Saturday, April 08, 2006

Technology Fund performed well during past 3 years

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

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

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

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

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

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

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

My view turned out to be right.

Friday, April 07, 2006

Adequate provision for motor claims

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

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

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

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

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

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

Additional Cover for Renting a car overseas

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

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

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

Thursday, April 06, 2006

Quite a hassle to file my income tax returns through internet

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

Here are the problems:

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

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

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

Wednesday, April 05, 2006

Do not rent your car to a stranger

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

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

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

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

Tuesday, April 04, 2006

Banks charge differently from what they say

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

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

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

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

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

Larry Haverkamp

Monday, April 03, 2006

Annuity plans needs improvement

Lianhe Zaobao

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

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

I agree.

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

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

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

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

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

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

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

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

Tan Kin Lian
Chief Executive Officer
NTUC Income

Tips on Financial Planning

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

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

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

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

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

Assessment on the spot

Straits Times

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

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

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

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

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

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

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

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

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

Freddy Neo
General Manager
NTUC Income

Sunday, April 02, 2006

You can change a nomination


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


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

Policyholder ask for supplementary liability cover

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

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

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

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

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

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