the upfront fee to only 1.5%. You get some life insurance cover for free. So, the Flexi-Link plan is almost as good as any unit trust.
3) You mention that the return of combined fund since 2003 have exceed the target 6% return per year. Where can I see the information on NTUC income funds, such as benchmark, annual return since inception, turnover ratio, etc.
Reply: you can get the information from this webpage: http://www.income.coop/insurance/flexilink/
4) I understand from the talk that we shall invest in a fund that offer low cost. There is an asset class like ETF exchange traded fund, where the annual charges is only 0.3%, which is lower than 1% for the combined fund. What is your comment?
Reply: Yes, it is good for you to invest in ETF. It comes with low charges.
Actually, a portion of our Singapore Equity fund is invested in ETF. So, we are reducing our annual charge for the Singapore Equity fund to about 0.6% In my view, it is easier to invest through the FlexiLink from NTUC Income.
5) You mention that an investor should be wary of muliple layer of charges when investing in unit trust. Are you referring to a feeder fund that pass the money to mother fund? How can a retail investor find out about these charges? Most of the charges of unit trust are hidden and are not transparent to investor.
Reply: Yes, most of the funds hide this fact. It is quite difficult for you to find out. I am not able to find out myself.
6) You recommended iYoung plan. If I buy iYoung at age 27, can I still remain cover after age 30. If not, what is the alternative cheap term insurance ?
Reply: I suggest that you buy our low cost term assurance now, rather than i-Young (which is intended for someone in the early 20s.
You should make a financial plan now and invest in the Ideal plan with low cost term assurance.
7) Thank you for providing your time, effort and resource to educate the public like me. I enjoyed your talk .
Reply: Please encourage your friends and colleagues to attend my educational talks. A list of talks is given in our website:
http://www.income.coop/seminar/
Saturday, May 06, 2006
FAQ: Flexi Cash
1. What is this plan
Technically, it is an investment-linked plan that invests your savings in a money market fund. But to you, it may look more like a savings account that pays high interest.
But like a savings account, you can withdraw your money at any time. You are not locked in for one or two years, with a penalty for early withdrawal.
Flexi-Cash is a safe investment that pays a high rate of interest.
2. What is the expected return?
The current return on the money market is about 3.3%. After deducting 0.25% per annum for this fund, the net return to the investor is likely to be slightly more than 3%.
As the return on the money market is a floating rate, the return on this plan will also fluctuate. As interest rate is likely to increase in the near future, the return on this plan will similarly improve. You enjoy an attractive, floating rate. You are not locked in to the current rate for one year or longer.
It is possible that interest rate may come down some time in the future. The return from the fund will reduce accordingly.
3. What is the upfront spread and annual fee?
The spread is 0.25%. It is much lower than the spread for equity or bond funds, which vary from 3.5% to 5%.
During the promotion period (ie for the launch of this product), the spread is reduced to 0.1%. Yes, it is just one-tenth of 1 percent.
The annual fee is 0.25 %. It is subtracted from the inter-bank yield. You will be paid the difference, which is now about 3 %.
4. Is there any penalty on withdrawal?
There is no penalty. You can withdraw your savings at any time, based on the bid price (ie net asset value) of the money market fund.
The net asset value should be quite close to your invested capital, less the upfront spread (of only 0.1% during the promotion period), plus the interest earned on the money market (less the annual charge of 0.25%). This is almost like getting an interest rate of 3% on your savings.
5. What is the minimum amount of investment?
For an initial investment, the minimum is $5,000. For topping up
and withdrawal, the minimum is $500.
6. Are the fees subject to change?
Yes. We will give at least 30 days notice of any change. We are likely to
change the initial spread to 0.25% after the promotion period.
We will try to keep the annual fee to the very low rate of 0.25%.
We will only increase it in the future, if the fee is insufficient to meet our
operating expenses, and the interest rate on the money market
exceeds 3.5%.
Our aim is to give an net return that is attractive to our policyholders,
and higher than other types of similar investments.
7. What is the risk of losing my capital?
The risk is very small, almost negligible. The fund is invested in the
interbank market. The borrowers of the funds are the banks. A small
portion is invested in A-rated floating rate notes issued by corporate
bodies. As the rating is A or better, the risk of loss is quite small.
8. Is there any capital guarantee?
The basic product does not come with any capital guarantee.
The investor can buy a capital guarantee separately at the cost of 0.5%
per annum. By paying this cost, the investor is guaranteed that the
principal at the end of 12 months will not be lower than the principal at
the start of the guarantee period.
Effectively this reduces the return by 0.5%. So, if the return is 3%, the
net return after paying for the guarantee is 2.5%.
In my view, there is no need to buy this guarantee, as the risk is
negligible. Even if there is a loss, the amount of capital loss will be
very small.
9. Is there any insurance cover?
The basic policy provides a very nominal insurance cover.
It guarantee that in the event of death, the sum assured will not be lower
than the amount that has been invested. This means that any capital loss
(which is most unlikely) will be insured in the event of death.
If you wish to buy additional cover, we recommend that it be purchased
through a separate low cost term assurance plan.
10. How do I buy this plan?
You can come to our insurance business center (located at Bras Basah Road
and Tampoines Point). You can also see our insurance adviser.
Tentatively, the plan will be available from 1 June 2006.
Technically, it is an investment-linked plan that invests your savings in a money market fund. But to you, it may look more like a savings account that pays high interest.
But like a savings account, you can withdraw your money at any time. You are not locked in for one or two years, with a penalty for early withdrawal.
Flexi-Cash is a safe investment that pays a high rate of interest.
2. What is the expected return?
The current return on the money market is about 3.3%. After deducting 0.25% per annum for this fund, the net return to the investor is likely to be slightly more than 3%.
As the return on the money market is a floating rate, the return on this plan will also fluctuate. As interest rate is likely to increase in the near future, the return on this plan will similarly improve. You enjoy an attractive, floating rate. You are not locked in to the current rate for one year or longer.
It is possible that interest rate may come down some time in the future. The return from the fund will reduce accordingly.
3. What is the upfront spread and annual fee?
The spread is 0.25%. It is much lower than the spread for equity or bond funds, which vary from 3.5% to 5%.
During the promotion period (ie for the launch of this product), the spread is reduced to 0.1%. Yes, it is just one-tenth of 1 percent.
The annual fee is 0.25 %. It is subtracted from the inter-bank yield. You will be paid the difference, which is now about 3 %.
4. Is there any penalty on withdrawal?
There is no penalty. You can withdraw your savings at any time, based on the bid price (ie net asset value) of the money market fund.
The net asset value should be quite close to your invested capital, less the upfront spread (of only 0.1% during the promotion period), plus the interest earned on the money market (less the annual charge of 0.25%). This is almost like getting an interest rate of 3% on your savings.
5. What is the minimum amount of investment?
For an initial investment, the minimum is $5,000. For topping up
and withdrawal, the minimum is $500.
6. Are the fees subject to change?
Yes. We will give at least 30 days notice of any change. We are likely to
change the initial spread to 0.25% after the promotion period.
We will try to keep the annual fee to the very low rate of 0.25%.
We will only increase it in the future, if the fee is insufficient to meet our
operating expenses, and the interest rate on the money market
exceeds 3.5%.
Our aim is to give an net return that is attractive to our policyholders,
and higher than other types of similar investments.
7. What is the risk of losing my capital?
The risk is very small, almost negligible. The fund is invested in the
interbank market. The borrowers of the funds are the banks. A small
portion is invested in A-rated floating rate notes issued by corporate
bodies. As the rating is A or better, the risk of loss is quite small.
8. Is there any capital guarantee?
The basic product does not come with any capital guarantee.
The investor can buy a capital guarantee separately at the cost of 0.5%
per annum. By paying this cost, the investor is guaranteed that the
principal at the end of 12 months will not be lower than the principal at
the start of the guarantee period.
Effectively this reduces the return by 0.5%. So, if the return is 3%, the
net return after paying for the guarantee is 2.5%.
In my view, there is no need to buy this guarantee, as the risk is
negligible. Even if there is a loss, the amount of capital loss will be
very small.
9. Is there any insurance cover?
The basic policy provides a very nominal insurance cover.
It guarantee that in the event of death, the sum assured will not be lower
than the amount that has been invested. This means that any capital loss
(which is most unlikely) will be insured in the event of death.
If you wish to buy additional cover, we recommend that it be purchased
through a separate low cost term assurance plan.
10. How do I buy this plan?
You can come to our insurance business center (located at Bras Basah Road
and Tampoines Point). You can also see our insurance adviser.
Tentatively, the plan will be available from 1 June 2006.
Educational Talk - Financial Tips for the Young
In my educational talk, I give 3 tips to young people. They are worth at least $20,000. It could be worth as much as $150,000.
By choosing the right investment product, i.e. safe, well managed, low charges, a young person can earn up to $150,000 EXTRA over 30 years. This is the additional return, compared to investing in a low yielding investment.
The secret? Invest in a large, well-diversified, low charge fund. Invest in global equity. Invest for the long term.
I conduct a 2 hour educational talk every week. Here are the dates and venue. Just 2 hours, and you can earn $20,000 more. Or maybe, $150,000 more.
Title of talk: Financial Tips for the Young
09-05 7-9 pm Fengshan Community Club, Bedok North
13-05 2-4 pm NTUC Income Center, Bras Basah Road
25-05 7-9 pm HDB Hub, Toa Payoh (Chinese)
27-05 2-4 pm NTUC Income Center, Bras Basah Road
To attend: call 6877 3366. Bring your friend along.
By choosing the right investment product, i.e. safe, well managed, low charges, a young person can earn up to $150,000 EXTRA over 30 years. This is the additional return, compared to investing in a low yielding investment.
The secret? Invest in a large, well-diversified, low charge fund. Invest in global equity. Invest for the long term.
I conduct a 2 hour educational talk every week. Here are the dates and venue. Just 2 hours, and you can earn $20,000 more. Or maybe, $150,000 more.
Title of talk: Financial Tips for the Young
09-05 7-9 pm Fengshan Community Club, Bedok North
13-05 2-4 pm NTUC Income Center, Bras Basah Road
25-05 7-9 pm HDB Hub, Toa Payoh (Chinese)
27-05 2-4 pm NTUC Income Center, Bras Basah Road
To attend: call 6877 3366. Bring your friend along.
My own flexible annuity
I have created my own flexible annuity.
I invest my savings in the Flexi-Link plan. It is invested in the combined fund (growth) and in Singapore equity. I may switch a portion into Global equity within two years.
I have started to make monthly withdrawal from my Flexilink. Since I am still working, I just make a token withdrawal of $100 each month. It is deducted from my Flexi-Link and credited to my bank account during the first week of each month.
This is working well. I get an e-mail each month saying that $100 is credited credited to my bank account, and x number of units are encashed. I checked my bank account (through the internet) and found the $100 has been credited.
When I retire in a few years time, I will increase the monthly withdrawal to $3,000. I may change it to a larger or smaller sum, according to my needs. It is flexible.
My investments produced a yield of about 15% per annum for the past three years. Wow!
Looking towards the future, I hope to get between 6% to 8% per annum over the long term. This is possible, based on the benchmark return on equity for the past 10, 20 and 30 years.
I invest my savings in the Flexi-Link plan. It is invested in the combined fund (growth) and in Singapore equity. I may switch a portion into Global equity within two years.
I have started to make monthly withdrawal from my Flexilink. Since I am still working, I just make a token withdrawal of $100 each month. It is deducted from my Flexi-Link and credited to my bank account during the first week of each month.
This is working well. I get an e-mail each month saying that $100 is credited credited to my bank account, and x number of units are encashed. I checked my bank account (through the internet) and found the $100 has been credited.
When I retire in a few years time, I will increase the monthly withdrawal to $3,000. I may change it to a larger or smaller sum, according to my needs. It is flexible.
My investments produced a yield of about 15% per annum for the past three years. Wow!
Looking towards the future, I hope to get between 6% to 8% per annum over the long term. This is possible, based on the benchmark return on equity for the past 10, 20 and 30 years.
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