Discount of $500 ??

Some dealers offer a further discount of $500 to the purchaser who agrees to insure the car with their tied insurer.

The premium charged by the tied insurer is much higher than NTUC Income. After the $500 discount, the difference is quite small. If you are already enjoying a loyalty discount of 5% from NTUC Income, it is better to stay with us.

Model                     Tied     NTUC  
                          Insurer  Income
Honda Civic 1.8 Sedan 5   $1995    $1575  
Honda Jazz                $1680    $1280  
Nissan Sunny 1.6 EX Auto  $1578    $1319  
Vios 1.5 Auto             $1578    $1172  

The difference in premium could be $400 a year. If you insure for 10 years, you may be able to save $4,000 by insuring with NTUC Income.

Invest in a well diversified fund with low charges

I saw an investment product offered by a bank that has the following features:

- sales charge of 5%
- annual management fee of 1.75%
- pays out 8% per year, but this may be done by eroding the capital
- sell call warrants

Selling the call warrants allows the fund to earn income, but it also caps the gain that can be earned.

It is better to invest in the combined fund offered by NTUC Income. It is well diversifed and imposes a sales charge of 3.5% and an annual management fee of 0.95%. Due to the difference in charges over a 10 year period, the investment in the combined fund will pay you 10% more than the product offered by the bank.

The actual return depends on the underlying return of the fund. Here I assume that they are both funds provide the same average return over 10 years.

Advice: it is better to invest in simple financial products that have low charges.

Visit www.askdrmoney.com to get a comparison of the charges.

Avoid Investing in Structured Products

I avoid investing in structured products.

Here are my reasons:

- these products have high charges
- the charges are not transparent
- they sometimes have risks which are not well explained
- the investor usually do not get the full gains from the investment.

It is better to invest in unit trusts or investment linked funds. The charges are disclosed to you. Although the investor is exposed to the risk, at least the full gain goes to the investor.

It is better to invest in simple, transparent products.

Save $50 to $200 on your motor insurance premium

We compared the motor insurance premium for 10 popular models charged by NTUC Income, company A and company X. These are the three largest motor insurers in Singapore.

The comparisons are shown in www.income.coop/insurance/motor/comparison.asp

The premium rate for NTUC Income are between $50 to $200 cheaper than the two insurers.

Our policyholders can enjoy the further 10% discount, as follows:

- discount of 5% when they insure directly with us
- discount of 5% when they insure with us for three years or longer.

You can save a lot of money every year, by insuring with NTUC Income. We hold a 40% market share. Many people like our attractive premium rates, good service and convenience (ie report accident at Idac center and let us take care of the repair).

Refund of annuity are subject to estate duty

Someone asked me if the refund of capital on a life annuity is subject to estate duty.

The answer is "yes". It forms part of the estate. But, the refund is likely to be less than the invested capital (as the capital is reduced by each payment). If the annuitant dies after 15 years, the refund will disappear.

Some life annuity does not have a refund feature, and pays a higher amount.

Similarly, any gift made during 5 years before death is also subject to estate duty. Most people will live more than 5 years after making the gift, if they do it at a younger age.

I advise people - make your gift earlier when you are not too old. It will be more useful to your children when they start their own family or buy a house. If you do not wish to give them a lump sum, buy a term annuity so that your gift is given to them in installments.

Increase regular savings

In a recent survey, I was surprised to learn that 50% of people in the age gropu 40 to 55 wants to increase their regular savings.

This suggests that many people realise that they have inadequate savings for their retirement needs.

I thought that this group is likely to be squeezed by the cost of living, medical bills, repaying loans, and sending children to university.

But, they must have taken these factors into account, and decide that they need more savings.

What is the best plan to meet this need?

It is the ideal plan from NTUC Income:

- 100% of savings is invested from first month

- invested in the combined fund: large, well diversifed, low charges, attractive return

- cost of insurance protection is low, use the decreasing term assurance.

I hold educational seminars every two weeks. Call 6877 3366 to register.

Spirt of Enterprise Award

The Spirit of Enterprise invites nomination for the 2006 awards. Any business that meets the criteria below can be nominated, inculding pizza parlors, clothing stores, discos etc.

Criteria: These are just general guidelines, and the panel exercise flexibility. (for past nominees see: www.soe.org.sg )

1. In business for at least 5 years and is successful enough to provide the family’s needs.

2. Is in good standing with whoever licenses the business and is not under any court, tax or police filing.

3. A small to medium enterprise, which has an inspiring and interesting story to be told. Preferably, it has some historical antecedents in the history of Singapore.

4. Special attention will be paid to an entrepreneur who is innovative, forward-looking, constantly planning to bring the company to another greater phase. For example, entering new markets, introducing new products or services or willing to use new technologies to increase productivity and consumer services.

5. Not a recipient of Temasek or any similar government investment programmes.

6. Has not been honoured by any similar group.

Send your nomination to: www.soe.org.sg

Estate duty puts retirees in a dilemma

Editor
Forum Page
Straits Times

I refer to the letter from Ms Janice Ong entitled "Estate Duty puts retirees in a dilemma" (ST 28 Dec 2005).

Currently, estate duty is payable on liquid assets in excess of $600,000. Ms Ong said that a retiree needs more than $600,000 to maintain a reasonable standard of living.

I wish to give the following suggestions to a retiree with large savings on how to avoid paying estate duty.

1. Invest a significant portion of your lifetime savings in a life annuity. It pays an attractive monthly income which is guaranteed for a lifetime. As the life annuity includes the gradual release of capital during the expected lifetime of the retiree, it will be free of estate duty.

2. Invest in a participating annuity which increases with bonus in most years. The increased payment will help to offset the higher cost of living.

3. Keep up to $600,000 in liquid assets. This gives you the flexibility to meet unexpected cash needs, and is within the exemption limit.

4. Transfer any remaining savings to your children earlier, rather than on your death. If you do not wish to make a lump sum gift, you can buy a term annuity to transfer the money in annual sums over a certain number of years.

You can find more about life annuity from our website, http://www.income.coop/insurance/glannuity

NTUC Income has a market share of about 60 percent of all annuities sold in Singapore. Nearly 30,000 people have bought an annuity from us. Most retirees invest between $50,000 to $100,000. The largest investment in an annuity exceed $1 million.

Tan Kin Lian
Chief Executive Officer

1,500 people visited educational website within 2 days

1,500 people visited the educational website, www.KnowYourInsurance.com.sg,
within 2 days of its launch.

180 passed the test. They are eligible for a discount when they buy insurance from NTUC Income.

NTUC Income offers fair settlement of claims

NTUC Income offers fair settlement of claims. Sometimes, the clainmant is badly advised and tried to ask for a higher compensation. Here is a recent case.

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

Our insured, who was driving a motor cycle, had hit into the deceased, who was crossing a 4 lane road (not at a pedestrian crossing). Approximately 2 weeks after the accident, the deceased died.

The deceased's wife made a clim in excess of $250,000 for dependency and pain and suffering suffered by her late husband.

Our claims committee made an offer to settle the claim for $35,000. The claimant rejected our offer and insisted on $250,000.

This matter was heard in court. The final award was for $26,000. With interest, the total was $29,000.

Cost of $6000 was awarded against the claimant. We were also allowed to claim for our cost of $30,000 to defend the claim in the high court.

This has been very costly for the claimant. If she had been properly advised, she should have accepted our offer of $35,000 and save a lot of money on legal expenses.

NTUC Income's contribution to NKF

In 1990, NTUC Income contributed $300,000 to set up the NKF dialysis center in Bukit Batok and $50,000 (raised from our staff and agents) for the running cost of the center. This was a special project under our 20th anniversary celebration.

In the subsequent years, we contributed a very modest sum (ie less than $5,000 a year) to the NKF. We felt that NKF was already raising more than needed from other sources.

During tihs period, we channelled our contribution to the Community Chest, which served 100 times the number of beneficiaries in Singapore. In 2005, we contribute nearly $250,000 to the Community Chest. This compriseof the contribution from the staff and matching contribution from NTUC Income.

We will find appropriate ways to support the NKF in future years, based on its future needs. We urge the public to continue its support of the NKF, who is charting its future directions.

600 people tried website within 1 week

NTUC Income's latest educational website has so far attracted more than 3,000 visitors. Last week alone, more than 600 people has registered and used this site.

We did a survey on this group of 600 users (of which 65 per cent are external users, i.e. non staff). A good 96 per cent responded that they are happy with the website and the quality of materials used.

The most popular topics are:

investment linked policies
medical insurance
i-Young (package for young people)
personal accident
motor insurance

New website to educate public on insurance

NTUC Income is pleased to announce the launch of an educational and interactive website on insurance at www.KnowYourInsurance.com.sg.

Many people may not think about insurance until they are approached by an insurance agent. Some people do not like to meet up with an insurance agent, as they fear that they may be pressured into buying insurance policies that they do not need or cannot afford. Many people also find insurance quite complicated.

However, it is important that everyone should have insurance to protect against the risk of premature death, accidents or major illnesses.

NTUC Income recently conducted a public survey to better understand the insurance needs of people between 30 to 40 years old. The results interestingly revealed that about 70 per cent of the respondents preferred learning the basic facts of insurance in their own time, if it can be made easily available to them.

KnowYourInsurance.com.sg is the new approach in educating the public on insurance.

Chief Executive Officer Tan Kin Lian said, "NTUC Income believes in educating our consumers on insurance products and helping them to make the right choices. By setting up this educational website, we provide an option to the consumer to learn about the basic facts of insurance on their own. It is an easy and fun way to learn."

The website covers the common insurance products, such as motor insurance, personal accident, financial planning, travel insurance, saving for education and medical insurance."

This website has an added, challenging feature for the visitors to test their knowledge at the end of each topic. A visitor who completes the test will also receive a discount when he or she purchases an insurance policy directly from NTUC Income.

Reply: accident with taxi leads to insurance woes

21 December 2005

The Editor
Online Forum Page
Straits Times

I refer to the letter entitled "Accident with taxi leads to insurance woes" by Jonathan Tan Meng Chye (ST Online Forum, 19 Dec 2005).

NTUC Income insures about 40 percent of all vehicles in Singapore. Our policyholders regularly encounter this type of situation. We wish to give the following advice, as a guide to motorists.

Motorists must always maintain a safe distance from the car in front. They should be able to stop in time without hitting it in the event the car in front has to stop suddenly. The recommended distance between cars is about 2 car lengths.

When a car collides squarely into the back of a car, the presumption is that the driver of the rear car was negligent in not keeping a safe distance. To overcome this presumption, the onus is on the driver to prove that the front car had cut so suddenly into his path that he was unable to avoid colliding into it.

The workshops that were approached by Mr Tan were not keen to assist him in pursuing a claim against the taxi driver, as it will be an uphill task to prove his case. He should have a witness to prove his assertion that the taxi driver had cut into his path to succeed fully or partially in his third party claim.

If Mr. Tan is able to prove his case, the law and our courts will protect him and enable him to recover his loss from the third party. Further, if Mr. Tan is able to prove that the taxi driver was negligent, he will be able to recover part of his legal costs from the taxi driver. Generally, the legal costs recoverable from the party at fault is about two-third of the costs that the successful party would have to pay his own lawyer.

In this case, we advise Mr. Tan to claim against his own insurance policy. If we are able to establish that the other driver was 80 per cent or more at fault, we will not penalise Mr. Tan's NCD.

Freddy Neo,
Claims Senior Manager

MMS initiative has got off to an encouraging start

Since the launch of this initiative one month ago , 40 policyholders had sent in their accident photos to NTUC Income.

This innovative approach helps the insurer to better handle iability dispute between the parties involved in the accident.

The policyholders are encouraged to use the mobilephone to take photographs of the damages to the vehicles immediately at the scene of the accident and to send them by MMS to NTUC Income. With the photographs as additional evidence, the assessment officers will be able to decide more accurately of the apportionment of liability between the parties.

This has proved to be effective. For 50% of these cases, the photographs showed that our policyhbolder was not at fault in the accident. For 40% of the cases, the photographs showed that our policyholder was less at fault compared to the other party.

The photographs help to strengthen the report of our policyholders, in the situation where both parties give different versions of the accidents and damages.

NTUC Income has to deal with about 200 cases of accidents each month, where both parties dispute the facts of the accident. Based on our experience, the use of the "on-the-spot" photographs will help to solve about 50% of the these disputes. This is based on the well known experience, "a picture tells a thousand words".

With the increased popularity of mobilephone cameras, we are confident that more of our policyholders will use this new service.

Policyholders can send their accident photos via MMS to 91INCOME or email us at photo@income.com.sg.

They can also call our motor hotline at 67886616 if they have any queries.

Freddy Neo
Senior Manage, Claims
NTUC Income

Policyholder is happy with our review

Dear Mr Tan,

I would like to thank you for reviewing my wife's case. I am pleased to know that you have a team and procedures in place to handle such genuine appeals.

I understand that being the largest insurer in Singapore, sometimes you do face contraints of all sorts. But this review process is necessary as it provides a very positive image as being the largest insurer in Singapore that DOES LISTEN even to small clients like us, regardless of outcome.

Thank you all and once again.

How can we serve our policyholders better in 2006?

How can we serve We asked our policyholhoders better in 2006? We asked them. Here is the reply from 174 policyholders:

1. What is your top priority for the next 12 months?

* Get a better return on your savings [ including CPF ] 61%
* Increase regular savings 39%
* Re-schedule loan to reduce interest or monthly repayment 12%

2. How do you like to achieve your goal?

* Learn financial planning from an educational website 42%
* Attend an educational seminar 27%
* See a financial adviser 20%
* See an insurance adviser 12%

3. What is your top wish from NTUC Income?

* Offer new products at a discount for existing policyholders 67%
* Organise educational seminars 27%
* Provide free financial planning advice 26%
* Improve customer service 21%

Know Your Insurance

We invite you to visit this website and try one or more of the topics. You will be asked to give your feedback at the end of the topic. We hope that you find it to be interesting.

www.KnowYourInsurance.com.sg

Saving for your child

Do you know the answes to these questions?
Visit www.KnowYourInsurance.com.sg

1. How much should a parent save for a child's education?
2. What happens if the saving is insufficient to fund the tertiary education?
3. Which type of investment is likely to give the best return on the savings?
4. Over a 15 year period, what is the difference between a low return (2% p.a.) and a high return (6% p.a.)?
5. What are the advantage of a flexible saving plan?
6. How can you reduce the risk of investment?
7. What type of rider provides adequate coverage at a low premium?

... and many more.

Is Incomeshield adequate?

You are the most open, frank and trusted CEO I hv known so far. Thank you in advance for allowing me to write directly to you.

Incomeshield advertised "Why buy expensive Shield plans when Incomeshield provides SUFFICIENT cover for B2,B1 and A class wards ?"

Q1. Does this means ALL inpatient sub-limits in Incomeshield plans A,B and C are sufficient to cover all types of operation bills in their respective wards ?

Reply: The sub-limits are sufficient for most types of hospital treatment. It may be insufficient for some major illness. But, I understand that most people are insured under a dread disease policy (life insurance policy), which will pay for these major illness.

Q2. If not, pls advise probability of one exceeding each sub-limits based on Incomeshield past claim records.

Reply: If you select the right ward in restructured hospital, the sub-limits should be sufficient for more than 90% of the cases.

Q3. When will Income offers a rider for "as charged basis, ie. without inpatient sub-limits" per Straits Times report dated 6 Jul 2005, page H21.

Reply: We have introduced a Plan P that offers higher coverage than plan A, and is suitable for private hospital. We are still working on the "as charged" rider, and have not decided on how to implement it.

Strongly believe Income will woo many undecided Shield holders to Incomeshield plans if answers to above questions are publish nationwide.