Do not allow the adviser to churn your CPF investment

Recently, there is some articles in the newspaper about "churning" of investments using CPF savings. Let me explain what the issue is.

Churning takes place when there is unnecessary buying and selling of investment in order to generate income for the insurance adviser.

A customer has to incur a front-end spread (ie the difference between the bid and offer price), when investing in this product. Most companies charge a spread of 5%. NTUC Incomes charges a lower spread of 3.5%.

If the investment is sold within a short time, there is insufficient time to realise a good return to recover the front end cost. We advise CPF funds to be invested for the long term and not for short term speculation.

NTUC Income is against churning, as it is at the expense of policyholders. We pay a lower rate of commission to our insurance advisers. They do not have the incentive to churn. Our supervisor call the policyholder at the time of purchase to ensure that they properly understand their investment and the features of the product.

We have the lowest rate of early surrenders in the industry. If a customer wishes to surrender his investment, we explain the disadvantages of early surrender. We also provide them with other options such as switching from one fund to another so that they avoid high front end cost.

Radio Ad on Flexi-Cash

Our insurance consultant in the business center obtained a lead from Hotline from a customer who heard our radio ad. The customer was impressed with the ad on Flexicash.

She signed up $15,000 and mentioned that "your CEO says that we can earn 3% or more , I take his word"

Dance Appreciation Series at the Esplanade

The Singapore Dance Theatre is partnering with The Esplanade to introduce several interesting dance items at a special price of only $10 per person (plus $1 SISTIC fee).

Normally, a dance performance cost between $50 to $100 in Singapore. We are offering a special price to encourage more people to appreciate and enjoy this art form. The dance items are choreographed by world famous and local choreographers

Do not miss this wonderful opportunity. Book your ticket early.

Date: 14 August, 15 August, 6 September 2006
Time: 4 p.m (1 hour performance)
Venue: Esplanade Concert Hall

Tickets: Esplanade Box Office & SISTIC's outlets. SISTIC Hotline: 63485555

ETUDES An Introduction to Class
Excepts from THE NUTCRACKER by Jeffrey Tan
DYING SWAN by Thierry Malandain
BOLERO by Thierry Malandain

Advertisement: Soar in your Insurance Sales

If you already have an life insurance licence, and find it difficult to meet the sales quota, you are working for the wrong company.

Come to NTUC Income. You can enjoy:

* products that are easy to sell
* better value for your customers, from a cooperative
* attractive rate of commission, payable upfront
* sales leads from our large customer base
* ease of marketing through product FAQ
* marketing through the telephone
* monthly advance to provide at least $2,500

Do not be stuck with the old way of marketing life insurance.
Move to the marketing of the future.

Call 6877 3366 or visit www.mailbox.coop/0001 (available from 28 July)

New system for Incomeshield helps to clear the backlog

Here is a report from my head of Group & Health Department.

We have recently introduced a new computer system to handle the upgrade to Enhanced
Incomeshield. It works well and is able to clear many cases efficiently.

We have processed more than 20,000 cases (out of 60,000) that do not require underwriting. However, we continue to receive 10,000 new requests each week. We anticipate this will only start to slow down next month.

We expect to clear the backlog completely by Sep 2006. For new requests received at our enhanced@income.com.sg, we send an email reply of acknowledgement to the sender on the same day.

AIA policyholders have to pay premium longer than projected earlier

The Straits Times reported that policyholders of AIA have to continue to pay more premium, i.e. longer duration of premium payment. This was due to poor investment returns.

As many as 120,000 policies are affected. These are the policyholders who bought the Financial Guardian, Choice Life and Prime Life.

Many years ago, when the advisers from NTUC Income approached me to make the same projections to the policyholders, I refused to do so. I think that it is too speculative.

But, the agents from AIA did roaring business by making this projection. Now their policyholders are disappointed and have to suffer in silence.

NTUC Income does not use marketing gimmicks to sell our products. We offer "honest" insurance products that are fair and good for our customers.

Flexi-Cash: it takes 12 days to recover the initial spread

A policyholder invested $200,000 in the FlexiCash and monitored the price movements. He found that it was still making a loss after a few days. He compared to a ban deposit that shows the interest accruing immediately.

Here is my explanation.

Dear

There is a spread of 0.1% when you make your investment. This is the difference between the offer and bid price of the unit. When you make an investment, you pay a spread of $200.

The bid price is expected to grow based on the yield of the money market rate fund. Based on the current rate, the yield should be 3%. It can go up and down according to the money market.

It will take about 12 days to earn enough to cover the spread. After that, you can earn more.

The advantage of Flexi-Cash is the higher interest rate and no lock-in period. The slight disadvantage, compared to a bank deposit, is the initial spread, which takes 12 days to recover.

During the promotion period, which spread is 0.1%. After the promotion, the spread will be increased to 0.25%. At that time, it will take about 30 days to earn enough to cover the spread.

I hope that this explanation is clear to you. I will put it in the FAQ so that this point is clearer.

A few months to clear our backlog. Sorry.

FROM POLICYHOLDER

Dear Mr Tan,

I am a big fan of NTUC income. In fact, most of my insurance policies and those of my family are from Income. However, I really have to feedback to you that Income’s back room operation is one of the slowest I have ever seen.

Previously, I waited for 6 months to receive my policy document for SAFRA living care. And that is after 3 calls and 1 email to chase after the document. The reasons given by your staff was that the computer system went through some migration.

Currently, I am waiting for the Incomeshield rider confirmation for my children, which I had made payment 2 months ago. I cannot help but wonder, what is going on inside Income?

All the best to Income.

MY REPLY

Dear

I must admit that my group and health dept, which handles SAFRA and Incomeshield, is in a mess right now.

We received 60,000 requests for upgrading into Enhanced Incomeshield. My staff absolutely could not cope with the work volume. Guess what, one third resigned.

Give us a few months to sort out the backlog. In the meantime, I am sorry that there is nothing that we can do about the delay. Just be patient.

FROM POLICYHOLDER

Dear Mr Tan,

Thanks for the prompt reply. Really appreciate it. I hope you can find more capable men to assist you.

One suggestion is to find part-time housewives or students during school holidays to help with all the paper work.

Another way is to outsource some jobs to other companies. Try out 1/3 and 2/3 rule. 2/3 inhouse and 1/3 outsource.

I hope I am not too nosey.

MY REPLY

Thank you. We actually have help from the other depts. Some of the work needs some technical knowledge, so part time workers does not really help. But, I appreciate your concern.

Best Deal for your cash

The Sunday Times on 16 July has an article comparing fixed deposits. Here's what it said about our Flexi-Cash.

BEST DEALS

MOST, if not all banks, offer 3 per cent or more in interest for fixed deposits using fresh money only. There are varying lock-in periods and minimum sums to consider.

Insurance cooperative NTUC Income recently launched a scheme called Flexi-Cash. The minimum deposit is only $5,000, and you can withdraw your deposit at any time with no penalty.

The interest rate currently is 3 per cent a year, but it is not fixed. It will move ever so slightly, depending on the yield from short-term bonds that Income invests your money in and on interest rates in the Singapore money market that Income can lend at.

Among the banks and Income, interest rates differ by a fraction of a percentage point, which is insignificant unless you have at least six-digit sums to deposit.

Be careful of complex product

A life insurer has introduced a single premium investment linked product with these features:

- 7 year lock in period
- 4.9% annual payout
- return of 100% principal at maturity
- additional insurance cover of 110% of invested amount
- initial fee of 5% to 6%, annual fee 1 to 1.2% pa

This looks attractive. Our expert analysed the product, and found the following features:

* The product feeds into a specialty fund managed by an investment bank through a special purpose vehicle.

* It targets high yearly return and full return of principal at maturity

* The annual payout and maturity value are not guaranteed - they depend on low default rate of "reference entities".

This appears to be a complex product, with risks that are quite difficult to understand (even to my expert).

Existing motor polichholder wants to enjoy installment payment

FROM POLICYHOLDER

Dear Mr Tan,

Am I allowed to renew my road tax and motor insurance with instalment payment?
I am a current policy holder. I was told it is only extended to newly joined members and why is this so? What are loyal members not taken care of?

Please reply urgently. How can I pay by installment, because S$1,000 upfront is a lot of money.

REPLY

Yes, you will enjoy the privilege of installment payment. My colleague will contact you to handle your request. If you had called the telephone number that is shown in our advertisement, you would have got the correct information.

Annuitant Club

Dear Mr Tan

I am an active member of the Annuitant Club.

I would like to thank you for all the facilities afforded to annuitants. I would like to compliment especially the services and commitment of Mary Lim, the coordinator of all the activities, events and functions.

Our group truly enjoyed all the activities organised. Mary always make sure that everything is near perfect. Her services and commitment is exemplary.

We trust you will continue to support us in every possible way to enjoy our retirement years.

Logic9 (Sudoka) keeps a friend actively engaged

My friend in America is taking treatment for cancer. I sent a set of Logic9 (Sudoku) books to him. Here is an e-mail from his wife:

Dear friend,

You have a new Sudoku player here in America! D.... learned how to go about it from a friend and he has been doing it ever since!

We came out to our home in the West for a week in between treatments (he goes back in the hospital the morning after we arrive home). He bought a book with beginner, intermediate and difficult challenges. He loves numbers so this is a good brain teaser and will help him when he is in the hospital also.

Thank you once again for introducing the game to him. You are the best! As an aside, our friend who taught him, just tore all four ligaments in her knee waterskiing on the second day of their vacation. She had her knee operated on and has to stay still for six weeks. She said she would go crazy if she wasn't able
to keep her mind occupied.

A touching show of trust

FROM CUSTOMER

Dear Mr Tan,

I came across your blog with great interest, and admire your candidness and most of all your willingness to face queries straight on, with undeviating statements and replies.

I had been wondering from whom I should get my insurance and now I am fully confident I would like to take it up with you/NTUC.

Could you possibly revert, or kindly provide your best personal referral and/or contact person, as to how should I go about signing up insurance with you/NTUC? I have every trust and faith in your recommendation, as I would look forward to becoming a NTUC Insurance Policy Holder with you as its leading Officer always.

MY REPLY

Dear

I am very touched by your show of trust. I will ask my specialist in the business center to contact you.

My fond memory of Lim Kim San

I am sad to learn about the demise of Mr Lim Kim San, a pioneer of modern Singapore, at a ripe old age of 90 years.

I have not met Mr Lim personally, but I have a wonderful memory of a message given by him 30 years ago.

I was involved in Marine Parade constituency. We wanted to produce a monthly newsletter for the constituency. It was the first of its kind at that time. We wrote to Mr Lim for a message. He was the Minister for National for National Development. Marine Parade was a HDB estate, created out the sea, ie on reclaimed land.

In his message, Mr Lim said, "Marine Parade has no past. It only has a future". I remember these wonderful words over the years.

Views on the Singapore Economy

INTERVIEW WITH SMART INVESTOR MAGAZINE

1) Over the past few years, the Singapore Government has restructured the economy and sought to remake Singapore. Some of these initiatives (such as CPF cut, shift towards a monthly variable component pay system, emphasis on education & retraining) were not exactly welcomed by the ordinary men-in-the-street. How successful do you think these measures have been?

Reply: Generally, these measures have been quite successful. They have contributed to the robust economic growth that was experienced over the past two years. The ordinary people may look at the immediate impact on their wages, and feel pessimistic about some of these measures. The real test is the ability to grow the economy and create more jobs. The recent increase in employment has led to a tight labour market, which is reflected in higher wages. The ordinary people will benefit from the higher wages soon.

2) Was there any specific measure which left a lasting impression on you?

Reply: I am impressed with the innovative measure to allow the refinancing of a property loan and allowing banks to have higher priority over CPF savings. This allows the banks to keep the property loan for a longer period, even though the property value may have dropped below the total charges (comprising of the loan and the CPF savings). It helps to stabilise the property market and gives it a longer time for the property values to be adjusted. There is no need for the banks to call back many of the property loans that have entered into negative equity. In so doing, we avoid a property crash.

3) Singapore economy is heavily dependent on external factors. With the uncertain global environment today (escalating oil prices, high US interest rates), do you think Singapore could achieve the projected GDP growth of between 5-7 per cent this year?

Reply: I think that it is still possible to achieve the projected growth rate. If the global economic environment continues to be difficult, we will probably be at the low end of the range. It will still be quite encouraging.

4) It has been reported that our employment outlook has improved. Is it likely for China or India to take away a significant portion of the existing jobs in Singapore due to their supposedly lower level of business costs? How successful has the Government's efforts to cut business costs (eg. reducing corporate taxes) been?

Reply: With the adjustment of business costs during the past few years, we are now quite competitive globally. The increase in employment is likely to be sustainable over a longer period. The lower manpower costs of people from India and China have already been factored in. We do not need to worry too much about this source of competition. The key is to upgrade our ecomony and find new ways to utilise our people and resources.

5) Under the Singapore Tourism Board 2015 Vision, the STB aims to triple Tourism Receipts to $30 billion; doubling visitor arrivals to 17 million; and creating an additional 100,000 jobs in the services sector by 2015. Are these initiatives (such as annual campaigns like the Great Singapore Sale, establishment of integrated resorts) sufficient to draw in the tourists, as our regional rivals are miles ahead of us?

Reply: We have to find ways to improve the attractiveness of Singapore to the international tourists. We may get a boost with the opening of the integrated resorts. We can also get some excitement from the development of the sports industry and the arts and culture industry. These activities may take a few years to develop. We have made a start. Let us learn how to make them more successful.

7) What else do you think the Government could do to further grow and sustain the economy?

Reply: We need to improve the efficiency of our financial services industry. At present, there are too many complicated products that are not well designed for the ordinary people. We have to streamline these products. We also have to improve the products to make them more easily understood by the general public, and give people an attractive return for their long-term savings.

How is interest calcuated on Flexi-Cash?

Question: I have invested in flexi-cash and wish to clarify on the followings. You said that the investor earn based on the bid price minus 0.1%. Looking at SIBOR, there are 5 different rates, namely 1mth (3.5%), 2mths (3.5625%), 3mths (3.625%), 6 to 12mths (3.6875%).

If investor conduct withdrawals and/or additional deposits from time to time, which of these rates would be applicable and do you provide statements to show the details of all these transactions?

Reply: The interest will be based on the average yield of the money market fund. As the fund is invested in a mix of instruments of different tenure, you will get an effective average of these instruments.

Question: Your example shows that the interest rate would be converted to unit price. What is the formula on the conversion?

Reply: We compute the bid price of the unit every day. This bid price is posted daily. It should move daily according to the average rate yield earned by the investments.

Question: If I send a cheque, when will my interest start accruing?

Reply: We will compute the unit price based on the date of transaction. This should be the date that your cheque is submitted for clearance, or it could be the date that the cheque is cleared.

NTUC Income assists owners of parellel-import Toyota cars

SINGAPORE, Tuesday, 18 July 2006 -- NTUC Income is offering assistance to owners of parallel-import Toyota cars recently recalled for their faulty steering. The affected models are Toyota Prius, Wish, Isis, Ractis and Corolla.

On 5 July, a Straits Times article reported a recall of about 5,000 cars to fix this faulty steering has run into problems because some of the importers have closed down.

"We understand that some of our policyholders who have bought their cars from parallel-importers are experiencing difficulties in replacing the faulty steering, as their parallel-importers have closed down or are unable to honour their warranties. Without the proper replacement of these faulty steerings, we are concerned about their safety on the road," said Mr Freddy Neo, General Manager of
NTUC Income.

Singapore's largest motor insurer, NTUC Income, has written to offer assistance to 2,759 of its affected policyholders.

NTUC Income is referring a professional workshop to carry out the replacement of their steering at a cost of S$250 plus GST. In addition, the insurer has given its policyholders an option to repay their replacement costs in five instalments.

While waiting for the parts to arrive in Singapore, a check-cum-tightening of the steering assembly can be arranged at the workshop at no additional charge.

Policyholders who require more information may contact NTUC Income's motor hotline at 98Income (98 462263).

Insure against personal liability of directors and officers

Editor
Forum Page
Straits Times

I refer to the article entitled SATA acts to insure its board against lawsuits" (ST 14 July 2006)

NTUC Income offers a Directors and Officers Liability Insurance cover to the Singapore Anti-Tuberculosis Association.

The policy comes in two parts. The first part indemnifies the directors and officers for the defence costs if they are successful in defending an action brought against them in connection with the management of the company. The premium for this portion is quite inexpensive, and is the sum of $275 quoted in the article.

We also offer an additional cover, to reimburse the company for the defence costs in the event that the directors and officers are not successful in defending the charge for the wrongful act brought against them. The premium for this cover is higher.

The total premium for both covers works out to about $300 per director per year. The actual premium varies according to the type of business.

We wish to suggest that all organisations should a directors and officers liability insurance, regardless of their size or nature of business. Directors have personal liability in the discharge of their duty and should be protected. It has now been shown that charitable organizations are also exposed to this risk. Most businessses prefer to buy the full cover, comprising of the two parts. Even though the cost is higher, it is still quite modest.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Difficult to access Blogspot in Kunming China

I had a lot of difficulty in accessing Blogspot in China. I could access other websites easily, including Blog. It happened for a few days.

When I returned to Singapore, I can access Blogspot immediately. I suspect that Blogspot is not welcomed in China.

Save for your child in an Ideal plan

A parent can save for a child in an Ideal plan.

It is expected to earn an attractive return that can be higher than a traditional education policy. It has the advantage of being flexible, i.e. you can change your regular savings and also the timing of the withdrawal for your child's education. You can also use the savings for other purpose to benefit your child.

Compared to similar plans from other insurance companies, our Ideal plan could give a return of 20% higher. This is due to our lower charges, which allows more of the savings to be invested in the plan. If the projected amount is $50,000, our plan can give up to $10,000 more. That is a lot of money.

To find out more, call 62 INCOME (62 462663)

Motor Insurance Covers Injury To Third Parties

QUESTION.

As an orthopaedic surgeon, I have to write medical report for my patients who were unfortunate enough to be involved in road traffic accident.

The more unfortunate ones may lose their ability to work and some will lead long term, expensive medical care.

Whilst my sympathy lies with these victims, I also wonder what sort of bills the guilty party will face. I believe some court awards to accident victims may be very high, to cover the medical bills and perhaps loss of future earnings etc.

Whilst I do not foresee myself involving in major car accidents as the guilty party, this sort of thing is very unpredictable.

Naturally, I am not sure if I would be able to hand the potentially hefty damages that the court may award. I would not want to spend the rest of my working life paying off this debt, or worse, ending up as a bankrupt.

I do not think my vehicular insurance would cover such things. Should I buy a personal liability insurance?

REPLY

If you drive a car and you injured someone in an accident and are liable, the motor insurance policy will cover your liability. The third party injury is covered by the motor insurance.

However, if you cause this injury through another negligent act, ie not involving your car, then you are personally liable.

We do have a personal liability insurance plan. If you are interested, let me know.

Customers want assurance that the investment is safe

FROM CUSTOMER

In your posting, you said: investors have over-reacted to the concerns for inflation. The correction was exaggerated by selling and unwinding of leverage positions by hedge funds.

I hope that NTUC can help policy holder monitor the fund should like should ensure that none of the find wil lose money.

I don't trust (three company names deleted) because I get the feeling that their agents just want to earn my money and don't care about my investment.

After attending your talk, I want to invest with NTUC. I need assurance that I will not lose my hard earn CPF money and cash savings.

MY REPLY

If you invest in a large well diversified fund, eg the combined fund, for 10 years or longer, the risk is actually very small. While the investments may go up in some years, and down in other years, the average over several years should be better than the return on bonds and other safe investments.

By investing in a large fund, you get diversification and is not exposed to bad stock
selection.

I also have most of my personal savings invested in our combined fund. I understand the concern of all investors to have an attractive return and to avoid excessive risk.

FROM CUSTOMER

Dear Mr Tan,

Thank you so much for your reply. I really appreciate to have an exemplary figure like you who is so humble to attend to the public's enquries promptly & with great sincerity.

Travel by train in Germany

I had tickets to watch the World Cup quarter-finals between England and Portugal at Gelsenkirchen stadium in Germany.

My travel agent arranged for me to fly to Dusseldorf and to stay at a hotel near the stadium. As the taxi fare to the hotel is quite expensive (Euro 80), I decided to take the train. It was an interesting experience for me.

I learned the following lessons about the train system:

- You can look at the train schedule
- You have to be at the right platform
- The train will usually arrive on time
- The schedule will state the various stops and the time of arrival at each stop
- You can ask for directions
- If the destination station is deserted, you can call your hotel to get a taxi to fetch you.

Actually, a better arrangement would have been to check into the airport hotel and travel to the stadium and back by train. This would have been easier, fun and less costly.

With this experience, I am now confident of using the train system in Europe. I intend to take a holiday and around Europe by train.

Customer happy with online application

A customer applied for 4 low cost term insurance (iTerm) for members of the family though online applicaiton.

She was delighted with the low premiums and hassle free processing. There is no need for medical examinations. She only has to complete 4 simple health questions.

The average processing time for i-Term is about 3 working days, compared to 6 days for traditional products.

Purchase of life annuities from business center

A customer asked for my advice on wheter to buy an annuity at age 55 or leave it with CPF until age 62.

I referred the customer to our annuity specialist based on our business center.

The customer was delighted with the "prompt and professional support" given by the annuity specialist.

His two sisters turned up later to buy two life annuities and to invest in the growth plan (single premium endowment).

Elderly are active at work

I stayed at a resort hotel outside of Munich to attend the World Cup match.

On my arrival, an elderly German (who looked nearly 70) helped me to carry my luggage to my room. He looked fit and strong.

Over the next few days, I met a few elderly persons working in the hotel. They include the night front desk attendant and the health center attendent. The elderly attendants was quite prominent - always attentive, always helpful, always cheerful.

The hotel also had younger employees dressed in the attractive Bavarian costumes.

Germany has a way of keeping their elderly people active at work.

Customer wants on-the-spot settlement

SUGGESTON FROM CUSTOMER

Dear Mr Tan,

Currently when there is an accident, the vehicles have to go to IDAC to assess the damages. Later, they have to get another assessor to assess the cost of repairs based on the IDAC report.

If both parties have the same insurer (NTUC Income), can the monetary assessment be done by NTUC Income on the spot and an offer be made to the parties involved. This will save admininstration and legal cost and time.

MY REPLY

Dear

We have a practice to offer monetary compensation on the spot, but it has to be done at our office. Previously, we operated this service at various centers, but the demand was quite low.

I will ask my claim service manager to send our practice note to you on this matter.

Please be more understanding

A customer was unhappy with some mix-up in his requests to upgrade to the enhanced Incomeshield plan.

He originally wanted to upgrade, but later changed his mind. During this time, our collegues failed to act on his intention correctly. This made him very angry.

He sent a strong e-mail to me. I gave him this reply:

Dear

I will ask my service quality manager to call you and find out what your intentions are.

During this period, all my colleagues are working under great stress. I wish to ask you to be more understanding and patient. Please do not use strong language unnecesarily. My colleagues also have their feelings.

I hope that we can sort this matter out to your satisfaction.

Global bond fund earns average of 4% return

EDITED



Our Global Bond fund earned about 4% return, after conversion into Singapore $, as follows:

            Global  
Yield(YTM)   Bond   
 
2003         3.60%  
2004         3.47%  
2005         4.03%  
2006 (6m)    4.01%  

The average yield to maturity of the investments on the fund is 3.99%.

Investors who wish to have a more stable modest return can consider the Global Bond fund.

Tips on choosing your investment

QUESTION
I am afraid to invest now, as the market may fall further and I make a loss. What is your advice?

REPLY
When the market falls, you do not really make a loss, if you are a long term investor. The market will recover within a few weeks or months. You never know when the market will turn around, and if it does, you will miss the opportunity.

It is better to invest when the market is low, as you will get a better return.

QUESTION
Is it better to take a guaranteed return, even if it is lower?

REPLY
If you want a guaranteed return, you will get 2% from a bank deposit or 3% from government bonds. Your return is locked up for the duration of the deposit or bond. If you wish to sell the bond prematurely, when interest rate increases, you will have to take a capital loss.

For a long term investor, it is better to invest in equities (which gives a higher return), and choose the right time to realise your investments.

Bank wealth planner provide misleading information

FROM CUSTOMER

Dear Tan,

Other bank's wealth planner told me that NTUC's mortality charges and insurance charges are higher as NTUC faced with more claims from policyholders than the bank. May I enquire on this point ?

When I buy a unit, what is the % of selling price from the purchased price of the unit bought in order to cover all costs ( distribution, fund charge, expenses, etc) to reach breakeven?

MY REPLY

Dear

I will ask our specialist to provide the answers to you.

The bank's wealth planner mislead you. We do not have any mortality charge at all.
If you wish to have any life insurance cover, you buy a separate rider at a flat premium rate. Many people find it to be more transparent.

Delay in approval of Enhanced Incomeshield

FROM CUSTOMER

Dear Mr Tan,

We visited your NTUC Income Business Centre in both Brah Basah on 2 June and Jurong East branch on 28 June.

Your staff who attended to us are to be congratulated of doing a great job. They attended and explained to us very efficiently and clearly on our request to convert our current Medishield plan to the Enhanced Incomeshield. Both of us are above 55 years old.

However, I was extremely concerned being told by your staff that in both cases, they would take at least two months to respond to our application. They informed us there are limited resources in your underwriting department. We certainly appreciate you would look into this and speed up the process.

MY REPLY

Thank you for our feedback. I agree with you that the two months' delay is not acceptable. This is due to a heavy overload of work. We expect to clear the backlog within the next few months.

Fly back to Singapore after watching World Cup

I took a economy flight on SIA to Singapore, after watching the World Cup in Germany. The steward recognised and greeted me. He said that his insurance policies are with NTUC Income.

The supervisor came later to introduce himself and said, "Mr Tan, I expected you to be in the first class. How are you enjoying your flight?".

I gave him a smile. I usually fly economy class. I am not prepared to pay 6 times to fly first class. All our managers fly economy class as well.

We keep our expenses low, so that our customers can pay lower premium. They also enjoy a better return on their savings with us.

I introduced Logic9 (aka Sudoku) to the passenger sitting next to me. She is a retired teacher from Munich, Germany. She is travelling in a group tour to Singapore and Bali.

She did not know about the puzzle before. I showed her how to play the puzzle. She became hooked on it. I presented our Logic9 pocketbook to her. She will probably remember me for a long time.

It is so easy to get somone hooked on Logic9. No wonder, it is so popular around the world.

Village life in Bavaria, Germany

I asked the tour guide. What is a village?

Here is the interesting answer. In a village, there is always a church. The people of Bavaria are religious, mostly Catholics. Sunday is for the church and for rest. No business is done on Sunday.

The village has an inn. It is a place for people to go and drink beer, socialise or to have food. It also has accommodation for travellers.

Quite likely, there is a primary school for the first four years of education. When the students are older, they can go to a secondary school in a larger village nearby.

There is a May pole in the road leading to the village. It shows the shops and trades available in the village, eg baker, butcher, doctor, carpenter, etc. It serves like a "yellow page" directory for the village.

One day of the week is set aside for market day.

The village has many assocaitions, eg a sports association, a fire association, and many others. These associations organise many activities for the villagers to meet regularly. Most young people join the fire assocation to learn about how to put out fire. It is a way to keep them occupied, so they do not get bored and cause trouble.

The social life is interesting in the village. Every one knows about every other person in the village.

FIFA World Cup Semi-Finals (France v Portugal)

I attended the FIFA World Cup semi-final match between France and Portugal at the stadium in Munich.

It is an impressive stadium. It has 65,000 comforable seats. All the seats are covered. Only the field is open to the weather.

The stadium has several hospitality lounges for corporate guests. I was fortunate to be invited by my host.

The game was exciting all the way, down to the last minute. Portugal had many chances, but they failed to convert into goals. It was disappointing for their supporters and their coach.

France played well. They were a strong team, with robust players. They deserve to win.

The stadium was fully sold. I estimated that 75% of the stadium were French supporters, by looking at the colors of their clothings and the volume of their cheers. Portugal had 25% supporters.

The stadium is beautiful from the outside. It has an impressive external "coat". The stadium has three sets of lights - white, blue, red. If there is an international game, the stadium will be lighted "white". There are two football teams in Munich - the Bayern and the 1816 (?). The other colors of the stadium indicate which team is playing.

My host said that the admission ticket to watch a football match is between Euro 30 to 60. It is quite high, compared to Singapore prices.

I now look forward to the Grand Finals between France and Italy. Much earlier, many people expected the match to be between Germany and Brazil. So did I. This is football. The ball is round. Anything can happen.

Global stockmarkets are recovering

I track the global stock market indices against a 5 day moving average and the 50 day moving average. If the current index is above the moving average, it suggest that the market is getting stronger. If it is below the average, the market is still weak.

Here are the findings for the London, Japan, Singapore and New York and Technology shares as at 3 July 2006

- all of the markets are higher than the 5 day moving average by 1% or 2%, ie the markets are recovering well

- the US and UK shares at the 50 day moving average, ie these markets are now neutral

- the Japan, Singapore and Techology shares are about 2% below the 50 day moving average, ie the markets have still not reached the neutral point.

My general conclusion: most of the markets are recovering well.;

Invest in specialised funds?

QUESTION:

Dear Mr Tan,

Would you reccommend the following funds:-

           Japan   Tech
Average    2.70%  -12.00%
YTD 2006  -4.20%   -6.40%

Seems to have produced negative results?

REPLY:

For a long term investor, I recommend the Combined Growth Fund.

The specialised funds (ie Technology or Japan) requires someone who is more knowledgeable about the market. As you are not familiar, I sugget that you should invest in the Combined Growth Fund.

Tan Kin Lian
CEO, NTUC Income

Global stockmarkets are now recovering

The global stockmarkets has been recovering during the past two weeks.

As an example, the Japanese market (as reflected by the Nikkei index) fell from a peak of 17,500 two months ago, to a low of 14,300 (about 18%) and has now recoverd to 15,700 (up 10% from its low).

The other stockmarkets displayed a similar pattern, but not to the same extent as reflected in Japan.

The Combined Growth Fund from NTUC Income reflect a smaller degree of fluctuation, as it is 30% invested in bonds. At the lowest point, the drop was 8%. It has since partially recovered.

For a long term investor, it is time to make an investment when the price is still low.

Will NTUC Income close down its small funds?

QUESTION:

Dear Mr Tan,

I have bought 2 different unit trusts where the bank send me statement that the funds, one has been transferred to another management. Another will be closed by certain date where the price is 40% less the initial launch price. So I am forced to acccept a loss.

Will this happen to NTUC units ?

REPLY

NTUC Income acts fairly in the interest of our customers. We do not intend to close any of our small funds. If we do, we will give generous terms to the customers.

3 tips for the young - worth at least $20,000

Here are 3 valuable tips.

1. Invest in the right investment (earn 6% instead of 2%), and earn $146,000 more
2. Invest in a low cost fund (charge 1% instead of 2% p.a.) and earn $48,000 more.
3. Invest in a low cost ILP (7 months instead of 19 months) and earn $20,000 more.

* assume you save and invest $300 a month over 30 years

Attend my educational seminar, 6877 3366.

Or visit the website, www.income.coop. A talking powerpoint (20 mins) will be ready by 7 June.

Why do travel website only recommend 1 travel insurance provider?

There are several websites that gives you competitive quotes for airfare and hotels. But they only recommend one travel insurance product. Do you know why?

The answer is simple. For Travel Insurance, there is no standard commission. The website owner is likely to promote the travel insurance that pays the highest commission to them. Do not buy their travel insurance.

NTUC Income provides low-cost, hassle free Travel Insurance. We pay very low commission, and pass the cost savings to our customers by charging low premium rates.

So be a wise consumer. Book your Travel Insurance directly with NTUC Income. Call 6332 3456.

Do not give $20,000 away!

If you invest in most investment-linked plan in the market, it can take away 19 months of your savings to pay agent's commission and other expenses.

If you invest with NTUC Income, we will take away only 7 months. Compared to competitor's ILP plan, we invest an additional 12 months of your savings for your benefit.

If you save $300 a month, the additional 12 months of your savings, invested to earn an average of 6% per annum (not guaranteed) for 30 years can amount to $20,000. We can give you $20,000 more!

Lesson: Invest in an ILP plan that takes away only 7 months of your savings. Avoid a ILP plan that take away 19 months!

Earn 3% and more on your un-fixed deposits

Do you want to earn 3% or more on your un-fixed deposits?

Our Flexi-Cash operates like a deposit in a bank. The current interest rate is about 3%. It will change with the money market. Right now, interest rate is increasing, so the interest rate on your deposit will also move up.

It is an un-fixed deposit becuase you can withdraw it at any time. There is no penalty. You are not locked in for 1 year or longer.

Your money is invested in our Money Market fund, which is invested mainly in the inter bank market (ie lent to other banks) or A rated money market instruments. The cost of investing is only 0.1% (yes, one tenth of 1%), during the promotion period.

Invest in the un-fixed deposit. It pays more, and gives full flexibility for your cash.

Go to www.income.coop and read our FAQ. Or call 6788 1111.

Customer choose to buy insurance directly

Last week, a couple walked into our Business Center, after finding the location of the center from our website.

They bought two education policies for their children for $200,000 each. They paid an annual premium of $26,000.

My manager thanked them and asked why they prefer directly with the Business Center and not through a personal adviser?

They had a few insurance advisers who served them previously. They prefered to buy directly as it is straight forward and more efficient.

Wow. This can be a new way of buying insurance.

My World Cup Experience

I visited Germany to watch the World Cup quarter finals between England and Portugal on July 1. The game is played in Gelsenkirchen Stadium. Getting there is an experience.

My wife and I took the Singapore Airlines flight from Singapore to Frankfurt and change to a Lufthansa flight to Dusseldorf. We had some trouble in changing from the international terminal to the domestic terminal in Frankfurt. There were many flights handled at the airport. We were not familiar with the layout of the airport. We could not find any information helpdesk.

The workers at the airport, including tHe security workers, were very friendly and helpful. We only need to know Guten Tag (good day) and the rest of the conversation is handled in English. But, the workers had also to rely on the information screen, which may not display the information that is needed. And they are also very busy.

Getting from Dusseldorf to my hotel in Gladback West is another interesting experience. The most convenient way is to pay EUR 50 for a taxi ride. But my World Cup ticket allows me to use the public transport for free to the train station in Gladback West.

My travel agent gave the instruction to take the train from Dusseldorf Airport to Essen and change to another train to Gladback West. I should take 1 hour. They warned me that the change of trains is not so easy.

At the airport, I decided to take the cheaper choice and experience the German train system.

My first difficulty was to locate the information counter at Dusseldorf Airport. I could not find it. I followed the sign to the train station. I ask a passenger for information to get the train to Essen main station. She was not sure, but suggested that I should go to Dusseldorf main station and take the train from there.

This was a mistake. It took me 90 minutes to get to the main station, to find the right train platform and wait for the train to take me to Essen. The train from Dusseldorf train station had to return to Dusseldorf airport on its way to Essen. So, I wasted 1 hour travelling the wrong direction and back. From Essen, it took another 45 minutes to get to Gladback West.

After arriving in Gladback station, I had another challenge. There was no taxis available. There was no worker in the station. It was deserted.

Outside, I found another traveller who managed to telephone a taxi. He called his hotel, which despatched a taxi to pick him. I never knew that this is how one travels in a big country.

I did the same, and soon arrived in my hotel.

The total journey took more than 2 hours. We had to carry heavy luggage as well. But, the experience was worth it. I learned about the German train system and the friendliness of the people.

In the afternoon, I book from a taxi from the hotel to the stadium. It cost EUR 18 for a short journey. I asked the taxi driver for his telephone number, in case I need to call him back after the match.

The match between England and Portugal was exciting, but not unusual. A few billions fans could watch the live game over the television screens around the world.

The English supporters were fantastic. I met many of them on the train from Dusseldorf. One told me that 150,000 England supporters will be in and outside of the stadium. Those without tickets were willing to pay 1,000 EUR to get a ticket to enter the stadium.

They came in the colourful costumes. It was like a big carnival, with people having a great time. Many were singing and enjoying their beer or coke. Some came with spouses and children.

The stadium was amazing. It had a covered roof, with a confortable seat for everyone. All the seats are numbered. Everyone can watch a large TV screen located above the center of the field and facing the fans on all the 4 sides.

The stadium was full. All the 54,000 tickets were sold out.

The 2 hours of the game was an interesting experience. The English fans were most passionate. Throughout the game, they were singing the national anthem "God Save the Queen" and other familiar songs. At numerous points in the game, they shouted loudly "Send her victories, happy and glorious". This is accompanied by raising both arms in a warm gesture, accompanied by several tens thousand fans.

I sent photos of the small Singapore delegation at the stadium through MMS live from the stadium to my colleagues in Singapore. I added the remark, "Live from the World Cup stadium. 150,000 England supporters. 5,000 plus 1 Portugal supporters. "

I was confident that, in spite of the odds, the Portugal team will win. They work better and harder as a team. I had watched a few of their earlier games on TV, and was impressed by their playing style.

There was no score for 90 minutes and 30 minutes of extra time. Portugal attacked the England goal more often, but the England defence was quite strong.

Portugal won the game on penalty kicks. I give credit to the Portugal goalkeeper for a few fine saves.

The only sad part of the game was the disappointment of the England supporters. They gave their very best in passion, time and money. They came in full support of the national team. Even in defeat, they behaved graciously. A big salute to them.

I met a few Portugal supporters and congratulate their country. They are outnumbered by the England supporters, but it did not deter them.

Wow. It was a great experience. And Portugal won, in spite of being the underdogs. And the England fans won my admiration for their passion and spirit.

Tan Kin Lian
From Germany

Flexi Cash have very low risk

QUESTION:

In terms of risk and reward, how does FlexiCash compared with deposit placed with a credit cooperative?

When will the Flexi-Cash promotion ends? Does Income Centre open on Saturday to accept such transactions?


REPLY

Flexi Cash is invested in the money market. Most of the money are lent to banks, so they are quite safe. Some of the money is invested in short term bonds, which are well rated. The risk of loss is very low.

As the money market is invested in short term instruments, there is also very neglible risk of loss due to a sharp increase in interest rate (which may happen to long dated bonds).

The promotion should be available for a few weeks. So, you do not need to hurry.

Income Center is open on Saturday morning.

Learn about Structured Products

Many banks are distributing structured products. They are advertised aggressively. These products look attractive. But they are difficult to understand.

Learn the basics about structured products, before you invest in them. You will find the lesson enjoyable. It can be worth a lot of money to you.

www.knowyourinsurance.com.sg

Customer looks for tutor in economics

REQUEST FROM CUSTOMER

I'm seeking an economics tutor (female preferred) for my daughter who is now in her first year at Singapore Polytechnic doing business admininistration. I'd greatly appreciate your kind referal to the qualified tutors.

I PASSED TO MY MANAGER IN CHARGE OF OUR HOME SERVICE PORTAL. HE RESPONDED TO THE CUSTOMER. CUSTOMER REPLIED:

Thank you, Mr Wong. I greatly appreciate your kind assistance and look forward to hearing from you.

Many thanks to you too, Mr. Tan for making the referal to Mr. Wong. Please accept my appreciation for your effort on my behalf even when you are at home. Thank you for your help in this matter.

LATER, I RECEIVED THIS E-MAIL FROM THE CUSTOMER

Thank you. I have already had two tutors who responded positively. They look promising and I should be making a decision on the selection soon. Thanks again for your assistance and the efforts of your colleagues from Income particularly Mary and Mr. Wong. Kindly extend my appreciation to them on my behalf.

Do I get a discount from the Business Center?

QUESTION:

I would like to buy an endowment policy (maybe single premium type) and heard that there will be a discount if I were to buy direct? I wonder how attractive is it? What is the price if they went through an advisor instead. If there is not much difference, then maybe it's better to have the convenience of an advisor to monitor my policy?

REPLY:

For most products that are under promotion, you pay the same premium in the business center and to the insurance adviser.

For non-promotion products, if you come to the business center, you may get a very modest incentive to cover your travelling expenses and time. It depends on the product that you buy. The consultant will tell you about it.

Most people come to the business center for other reason - i.e. they like to get frank advice and not feel the pressure of having to buy a product due to the time spent by the adviser.

Nice words from a customer

Dear Mr. Tan,

My family have policies with Income and other insurance companies. We found that bonuses issued by Income was the most generous. In term of payment of premium and other matters, Income is the least pressurised. We are therefore fond of Income and wish that it is ever growing and consolidating.

In my view, banks that are charging 24% per annum are legalised loan shark. They have forgotten their social responsibility and what is reciprocating. Whereas Income had shown its sympathy and gave help during the difficult periods.

I wish that when you step down, Income will continue to administer by a good leader. Picking a right person is not an easy task and need time. I wish that you can start taking action now.

Customer invest $130,000 in Flexi-Cash

Our consultant, who is a specialist in ILP, spoke to a customer and convinced him to come to Business Center. The customer presented a cheque for $130,000 to invest in our Flexi Cash. He intends to convert some of the cash into the investment fund at a later date.

Correction in global stockmarkets

VIEW FROM CHIEF INVESTMENT OFFICER, NTUC INCOME

Global stock markets corrected over the past two months due to concern for inflation and uncertainty in interest rates in the USA. The correction was more severe among the Asian markets than the USA and European markets.

Economic growth and corporate earnings are expected to slow in 2006 and 2007. There are concerns that higher interest rates could result in further deterioration in growth over the next two years.

We think the markets are fairly valued now after the correction. Expected growth of the global economies and company earnings is generally reasonable, and markets are more attractive now. It is premature to conclude that growth will slow significantly.

Investors have over-reacted to the concerns for inflation. The correction was exaggerated by selling and unwinding of leverage positions by hedge funds.

Customer buys 5 policies after attending educational talk

A customer attended our educational talk on "Financial Tips for the Young". He came with his wife and children.

He decided to buy 4 Ideal plans (regular premium investment-linked plan) for his children. His wife also took up an Ideal plan. They were bought through his insurance adviser.

He is aware that these are investment plans, which are subject to investment risk. He became confident that "risk is an advantage" after attending the talk. Previously, he only had a motor insurance policy with us.

The adviser said that the customer:

- had attended several investment talks previously conducted by other speakers.
- was impressed and convinced by our CEO's explanation on ILPs
- liked the large fund size of %3.8 billions, invested in 900 counters.
- liked the performance of our Combined Fund since its inception

He is now considering to increase his insurance coverage, by level term plus a decreasing term rider.

We provide warranty on replacement of windscreen

1. From customer

I have been insuring all my cars with INCOME since 1980s.

Last year, I brought my present car Toyota Altis and have no alternative to insure under AIG for one year till Apr 2006. I switched back to INCOME immediately the expiry.

My car windscreen was hit by a small stone with a small cracks and hair lines along TPE recently.

INCOME does not allow me to replace it at Toyota Workshop which may be too
expensive.

I have no objection for my windscreen to be replaced at your INCOME workshop
which could be cheaper ...

But my fear is, if after the 6-month warranty given by your authorized work, will INCOME continue to undertake the rest of windscreen warranty till the expiry of the Distributor 3 years warranty period for any water leakage.

2. My reply

Yes, we will take over the 3 year warranty on the windscreen. If you have any problem on this issue, you can bring it to the attention of my claim service manager. Thank you for switching over to NTUC Income.

3. Reply from customer

Very great to have your assurance.

Just to keep you update that I have replaced my windscreen at Tuffi @ Sin Ming this morning. They provided me with excellent service.

That is unreasonable for Toyota Motors to charge more than $900 for a change of windscreen. I will also update the members of the Toyota Club.

FAQ: Flexi-Link

Triple your savings, or more!
Earn up to $26,000 more, compared to similar plans in the market

1. Purpose

This plan is for a policyholder to invest a lump sum using the savings in the Central Provident Fund, Supplementary Retirement Scheme, or in a bank account or fixed deposit. The policyholder can also top up the investments at any time.

The attractive features are:

- 100% of the lump sum is invested
- the lump sum is invested in a large, well diversified fund, to earn an attractive return
- the charges are among the lowest in the market
- sum assured of 125% of the savings, or value of investments (if higher)

2. What is the expected return?

The savings can be invested in one of several funds operated by NTUC Income.

For example, a popular fund is the Combined Growth Fund. It comprises of $3,800 million of investments, is invested in 900 quality investments, and is managed by 9 top fund managers globally. The benchmark return of the fund during the past ten years is 6.5% per annum. The actual return during the first 3 years (2003 to 2005) was an average of 16% per annum.

Note:
- The future return is not guaranteed
- Past performance is not indicative of future return.

3. How much must I invest?

The initial investment must be at least $5,000. You can invest more, if you wish.

The invested sum is used to buy units of the investment fund at its prevailing price. The value of the units are expected to increase with the underlying value of the investments in the fund.

4. How much can I expect to get at the maturity date?

If you save $50,000, the projected amount (not guaranteed) at the end of 20 years is:

Assumed net return   5% p.a    7% p.a.     9% p.a.
Initial investment  $50,000    $50,000    $50,000
Gain (estimated)    $78,000   $136,000   $220,000     
Projected amount   $128,000   $186,000   $270,000

Assumed net return - after deducting the fund management fee (for illustration only)
Gain (estimated) - after deducting spread, policy fee and advisory fee

The projected amount is much higher than the return from traditional endowment or educational plans offered by life insurance companies.

If the policyholder (male at 30) pay a traditional endowment policy for the same premium, the guaranteed sum assured is $77,000 and the projected amount at maturity (not guaranteed) is $113,000.

5. Is there any life insurance cover?

In the event of death of the parent before age 60, the policy pays a sum assured of 125% of the invested sum (less withdrawals) or the value of the investments, whichever is higher. This cover is provided free of charge.

If you need additional cover, we recommend a decreating term assurance. If you insure for $50,000 over 20 years, the monthly premium is only $x,xx at entry age 30 and $x.x at 40.

6. Can I top up my investments?

You can top up your investments at any time, by making additional investments of at least $1,000.

7. Can I make withdrawal for emergency?

You can withdraw any amount from this plan, subject to a minimum of $500. There is no charge or penalty for the withdrawal. When you make a withdrawal, a certain number of units will be cancelled to provide this amount.

8. Is there a minimum investment period?

There is no minimum saving period. You can continue the savings plan for as long as you wish.

9. What are the charges?

The charges are among the lowest in the market:

- 3.5% spread between offer and bid price
- fund management fee of about 1% per annum
- initial fee of $100 when you set up the plan
- annual fee of $50 per policy (currently, waived for an investment above $15,000)

These modest charges are more than offset by the higher return that is likely to be earned by the investment fund.

They are much lower than similar plans available in the market. You can get a much better return from this plan.

10. Do all investment funds charge similar annual fee?

Most funds in the market charge an annual fee of 1.5% or 2% of the value of the investment. The combined fund from NTUC Income charge a lower fee of about 1% per annum.

A difference of 1% in annual fee, on an initial investment of $50,000, amounts to $26,000 at the end of 20 years (assuming an average return of 6% per annum). You can get $26,000 more, by investing in the combined fund.

11. Do all plans have the same spread between the bid and offer price?

Most investment linked plans in the market have a spread of 5%. The flexi-link plan from NTUC Income have have a lower spread of 3.5%. The difference of 1.5% on a lump sum of $50,000 mean that you get an additional $750 invested for you.

During our promotion, if you invest a larger amount, you can get bonus units credited to your investment. This gives more investment units to you. The bonus can be as high as 2%. This reduces the spread to as low as 1.5%.

12. Interested?

Call 6877 1111
Visit our Business Center at Bras Basah Road or Tampines Point.
Or see your insurance adviser.

End of FAQ

FAQ: Ideal Plan

Triple your savings, or more!
Earn up to $32,000 more, compared to similar plans in the market

1. Purpose

This plan is for a young person to save for future needs. The attractive features are:

- 100% of savings invested (except for advisory fee of 15% of premium for first 3 years)
- savings is invested in a large, well diversified fund, to earn an attractive return
- the charges are among the lowest in the market
- sum assured of 5 years of savings, or value of investments (if higher)

2. What is the expected return?

The savings can be invested in one of several funds operated by NTUC Income.

For example, a popular fund is the Combined Growth Fund. It comprises of $3,800 million of investments, is invested in 900 quality investments, and is managed by 9 top fund managers globally. The benchmark return of the fund during the past ten years is 6.5% per annum. The actual return during the first 3 years (2003 to 2005) was an average of 16% per annum.

Note:
- The future return is not guaranteed
- Past performance is not indicative of future return.

3. How much must I save?

You have to save a minimum of $100 a month. You can save more, if you wish.

The savings is used to buy units of the investment fund at its prevailing price. The value of the units are expected to increase with the underlying value of the investments in the fund.

4. How much can I expect to get at the maturity date?

If you save $200 a month, the projected amount (not guaranteed) at the end of 30 years is:

Assumed net return       5% p.a    7% p.a.     9% p.a.
Total savings           $72,000    $72,000     $72,000  
Gain (estimated)        $77,900    $141,800   $237,700
Projected amount       $149,900    $213,800   $309,700 

Assumed net return - after deducting management fee: for illustration only
Gain (estimated) - after deducting spread, policy fee and advisory fee

The projected amount is much higher than the return from traditional endowment or educational plans offered by life insurance companies.

If the policyholder (male at 30) pay a traditional endowment policy for the same premium, the guaranteed sum assured is $xxx,000 and the projected amount at maturity (not guaratneed) is $xxx,000.

5. Is there any life insurance cover?

In the event of death of the parent before age 60, the policy pays a sum assured of 5 years of savings or the value of the investments, whichever is higher. This cover is provided free of charge.

If you need additional cover, we recommend a decreasing term insurance rider. If you insure for $72,000 decreasing over 30 years, the monthly premium is only $xx at entry age 30 and $xx at 35.

6. Can I change my savings?

You have the following options:

- to increase or reduce your regular savings
- to stop your savings temporarily
- to top up your savings

7. Can I make withdrawal for emergency?

You can withdraw any amount from this plan, subject to a minimum of $500. There is no charge or penalty for the withdrawal. When you make a withdrawal, a certain number of units will be cancelled to provide this amount.

8. Is there a minimum saving period?

There is no minimum saving period. You can continue the savings plan for as long as you wish.

However, if you terminate the plan during the first 3 years, the remaing installment of the advisory fee will be deducted from the cash value.

9. What are the charges?

The charges are among the lowest in the market:

- 3.5% spread between offer and bid price
- fund management fee of about 1% on value of investment
- annual fee of $50 per policy
- advisory fee of 15% of premium for first 3 years

These modest charges are more than offset by the higher return that is likely to be earned by the investment f und.

They are much lower than similar plans available in the market. You can get a much better return from this plan.

10. Do all investment funds charge similar annual fee?

Most funds in the market charge an annual fee of 1.5% or 2% of the value of the investment. The combined fund from NTUC Income charge a lower fee of about 1% per annum.

A difference of 1% in annual fee, on a monthly savings of $200, amounts to $32,000 at the end of 30 years (assuming an average return of 6% per annum). You can get $32,000 more, by investing in the combined fund.

11. Do all investment linked plans have similar upfront fee?

Most investment linked plans in the market have a upfront fee of about 19 months of premium. The ideal plan from NTUC Income have have a lower fee of about 7 months of premium (represented by the advisory fee and other charges).

The difference of 12 months, on a monthly saving of $200, amount to $14,000 at the end of 30 years (assuming an average return of 6% per annum). You can get $14,000 more, by investing through our ideal plan.

12. Interested?

Call 6788 1111
Visit our Business Center at Bras Basah Road or Tampines Point.
Or see your insurance adviser.

End of FAQ

Ang Mo Kio Auto-Point

I visited Ang Mo Kio Auto-Point last Friday. Several workshops in this center from a business group to tender for the repair of motor cars for our customers.

I was very impressed with the following:

- the participating workshops were able to work together in cooperation
- they focused on quality assurance and customer service
- they submit competitive tenders and win about 5 repairs a day
- they meet our standard of repair quality and customer satisfaction
- they were proud to be a quality workshop under NTUC Income

I am glad that our tender system is able to help these small workshops (which are owned by small proprietors) to get a steady source of business. They can make an honest profit and are able to provide quality repair.

You can take a loan on our investment-linked plan

NTUC Income allows a loan to be taken against our ILP plan. Other insurers do not allow this option. They insist that the policyholder should surrender the units, if they wish to withdraw cash.

Why?

Perhaps, the other insurer wish the policyholder to surrender, and to re-invest at a later date. The policyholder has to pay the spread of 5% again. It will cost 5% to the policyholder

NTUC Income's practice is more favourable to the policyholder. Here are the terms of our loan on ILP policy:

1. We allow a loan of up to 50% of the cash value.

2. We will ask the policyholder to make partial payment, if the loan reaches 70% of the cash value, so that there is always a 30% margin. The repayment can be done by partial surrender of the units.

3. Interest rate is at the same rate as for traditional policy, ie 5.5% per annum.

Practice to be a Logic9 champion

NTUC Income will launch this interesting game in a special website by early July.

You can practice at our website to be a champion in Logic9 (also known as Sudoku). This game is a craze around the world.

This game is good for children to practice their mathemathics and logic, and also for older folks to keep their mind alert!

You can register a personal account. You can practice through 5 levels, from "very easy" to "complex". You will get hints and tips to guide you.

When you can complete a complex puzzle within the time limit, you will become a champion. You will get a certificate, and be invited to participate in national competition!

We may even organise international competitions!

Tentative website: www.logic9.com.sg

Stolen Car was recovered through tracking device

A policyholder installed a car tracking device in his new Toyota Wish car under a 4-year installment scheme promoted by NTUC Income.

On 25 June, he reported that his car was stolen in Johore Bahru.

Within 5 minutes, the car tracking service was able to pinpoint the car location at a specific place in Skudai, Johor. The Skudai police was alerted. They immediately dispatched several policemen to the location and recovered the car. One car thief was also caught.

On arrival, the owner found that the car thieves have disabled the usual security devices, but they were not able to locate the tracker which was installed at a hidden place in the car.

The owner enjoyed a significant discount in his insurance premium, by installing the tracking device. He also had the satisfaction of seeing the recovery of his car. He avoids the hassle of making a theft claim, which can take a few weeks to settle.

Align interest of fund manager and investors

Some fund managers claim that they align their interest with the investors by taking a share of the performance of the fund. This gives them the incentive to work hard and make the fund perform well.

This observation applies mainly to funds that have high performance fees, such as REITs, business trusts, hedge funds, quant funds and private equity funds. It also applies to companies that grant stock options with striking prices that are equal or just slightly above the current market price.

Do not be "taken in" by this statement.

For a fund manager to make this claim, they should be prepared to take a basic fee that is much lower than the market.

For example, the manager of a private equity fund usually charge an annual fee of 2% to 3% of the assets under management.

If the fund manager is "aligned", the manager should be prepared to charge a lower basic fee (e.g. 1%) and take a share of the gain in excess a hurdle rate.

For example, the performance fee can be 20% of the earnings of the fund, in excess of the hurdle rate of 6%. In this case, if the fund earns 10%, the fund manager will get 20% of 4%, ie an additonal 0.8%, as performance fee. This is additional to the basic fee of 1%.

If the fund earns less than the hurdle rate, the fund manager takes only the basic fee, which is lower than the market. In this way, the fund manager is "aligned".

If the fund manager wants to earn the usual fee and a large perfomance fee, the fund manager is "greedy" and not "aligned".

Send an e-mail to me

If you have any specific question that need my answer, please send an e-mail directly to me at tankl@income.coop. I find it difficult to reply to comments that are posted in my blog.

Letter to annuitants

24 June 2006

Editor
Straits Times Online Forum

I refer to the letter from Heng Cho Choon entitled "NTUC Income's letter to policy-holders sounds threatening. It smacks of insensitivity" (June 24, 2006).

I have taken note of Heng's views. We will consider his suggestion to improve the wording of the letter.

Under a life annuity, the payment is made only to the annuitant during his or her lifetime. We are required to verify that the annuitant is still alive, before making the payment.

Over the past years, we have considered several other options of verifying this fact, including the options suggested by Mr Heng. Each of these option have drawbacks and cannot be relied upon.

In past years, we did use different wordings, such as the kind suggested by Mr Heng. They did not appear to have the impact, as many annuitants failed to reply to us. This caused a lot of difficulty and unnecessary expense in the follow up.

If we continue to pay to annuitants who have died, the additional payment will reduce the bonus payable to the surviving annuitants. This will not be fair to them. We have a duty to act diligently.

NTUC Income has 30,000 annuitants that have to be paid each month. We hold a 65 percent share of all life annutiies sold in Singapore. This number is expected to increase significantly in the future, as more people choose to invest in this type of plan, as it gives an attractive return and is more suitable to the older folks.

We are sensitive to the feelings of our customers. We want to be as polite as possible, but we still have to bring the message across.

Tan Kin Lian
Chief Executive Officer
NTUC Income

The person that I admire most

CONTRIBUTION TO CEO TALKS, LIANHE ZAOBAO

I admire Bill Gates, the founder of Microsoft.

After making many billions of dollars, he and his wife decided to donate most of their wealth to charity. They set up a foundation.

The foundation is generous in giving money for worthy causes, to improve the health and lives of millions of poor people around the world.

They decide to distribute their wealth during their lifetime, and not after they have passed away.

They take another step, that is not widely known. They insist that the donee organisations provide an external audit on how their donation is being spent. This ensures that the money is used mainly to benefit the beneficiaries and are not being wasted away.

Wow. Isn't it great?

Do not send policy loan statement?

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.

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.

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

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.

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.

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:

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.

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?

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

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:

              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.

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!

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.

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.

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?

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.

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.

Stockmarkets will recover

Compared to the peak a few weeks ago, the stockmarkets have fallen by 9% to 17% to the lows.

                                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:

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).

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?"

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!"

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.

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.

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.

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.

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.

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.

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?

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