We invite agents from other companies to move to NTUC Income. You will find it easier to sell our products. You will also get leads from the office to sell to our existing policyholders. Some of these sales can be done over the telephone.
No need to make cold calls. No need to visit them at their homes. No need to propect for new customers.
Just learn how to convert the leads.
Interested? Register at www.mailbox.coop/0001
Wednesday, August 23, 2006
Tuesday, August 22, 2006
I hope that more Singaporeans visit your blog
Hi
I think you have done a great job writing and sharing your views and ideas on financial planning and local issues. More CEOs from GLCs should do likewise.
I may not agree with all your views but I still feel it's great work done and hope more Singaporeans visit your blog
HL
I think you have done a great job writing and sharing your views and ideas on financial planning and local issues. More CEOs from GLCs should do likewise.
I may not agree with all your views but I still feel it's great work done and hope more Singaporeans visit your blog
HL
Monday, August 21, 2006
Practical system to control hot and cold water
I stayed at the Interncontinental hotel in Wellington, New Zealand.
They have a good system to control the water in the bath tub and shower. They use two separate knobs to control the the hot and cold water to the bath tap, and another two knobs to control the water to the shower. It is so easy to use.
In many other hotels, it is quite a hassle to figure out how the water system works. Often, I turn on the wrong knobs and obtained the wrong temperature or got the water flowing out of the wrong tap.
The other features in the hotel room are also well designed and friendly to the hotel guests.
I have stayed in many other hotels, including those managed by international chains, that are not friendly to the hotel guest.
Congratulations to the Intercontinental, Wellington. I shall check if this is due to the hotel chain or the New Zealand architect!
They have a good system to control the water in the bath tub and shower. They use two separate knobs to control the the hot and cold water to the bath tap, and another two knobs to control the water to the shower. It is so easy to use.
In many other hotels, it is quite a hassle to figure out how the water system works. Often, I turn on the wrong knobs and obtained the wrong temperature or got the water flowing out of the wrong tap.
The other features in the hotel room are also well designed and friendly to the hotel guests.
I have stayed in many other hotels, including those managed by international chains, that are not friendly to the hotel guest.
Congratulations to the Intercontinental, Wellington. I shall check if this is due to the hotel chain or the New Zealand architect!
I give my honest views
Some visitors to my blog are competitor agents or financial advisers. They accuse me of being biased in my views posted in this blog.
They are mistaken.
I give my honest views. I do make a judgement of what facts are fair and relevant. For example, I do not look at small investment funds, because the results are volatile. I consider them to be not suitale for long term financial planning.
Some of the large funds under NTUC Income perform slightly worse than the market. For example, our bond funds. I do not hesitate to show them, and explain why this is the case (if I know the reason).
Generally, the equity funds under NTUC Income perform well during the past three years. They earn 2% to 3% per annum better than most similar funds. I suspect that this is due to our lower charges.
Although the actual difference in charges is only 0.5% or 1%, I think that the other funds may have other charges that are not disclosed. In our case, we do NOT have any additional hidden charges.
I do not rule out that the difference could be due to the better performance of our managers. But, I think that it is mainly due to luck. In some years, certain managers may perform well, but this may reverse in other years. Over a longer period, the performance or good luck will balance out.
The low cost funds are likely to give a better return to the investors. This has been the result of many research done in America over the past decades.
They are mistaken.
I give my honest views. I do make a judgement of what facts are fair and relevant. For example, I do not look at small investment funds, because the results are volatile. I consider them to be not suitale for long term financial planning.
Some of the large funds under NTUC Income perform slightly worse than the market. For example, our bond funds. I do not hesitate to show them, and explain why this is the case (if I know the reason).
Generally, the equity funds under NTUC Income perform well during the past three years. They earn 2% to 3% per annum better than most similar funds. I suspect that this is due to our lower charges.
Although the actual difference in charges is only 0.5% or 1%, I think that the other funds may have other charges that are not disclosed. In our case, we do NOT have any additional hidden charges.
I do not rule out that the difference could be due to the better performance of our managers. But, I think that it is mainly due to luck. In some years, certain managers may perform well, but this may reverse in other years. Over a longer period, the performance or good luck will balance out.
The low cost funds are likely to give a better return to the investors. This has been the result of many research done in America over the past decades.
Saturday, August 19, 2006
Reduced annual charges
NTUC Income is reducing its annual charges for the following funds from 1 July 2006:
The reduced charge mean more return to our investors.
The largest reduction is for our Singapore Equity fund, which is also one
a top performing fund.
New Charges Old Charges
Singapore Equity 0.65% 1.00%
Growth Fund 1.0050% 1.0575%
Balanced Fund 0.9375% 0.9725%
Conservative Fund 0.8700% 0.8875%
The reduced charge mean more return to our investors.
The largest reduction is for our Singapore Equity fund, which is also one
a top performing fund.
Do all investment funds charge similar annual fee?
Do all investment funds charge similar annual fee?
Most funds in the market charge an annual fee of 1.5% to 2%. The Combined Growth Fund from NTUC Income charge a lower fee of about 1%.
Assume you invest $50,000 for 20 years and the fund earns 6% per annum. The difference of 1% in annual fee gives $26,000 more on maturity. You get more by investing in our fund, due to its lower annual fee.
NTUC Income has recently lowered its annual fee for several of its funds, including the Combined Funds and the Singapore Equity fund. So, the difference is higher than quoted above.
Our funds continue to perform better than similar funds in the market.
Most funds in the market charge an annual fee of 1.5% to 2%. The Combined Growth Fund from NTUC Income charge a lower fee of about 1%.
Assume you invest $50,000 for 20 years and the fund earns 6% per annum. The difference of 1% in annual fee gives $26,000 more on maturity. You get more by investing in our fund, due to its lower annual fee.
NTUC Income has recently lowered its annual fee for several of its funds, including the Combined Funds and the Singapore Equity fund. So, the difference is higher than quoted above.
Our funds continue to perform better than similar funds in the market.
Big cases closed at Business Center
The following big cases were closed at our Bras Basah Business Center recently:
$160,000 invested in Flexi-Cash
$96,000 invested in life annuity
$211,000 (5 cases) of Flexi
$70,000 Flexi
$300,000 in life annuity each (X 2 cases)
It seems that more people are willing to come to the business center to make large investments!
Several policyholders have decided to invest in the Flexi Cash to enjoy the lower spread of 0.1% during the promotion period. From 1 September, the spread will be raised to 0.25%.
Flexi Cash earned 0.28% during the past month (ie equivalent to 3.5% for 1 year). It is flexible and is not locked-in for 1 year. The only cost is the upfront spread.
$160,000 invested in Flexi-Cash
$96,000 invested in life annuity
$211,000 (5 cases) of Flexi
$70,000 Flexi
$300,000 in life annuity each (X 2 cases)
It seems that more people are willing to come to the business center to make large investments!
Several policyholders have decided to invest in the Flexi Cash to enjoy the lower spread of 0.1% during the promotion period. From 1 September, the spread will be raised to 0.25%.
Flexi Cash earned 0.28% during the past month (ie equivalent to 3.5% for 1 year). It is flexible and is not locked-in for 1 year. The only cost is the upfront spread.
How to select the right investment fund?
QUESTION
I read your article at your blog (My personal experience in managing my own money).
Please advise me on the basic criteria to selecting investment funds? How different is investing in such funds managed by NTUC as compared to the ones offered by banks or other finanical institutes? If I already have life insurance policies, does it make sense to buy investment-linked policies?
REPLY
Dear
You can find the answers in the following FAQ for single premium and regular premium investments:
http://www.income.coop/insurance/flexilink/faq2.asp
http://www.income.coop/insurance/ideal/faq2.asp
Many people have life insurance policies and is supplemented by investment linked policies. For example, they get their protection through whole life or term insurance policies and make their savings (including CPF savings) in the investment linked policies.
I will ask my colleague to get a product specialist to contact you. You can ask more questions from this specialist.
Tan Kin Lian
CEO, NTUC Income
I read your article at your blog (My personal experience in managing my own money).
Please advise me on the basic criteria to selecting investment funds? How different is investing in such funds managed by NTUC as compared to the ones offered by banks or other finanical institutes? If I already have life insurance policies, does it make sense to buy investment-linked policies?
REPLY
Dear
You can find the answers in the following FAQ for single premium and regular premium investments:
http://www.income.coop/insurance/flexilink/faq2.asp
http://www.income.coop/insurance/ideal/faq2.asp
Many people have life insurance policies and is supplemented by investment linked policies. For example, they get their protection through whole life or term insurance policies and make their savings (including CPF savings) in the investment linked policies.
I will ask my colleague to get a product specialist to contact you. You can ask more questions from this specialist.
Tan Kin Lian
CEO, NTUC Income
Do we employ ex-prisoners?
QUESTION
Hi CEO Mr Tan Kin Lian,
Does NTUC Income employ someone who has been detained in Prison for an offence of not paying their fine. It is not a criminal offence.
REPLY
Dear
We do not rule out any candidate due to past prison record (as they have already paid their penalty).
However, we will only consider them based on their suitability for the job (as there are other candidates available) and also if there is any vacancy.
Tan Kin Lian
CEO
NTUC Income
Hi CEO Mr Tan Kin Lian,
Does NTUC Income employ someone who has been detained in Prison for an offence of not paying their fine. It is not a criminal offence.
REPLY
Dear
We do not rule out any candidate due to past prison record (as they have already paid their penalty).
However, we will only consider them based on their suitability for the job (as there are other candidates available) and also if there is any vacancy.
Tan Kin Lian
CEO
NTUC Income
Reply to Dr Lim Boon Hee in Today Paper
Dr Lim Boon Hee asked, "did NTUC Income bite off more than it can chew"?
The frank answer is "yes". We are suffering from temporary indigestion. But, it is not serious. We hope to be able to recover from it fully by October.
When we tendered for the Medishield Plus scheme, we wanted to offer to the 300,000 members a better package that gives about higher coverage at a reduced premium. Our offer was the most attractive. We were given the entire portfolio of 300,000 members.
We made the best estimate of the likely work load based on our experience with 500,000 Incomeshield policyholders that are insured with us, and with the data provided by the Ministry of Health.
The actual volume of claims was higher than expected. This is due to the difference in the way of handling the claims through the integrated system. We have to change the computer system to deal with the higher situation and new way of processing. It takes time to design and implement the changes. There were other integation issues as well.
The matter was aggravated in June, when we introduced the Enhanced Incomeshield plan to meet with the many requests from our existing policyholders. We offered a two month period for upgrading of this plan. We received 60,000 requests. It was not possible for us to cope with this unexpected volume, as many policyholders rushed in to beat the deadline.
We have now decided to offer the upgrading to the remaining policyholders to take effect on the next renewal of their insurance plan. All existing policyholders will be given an additional opportunity for the upgrading within a 12 months period. The terms of the upgrading will also be clearly explained in the FAQ that will accompany the renewal notice.
We apologise to our many policyholders who were affected by our backlog. We plan to sort out this matter by October.
The frank answer is "yes". We are suffering from temporary indigestion. But, it is not serious. We hope to be able to recover from it fully by October.
When we tendered for the Medishield Plus scheme, we wanted to offer to the 300,000 members a better package that gives about higher coverage at a reduced premium. Our offer was the most attractive. We were given the entire portfolio of 300,000 members.
We made the best estimate of the likely work load based on our experience with 500,000 Incomeshield policyholders that are insured with us, and with the data provided by the Ministry of Health.
The actual volume of claims was higher than expected. This is due to the difference in the way of handling the claims through the integrated system. We have to change the computer system to deal with the higher situation and new way of processing. It takes time to design and implement the changes. There were other integation issues as well.
The matter was aggravated in June, when we introduced the Enhanced Incomeshield plan to meet with the many requests from our existing policyholders. We offered a two month period for upgrading of this plan. We received 60,000 requests. It was not possible for us to cope with this unexpected volume, as many policyholders rushed in to beat the deadline.
We have now decided to offer the upgrading to the remaining policyholders to take effect on the next renewal of their insurance plan. All existing policyholders will be given an additional opportunity for the upgrading within a 12 months period. The terms of the upgrading will also be clearly explained in the FAQ that will accompany the renewal notice.
We apologise to our many policyholders who were affected by our backlog. We plan to sort out this matter by October.
Friday, August 18, 2006
Good performance during the past 4 weeks
A month ago, we sent a letter to our existing policyholders to top up their investment in our fund, and take advantage of the recent drop in the stockmarkets. This allowed them to make additinal investment at a lower price.
A large number of policyholders took this advice and topped up their investment. They have benefitted from the move.
During the past 4 weeks, the investment funds managed by NTUC Income have earned a return of between 2% to 5%. The highest increase is for the Singapore Equity fund.
These are the positive factors leading to the improved sentiment over the past month, globally and in Singapore.
It is still a good time to invest in the funds, as the prices have not recovered to their earlier highs.
Tan Kin Lian
Chief Executive Officer
NTUC Income
A large number of policyholders took this advice and topped up their investment. They have benefitted from the move.
During the past 4 weeks, the investment funds managed by NTUC Income have earned a return of between 2% to 5%. The highest increase is for the Singapore Equity fund.
These are the positive factors leading to the improved sentiment over the past month, globally and in Singapore.
It is still a good time to invest in the funds, as the prices have not recovered to their earlier highs.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Slight fall in interest rate on money market fund
Generally, rates have come down some 0.1 to 0.2% for tenure up to 12 months. This would mean slightly lower return expected on our FlexiCash in the near future.
Despite the decline in rates, we should still be offering attractive returns to clients compared to savings rates offered by banks.
Globally, interest rates could be taking a pause in further hike, moving up higher only if the US Fed resumes rate hike on fear of inflation.
Despite the decline in rates, we should still be offering attractive returns to clients compared to savings rates offered by banks.
Globally, interest rates could be taking a pause in further hike, moving up higher only if the US Fed resumes rate hike on fear of inflation.
Wednesday, August 16, 2006
Call our hotline for home service
Editor
Straits Times
I refer to the article in "Buyer Beware" (ST, 11 Aug 2006). It featured a story about a customer who was overcharged by an electrician who advertised in the classified advertisements. The customer had to seek the assistance of the Consumer Association.
We advise customers to call our hotline, if the wish to engage a contractor for their home. Our contractors have to observe a code of ethics to provide quality service, fair price and and a 90-day warranty on the work.
More than 100 contractors covering 40 services are listed in our home service webiste. They cover many areas of home repairs and maintenance, including electrical, plumbing, air-conditioning and tuition. We check tht the contractors are licensed and have undergone the required training for their trade.
Our contractors are motivated to maintain a good standard, so that they can continue to be on our panel and enjoy a continuing flow of business from us. We handle an average of 150 customers every day.
After the contrator has completed the task, we call our customers to get their feedback. We received a satisfaction rating of 95%.
This is an example of the application of co-operative principles to benefit all parties, including the contractors and their customers.
Our referral service is available to policyholders and the general public. More information are available from our website: www.income.coop/homeservices. You can call our 24-hour hotline, 6788 8788.
Anthony Chia
General Manager
NTUC Income
Straits Times
I refer to the article in "Buyer Beware" (ST, 11 Aug 2006). It featured a story about a customer who was overcharged by an electrician who advertised in the classified advertisements. The customer had to seek the assistance of the Consumer Association.
We advise customers to call our hotline, if the wish to engage a contractor for their home. Our contractors have to observe a code of ethics to provide quality service, fair price and and a 90-day warranty on the work.
More than 100 contractors covering 40 services are listed in our home service webiste. They cover many areas of home repairs and maintenance, including electrical, plumbing, air-conditioning and tuition. We check tht the contractors are licensed and have undergone the required training for their trade.
Our contractors are motivated to maintain a good standard, so that they can continue to be on our panel and enjoy a continuing flow of business from us. We handle an average of 150 customers every day.
After the contrator has completed the task, we call our customers to get their feedback. We received a satisfaction rating of 95%.
This is an example of the application of co-operative principles to benefit all parties, including the contractors and their customers.
Our referral service is available to policyholders and the general public. More information are available from our website: www.income.coop/homeservices. You can call our 24-hour hotline, 6788 8788.
Anthony Chia
General Manager
NTUC Income
Take Ownership, be Responsible
My colleague sent this letter to the newspaper. She asked me to publish the letter in my blog.
TAKING OWNERSHIP, BE RESPONSIBILE
My daughter is in Nursery Class at a local kindergarten. Her kindergarten is organising a trip to the zoo the end of this month. My daughter brought back the parent’s consent form for this trip. I was appalled to see the following clause in the consent form: "I shall not hold the Centre responsible for any mishap during the trip".
I am indeed surprised to know that a kindergarten, that is suppose to take responsibility of the children when they are at school and at school activities would disregard their basic responsibility in such an outright manner.
Such a clause is indeed a blank cheque for the school to be taken a child safety very lightly. It now makes me wonder if the school would also completely write off their responsibility of my child’s safety if something was to happen during school hours.
If the school does not want to take responsibility, then should they organize such an activity? Is the school worried about their financial responsibility in case an accident occurs? Or are they just being very kiasu? Or is the school reflecting the kind of social fabric that we Singaporean are made up of: that it is not my problem, it someone else’s problem.
I believe that my daughter’s kindergarten is not unique in having such a disclaimer clause in the consent form. I believe the school is merely following guidelines set by the Ministry of Education. If so, then is it indeed the right of every parent to know why schools should organize activities that they don’t want to take responsibility of.
Would I trust my daughter to be sent out with anyone who irks their responsibility of taking care of her safety and well-being? I definitely would not.
Babita Rai
TAKING OWNERSHIP, BE RESPONSIBILE
My daughter is in Nursery Class at a local kindergarten. Her kindergarten is organising a trip to the zoo the end of this month. My daughter brought back the parent’s consent form for this trip. I was appalled to see the following clause in the consent form: "I shall not hold the Centre responsible for any mishap during the trip".
I am indeed surprised to know that a kindergarten, that is suppose to take responsibility of the children when they are at school and at school activities would disregard their basic responsibility in such an outright manner.
Such a clause is indeed a blank cheque for the school to be taken a child safety very lightly. It now makes me wonder if the school would also completely write off their responsibility of my child’s safety if something was to happen during school hours.
If the school does not want to take responsibility, then should they organize such an activity? Is the school worried about their financial responsibility in case an accident occurs? Or are they just being very kiasu? Or is the school reflecting the kind of social fabric that we Singaporean are made up of: that it is not my problem, it someone else’s problem.
I believe that my daughter’s kindergarten is not unique in having such a disclaimer clause in the consent form. I believe the school is merely following guidelines set by the Ministry of Education. If so, then is it indeed the right of every parent to know why schools should organize activities that they don’t want to take responsibility of.
Would I trust my daughter to be sent out with anyone who irks their responsibility of taking care of her safety and well-being? I definitely would not.
Babita Rai
My friend's experience with insurance agents
My friend told this story. 25 years ago, when he started working, he bought a few insurance policies from company X. The agent keeps coming back to him every few years, to advice him to change to a new plan. He took the advice.
Later, he realised that the agent was taking him for a ride. The agent was not looking after his interest. Each time, when he changed the policies, the agent earned a big commission again. He cancelled all the policies, and dropped the agent.
Later, he moved to company Y. The agent gave him good advice, and served him well until today.
Both company X and company Y are not NTUC Income. My friend said that he now buy his home and car insurance from NTUC Income.
Advice: Do not allow your agent to advice you to switch your policies to a new plan. You will lose most of your savings. The agent earned a high commission during the first two years.
Later, he realised that the agent was taking him for a ride. The agent was not looking after his interest. Each time, when he changed the policies, the agent earned a big commission again. He cancelled all the policies, and dropped the agent.
Later, he moved to company Y. The agent gave him good advice, and served him well until today.
Both company X and company Y are not NTUC Income. My friend said that he now buy his home and car insurance from NTUC Income.
Advice: Do not allow your agent to advice you to switch your policies to a new plan. You will lose most of your savings. The agent earned a high commission during the first two years.
My personal experience in managing my own money
Zaobao's CEO forum
Although I earn a high salary as a chief executive officer, I spend my money carefully.
I give a monthly allowance to my wife to take care of the food and other household expenses. I spend carefully on my entertainment, clothing and other personal expenses. If I am not using the company car, I prefer to take a bus or MRT, rather than call a taxi.
I think carefully, before I buy appliances, furniture or other household needs. I keep things for several years and will not replace them unless they break down. When I travel on holiday, I will fly economy class and stay in modestly priced hotels. I do not want to be extravagrant.
My wife share my same values and avoid spending extravagrantly. But, she likes to wear nice clothes and to look pretty. Once a while, she will pamper herself.
I make a large monthly contribution to the Community Chest of Singapore to help the needy.
I have a lot of savings each month. I invest most of my savings in a large, well diversified investment fund managed by NTUC Income. I invest for the long term, i.e 10 years or longer. During the past few years, the fund achieved a very attractive rate of return of more than 15% per annum.
Previously, when I invested on my own in shares, I did not make much gain. Some of my shares made money, but others lose money. On the whole, I do make a small gain, but it was not spectacular. I learned that it is better to let the professional fund manager make the decison for me. They have more time to monitor the investments in the fund.
I live in my own house and own two other properties on rental. I bought my properties at a high price, so they do not make any profit for me. They earn a modest return on the rental.
People who buy property at a low price can make a big capital gain. But, in my case, I am not so lucky with my property investments.
If I were to earn a much lower salary, I will certainly have a monthly budget and make sure that at least 15 percent of my salary is saved for the future. I will be even more careful with my monthly spending. I wish to advise all young people to have a similar approach towards their spending and savings. Do not be extravagrant. Be frugal.
I have three children. Two are working. My youngest is still in university. I encourage them to follow my financial habit and be frugal.
I have taken an investment-linked policy and invested a lump sum for each of my three children. I prefer to give them some of my assets now, so that they can have some money that now belong to them. This will give them a sense of financial well being and independence. So far, they have been careful, and allowed the savings to accumulate and earn a good return. They have not taken out the money to spend.
Although I earn a high salary as a chief executive officer, I spend my money carefully.
I give a monthly allowance to my wife to take care of the food and other household expenses. I spend carefully on my entertainment, clothing and other personal expenses. If I am not using the company car, I prefer to take a bus or MRT, rather than call a taxi.
I think carefully, before I buy appliances, furniture or other household needs. I keep things for several years and will not replace them unless they break down. When I travel on holiday, I will fly economy class and stay in modestly priced hotels. I do not want to be extravagrant.
My wife share my same values and avoid spending extravagrantly. But, she likes to wear nice clothes and to look pretty. Once a while, she will pamper herself.
I make a large monthly contribution to the Community Chest of Singapore to help the needy.
I have a lot of savings each month. I invest most of my savings in a large, well diversified investment fund managed by NTUC Income. I invest for the long term, i.e 10 years or longer. During the past few years, the fund achieved a very attractive rate of return of more than 15% per annum.
Previously, when I invested on my own in shares, I did not make much gain. Some of my shares made money, but others lose money. On the whole, I do make a small gain, but it was not spectacular. I learned that it is better to let the professional fund manager make the decison for me. They have more time to monitor the investments in the fund.
I live in my own house and own two other properties on rental. I bought my properties at a high price, so they do not make any profit for me. They earn a modest return on the rental.
People who buy property at a low price can make a big capital gain. But, in my case, I am not so lucky with my property investments.
If I were to earn a much lower salary, I will certainly have a monthly budget and make sure that at least 15 percent of my salary is saved for the future. I will be even more careful with my monthly spending. I wish to advise all young people to have a similar approach towards their spending and savings. Do not be extravagrant. Be frugal.
I have three children. Two are working. My youngest is still in university. I encourage them to follow my financial habit and be frugal.
I have taken an investment-linked policy and invested a lump sum for each of my three children. I prefer to give them some of my assets now, so that they can have some money that now belong to them. This will give them a sense of financial well being and independence. So far, they have been careful, and allowed the savings to accumulate and earn a good return. They have not taken out the money to spend.
Sunday, August 13, 2006
Invest now to enjoy a lower charge on Flexi Cash
Here is your last chance to invest in our money market fund (Flexi Cash) during our promotion (ie enjoy lower spread of 0.1%)
Our money market fund earned an average return of 3.5% during the past 1 month. It is better than the interest rate on fixed deposit, and there is no lock-in period.
Our promotion will end on 31 August. After the promotion, the spread for investing in the money market fund will be increased to 0.25%.
By investing now, you enjoy a saving of 0.15% in the spread. If you invest $100,000, the saving is $150. Act now. Enjoy the lower spread, an attactive return, and flexibility.
Call 6877 3366.
Our money market fund earned an average return of 3.5% during the past 1 month. It is better than the interest rate on fixed deposit, and there is no lock-in period.
Our promotion will end on 31 August. After the promotion, the spread for investing in the money market fund will be increased to 0.25%.
By investing now, you enjoy a saving of 0.15% in the spread. If you invest $100,000, the saving is $150. Act now. Enjoy the lower spread, an attactive return, and flexibility.
Call 6877 3366.
Need a loan? Go for Smart Credit!
NTUC Income has launched an unsecured loan called Smart Credit.
The attractions of Smart Credit are:
* available to policyholders above 21, with annual income of at least $30,000
* can be used for wedding, travel, medical, emergency and other lifestyle needs
* up to 2 months of salary
* no need for guarantors
* loan can be repaid within 5 years
* interest rate is only 12.88% per annum
* enjoy a rebate of 20% of interest charged, for prompt payment during the year
* instant online approval through the website
Details are available at www.income.coop/loans
Banks and financial institutions charge 15% to 18% on their unsecured credit. Most of them do not offer any rebate on interest for prompt payment.
Be Smart. Use Smart Credit from NTUC Income.
The attractions of Smart Credit are:
* available to policyholders above 21, with annual income of at least $30,000
* can be used for wedding, travel, medical, emergency and other lifestyle needs
* up to 2 months of salary
* no need for guarantors
* loan can be repaid within 5 years
* interest rate is only 12.88% per annum
* enjoy a rebate of 20% of interest charged, for prompt payment during the year
* instant online approval through the website
Details are available at www.income.coop/loans
Banks and financial institutions charge 15% to 18% on their unsecured credit. Most of them do not offer any rebate on interest for prompt payment.
Be Smart. Use Smart Credit from NTUC Income.
Barbeque at Labrador Park
My daughter and her husband organised a barbeque at Labrador Park. I attended it. It was an enjoyable experience. I especially like the sea breeze, blowing all the way from Sentosa. It was quite refreshing.
I miss the sea breeze after moving out of Marine Parade 20 years ago.
I recommend friends to organise a barbeque at the sea side. We have many of these wonderful facilities in Singapore. And they are available for a small booking fee.
A few other families also held their barbeque at Labrador Park. The family in the next pit held a birthday celebration.
Enjoy.
I miss the sea breeze after moving out of Marine Parade 20 years ago.
I recommend friends to organise a barbeque at the sea side. We have many of these wonderful facilities in Singapore. And they are available for a small booking fee.
A few other families also held their barbeque at Labrador Park. The family in the next pit held a birthday celebration.
Enjoy.
FAQ: Get a better return for your CPF savings
draft (subject to change)
1. How can I get a better return on my CPF savings?
Your savings in the CPF earns for you an interest rate of 2.5% per annum (ordinary account) or 4% per annum (special account).
If you invest your savings in our Combined Fund (which is allowed by CPF), you are likely to get a higher return. This will give more money for your retirement.
2. How much more can I earn?
The following table shows the amount at the end of 10 and 20 years, if you invest $100,000 of your savings:
If you keep $100,000 in the CPF to earn 2.5% per annum., you will get $128,000 at the end of 10 years. If you invest this sum to earn 6% per annum, it will grow to $179,000. You can get $51,000 more, by investing to earn a higher return.
If you keep $100,000 in the CPF to earn 2.5% per annum., you will get $164,000 at the end of 20 years. If you invest this sum to earn 6% per annum, it will grow to $320,000. You can get $156,000 more, by investing to earn a higher return.
If you can earn 9% per annum, the difference is $109,000 for 10 years and $396,000 for 20 years. It is staggering.
I have shown the figure above for the special account (which earns 4% per annum). You will find it attractive to invest your special account to earn a higher rate of return.
The return of 6% and 9% are used for illustration only. We want to encourage you to find out more about other ways to invest your CPF savings to earn a higher rate of return. It is worth exploring.
3. Do I have to invest in risky investments?
There is some risk in investing in equities (i.e. shares of companies) and in bonds (i.e. issued by companies or governments).
You can reduce the risk in the following ways:
* invest in a large, well diversified fund - reduce the impact of some investments performing badly
* invest for the long term - to average out the good and bad years
* invest only in quality shares and bonds - the return is still attractive, and the risk is low
If you choose this investment strategy, you are likely to get the market rate of return. Here are the returns for the past years:
Over the past 10 years, global equities earned an average yearly return of 6.4% and Singapore equity earned 5.4%. The return over 20 years and 30 years are better.
4. Do I have to incur high charges?
The investment funds offered by NTUC Income have lower charges, compared to similar funds in the market.
Our initial charge is 3.5%, compared to an average of 5% charged by other funds. Our annual charge is about 1% per annum, compared to an average of 2% charged by other funds. Other funds may have hidden charges that are not disclosed in the reported charges.
Over 10 years, our lower charges can earn for you about 10% to 20% more than similar funds.
If your investment in our funds earn $200,000 for you, another fund may pay you $20,000 to $40,000 LESS, due to their higher charges! This is a lot of money.
It is better for you to invest your CPF savings with NTUC Income. We will take care of your interest and give you a better return.
5. What fund should I invest in?
We recommend that you invest in our Combined Fund. Here are its key features:
* the Combined Fund is invested in $3,800 million of underlying assets
* the fund is invested in over 900 quality assets (ie equities and bonds)
* the assets are managed by 9 top fund managers based around the world
* the annual charge is among the lowest in the market, i.e. about 1% per annum
* the fund (growth) earned an average of xx.x% per annum during its first three years (2003 to 2005)
Note: Past performance is not indicative of future performance. This investments are subject to risk. The returns are not guaranteed.
6. Can I withdraw my investments at a later date?
You can withdraw your investment at any time.
We advise you to invest for at least 10 year, so that you can benefit from the higher return, and average out the good years and bad years. It also allow you to spread the initial front-end charge over a longer period.
If you decide to withdraw, wait for a good time, when the investment have appreciated in value and produce a good profit to you. Do not withdraw at a bad time, and make a loss.
If you invest using your CPF savings, the withdrawal have to be credited back to the CPF account.
Some people wish to withdraw their investment to pay for a property. They should consider taking a bigger loan for the property. If the interest on the loan may be lower than the return from their investments in our Combined Fund, it is better to keep your investment in the Combined Fund.
7. How can I find out more, before I invest?
You have these options:
* visit our website, www.income.coop/xxxxxxx
* visit our business center and talk to a consultant (call 6877 3366 to make an appointment)
* contact your insurance adviser to visit you at home
* attend our weekly eduational talk (call 6877 3366 to register)
8. Can I invest my cash savings?
You can invest your cash savings as well. It is better for you to take your savings out of fixed deposit and invest in our Combined Fund.
If you have invested in other funds that levy a high charge, or give you a lower than average return, you can withdraw from that find and re-invest in our Combined Fund.
9. Is this a good time to invest?
The stockmarket has corrected during the past two months. Many of the funds are now cheaper by 5% to 10%.
This is a good time to invest, for the long term. The investments are likely to recover in value over the next 6 to 12 months. (This is just an opinion, and is not a guarantee). You should act now, to take advantage of the lower price.
10. Is there a promotion offer?
We have a promotion offer for a limited period. If you come to our business center or our branch (to see your adviser), you can get a bonus unit of 1% or 2% depending on the amount that you invest.
For example, if you invest $100,000, the bonus unit of 2% will give you an additional $2,000 of investment.
11. How do I invest?
You can call your insurance adviser or visit our business center (call 6877 3366 to make an appointment). You can call the CPF to get a statement of the amount that you can invest.
Act now. Do not miss this attractive offer.
1. How can I get a better return on my CPF savings?
Your savings in the CPF earns for you an interest rate of 2.5% per annum (ordinary account) or 4% per annum (special account).
If you invest your savings in our Combined Fund (which is allowed by CPF), you are likely to get a higher return. This will give more money for your retirement.
2. How much more can I earn?
The following table shows the amount at the end of 10 and 20 years, if you invest $100,000 of your savings:
Annual return over the term ..........
Term 2.5% 4% 6% 9%
10 years $128,000 $148,000 $179,000 $237,000
20 years $164,000 $219.000 $320,000 $560,000
If you keep $100,000 in the CPF to earn 2.5% per annum., you will get $128,000 at the end of 10 years. If you invest this sum to earn 6% per annum, it will grow to $179,000. You can get $51,000 more, by investing to earn a higher return.
If you keep $100,000 in the CPF to earn 2.5% per annum., you will get $164,000 at the end of 20 years. If you invest this sum to earn 6% per annum, it will grow to $320,000. You can get $156,000 more, by investing to earn a higher return.
If you can earn 9% per annum, the difference is $109,000 for 10 years and $396,000 for 20 years. It is staggering.
I have shown the figure above for the special account (which earns 4% per annum). You will find it attractive to invest your special account to earn a higher rate of return.
The return of 6% and 9% are used for illustration only. We want to encourage you to find out more about other ways to invest your CPF savings to earn a higher rate of return. It is worth exploring.
3. Do I have to invest in risky investments?
There is some risk in investing in equities (i.e. shares of companies) and in bonds (i.e. issued by companies or governments).
You can reduce the risk in the following ways:
* invest in a large, well diversified fund - reduce the impact of some investments performing badly
* invest for the long term - to average out the good and bad years
* invest only in quality shares and bonds - the return is still attractive, and the risk is low
If you choose this investment strategy, you are likely to get the market rate of return. Here are the returns for the past years:
Benchmark Return(Annualized)
10yr 20yr 30yr
Global Equity MSCI World (USD) 6.4% 8.7% 9.1%
Singapore Equity STI (SGD) 5.4% 10.1% N.A.
Global Bond LBAG(hedged to SGD)3.1% N.A. N.A.
Source: Bloomberg
Over the past 10 years, global equities earned an average yearly return of 6.4% and Singapore equity earned 5.4%. The return over 20 years and 30 years are better.
4. Do I have to incur high charges?
The investment funds offered by NTUC Income have lower charges, compared to similar funds in the market.
Our initial charge is 3.5%, compared to an average of 5% charged by other funds. Our annual charge is about 1% per annum, compared to an average of 2% charged by other funds. Other funds may have hidden charges that are not disclosed in the reported charges.
Over 10 years, our lower charges can earn for you about 10% to 20% more than similar funds.
If your investment in our funds earn $200,000 for you, another fund may pay you $20,000 to $40,000 LESS, due to their higher charges! This is a lot of money.
It is better for you to invest your CPF savings with NTUC Income. We will take care of your interest and give you a better return.
5. What fund should I invest in?
We recommend that you invest in our Combined Fund. Here are its key features:
* the Combined Fund is invested in $3,800 million of underlying assets
* the fund is invested in over 900 quality assets (ie equities and bonds)
* the assets are managed by 9 top fund managers based around the world
* the annual charge is among the lowest in the market, i.e. about 1% per annum
* the fund (growth) earned an average of xx.x% per annum during its first three years (2003 to 2005)
Note: Past performance is not indicative of future performance. This investments are subject to risk. The returns are not guaranteed.
6. Can I withdraw my investments at a later date?
You can withdraw your investment at any time.
We advise you to invest for at least 10 year, so that you can benefit from the higher return, and average out the good years and bad years. It also allow you to spread the initial front-end charge over a longer period.
If you decide to withdraw, wait for a good time, when the investment have appreciated in value and produce a good profit to you. Do not withdraw at a bad time, and make a loss.
If you invest using your CPF savings, the withdrawal have to be credited back to the CPF account.
Some people wish to withdraw their investment to pay for a property. They should consider taking a bigger loan for the property. If the interest on the loan may be lower than the return from their investments in our Combined Fund, it is better to keep your investment in the Combined Fund.
7. How can I find out more, before I invest?
You have these options:
* visit our website, www.income.coop/xxxxxxx
* visit our business center and talk to a consultant (call 6877 3366 to make an appointment)
* contact your insurance adviser to visit you at home
* attend our weekly eduational talk (call 6877 3366 to register)
8. Can I invest my cash savings?
You can invest your cash savings as well. It is better for you to take your savings out of fixed deposit and invest in our Combined Fund.
If you have invested in other funds that levy a high charge, or give you a lower than average return, you can withdraw from that find and re-invest in our Combined Fund.
9. Is this a good time to invest?
The stockmarket has corrected during the past two months. Many of the funds are now cheaper by 5% to 10%.
This is a good time to invest, for the long term. The investments are likely to recover in value over the next 6 to 12 months. (This is just an opinion, and is not a guarantee). You should act now, to take advantage of the lower price.
10. Is there a promotion offer?
We have a promotion offer for a limited period. If you come to our business center or our branch (to see your adviser), you can get a bonus unit of 1% or 2% depending on the amount that you invest.
For example, if you invest $100,000, the bonus unit of 2% will give you an additional $2,000 of investment.
11. How do I invest?
You can call your insurance adviser or visit our business center (call 6877 3366 to make an appointment). You can call the CPF to get a statement of the amount that you can invest.
Act now. Do not miss this attractive offer.
Get prior approval first for your loan
A borrower wanted to take a loan from several banks. He was rejected, as he had a previous bad credit record.
This is his history.
He operated a business before. The business failed after a few years. He had to sell his house to settle his debts. He has now found a job. We wanted to buy an apartment now. He even signed the purchase option. Then, he approached the bank for the loan.
The banks had access to his previous credit record, as it is now shared through a credit bureau. Several of the banks rejected his loan.
He approached NTUC Income for help. He needs a loan immediately as the option will expire within the next few days. We find it difficult to help him, but we will try.
-------------------------------
Here is my general advice to other people who wants to buy a property:
* you can approach NTUC Income to get prior approval for a loan
* we will process your application for free
* you can then look for your property
* you can sign the purchase option without worring about the loan (as it is prior approved)
* we are likely to give you a lower interest rate or fairer terms
Be wise. Get proir approval.
This is his history.
He operated a business before. The business failed after a few years. He had to sell his house to settle his debts. He has now found a job. We wanted to buy an apartment now. He even signed the purchase option. Then, he approached the bank for the loan.
The banks had access to his previous credit record, as it is now shared through a credit bureau. Several of the banks rejected his loan.
He approached NTUC Income for help. He needs a loan immediately as the option will expire within the next few days. We find it difficult to help him, but we will try.
-------------------------------
Here is my general advice to other people who wants to buy a property:
* you can approach NTUC Income to get prior approval for a loan
* we will process your application for free
* you can then look for your property
* you can sign the purchase option without worring about the loan (as it is prior approved)
* we are likely to give you a lower interest rate or fairer terms
Be wise. Get proir approval.
Performance of Equity Funds
Performance of Equity Funds
between major insurers for 2003 to 2005 (3 year)
between major insurers for 2003 to 2005 (3 year)
Investment-linked Fund Annualized
Return
Global Equity
NTUC Income Global Equity 19.2%
Prulink Global Equity 16.0%
AIA Portfolio 100 14.3%
Greatlink Global Equity 12.5%
*
Singapore Equity
NTUC Income S'pore Equity 21.8%
Greatlink S'pore Equities 17.7%
*
Europe Equity
Prulink Pan European 19.8%
NTUC Income Europe Equity 19.5%
Greatlink Europe Equity 17.5%
*
Technology
Prulink Global Technology 20.7%
NTUC Income Technology 18.2%
AIA Global Technology 13.8%
*
Source: S&P Report
Think of your Future!
We live in an uncertain world. Jobs are uncertain, due to global competition. Life is uncertain, due to terrorism, war, disease and natural disasters. It is even risky to invest our savings.
Many people need insurance to take care of the uncertainty and risks.
The financial institutions, such as banks, insurers and fund managers, design financial products to address these needs. They are able to design complicated products that look attractive, but do not give a fair return to the consumers. Their aim is to make a big profit margin for their shareholders, but this is usually done at the expense of the consumers.
These products are usually not easily understood by consumers. But, they are able to use marketing to get consumers to buy their products.
NTUC Income offer fair products that are good for consumers. They give an attractive return for their savings.
We wish to educate consumers, so that you know how to choose the right financial product and get a fair, attractive return for their savings. You can earn $20,000 or $50,000 more, on your long term saving plan, without taking excessive risk.
Here are the convenient ways for you to learn:
* read our product FAQ at www.income.coop/insurance/faq
* learn about insurance at www.knowyourinsurance.com.sg
* attend our educational talk (call 6877 3366)
* read a ranking of products: www.askdrmoney.com
Please help to pass this message to your friends and family members. Do them a favour. Help them to make the right choice. It is for their own good.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Many people need insurance to take care of the uncertainty and risks.
The financial institutions, such as banks, insurers and fund managers, design financial products to address these needs. They are able to design complicated products that look attractive, but do not give a fair return to the consumers. Their aim is to make a big profit margin for their shareholders, but this is usually done at the expense of the consumers.
These products are usually not easily understood by consumers. But, they are able to use marketing to get consumers to buy their products.
NTUC Income offer fair products that are good for consumers. They give an attractive return for their savings.
We wish to educate consumers, so that you know how to choose the right financial product and get a fair, attractive return for their savings. You can earn $20,000 or $50,000 more, on your long term saving plan, without taking excessive risk.
Here are the convenient ways for you to learn:
* read our product FAQ at www.income.coop/insurance/faq
* learn about insurance at www.knowyourinsurance.com.sg
* attend our educational talk (call 6877 3366)
* read a ranking of products: www.askdrmoney.com
Please help to pass this message to your friends and family members. Do them a favour. Help them to make the right choice. It is for their own good.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Flexi Cash earned 3.5% after initial charge of 0.1%
Dear Mr Tan
I refer to your posting on 8 August 2006 where you indicated that the flexi-cash earned a return of 3.5% per annum in the past 1 month, presumably during the month of July 2006.
I have invested $200,000/= on 7 July 2006 and looking at the unit price on 7 August 2006, my return is less than 1.8% p a. I earned interest of only $300 on $200,000 for 1 month).
Please care to enlighten me how the earning of 3.5% per annum came about.
--------------------------
Dear,
The return for 1 month is about 0.28% (equivalent to 3.5% per year). Less the front end load of 0.1%, you get 0.18% for the past one month.
Next month, if the return in the money market fund is still the same, you will get 0.28%. If the money market fund increases, you will get highier.
The unit price is a way to calculate the average return of all the investments in the money market fund, and especially as investors join and leave on different days.
You will certainly enjoy the higher interest rate after overcoming the initial front end load of 0.1%. It is a good investment. Your money is not locked in to any specific period.
I refer to your posting on 8 August 2006 where you indicated that the flexi-cash earned a return of 3.5% per annum in the past 1 month, presumably during the month of July 2006.
I have invested $200,000/= on 7 July 2006 and looking at the unit price on 7 August 2006, my return is less than 1.8% p a. I earned interest of only $300 on $200,000 for 1 month).
Please care to enlighten me how the earning of 3.5% per annum came about.
--------------------------
Dear,
The return for 1 month is about 0.28% (equivalent to 3.5% per year). Less the front end load of 0.1%, you get 0.18% for the past one month.
Next month, if the return in the money market fund is still the same, you will get 0.28%. If the money market fund increases, you will get highier.
The unit price is a way to calculate the average return of all the investments in the money market fund, and especially as investors join and leave on different days.
You will certainly enjoy the higher interest rate after overcoming the initial front end load of 0.1%. It is a good investment. Your money is not locked in to any specific period.
Saturday, August 12, 2006
Guide to Incomeshield
NTUC Income has the following Incomeshield plans
Incomeshield - covers up to certain limits, less co-payment
Enhanced Incomeshield - covers "as charged", less co-payment
Medishield Plus (taken over from CPF)
PLUS rider: covers co-payment, ie deductible and co-insurance
Incomeshield - covers up to certain limits, less co-payment
Enhanced Incomeshield - covers "as charged", less co-payment
Medishield Plus (taken over from CPF)
PLUS rider: covers co-payment, ie deductible and co-insurance
Cover Income Enhanced Medishield
Ward shield Incomeshield Plus
Private Plan P Plan EP (Preferred) n/a
A Plan A Plan EA (Advantage) Plan MA
B1 Plan B Plan EB (Basic) Plan MB
B2, C Plan C n/a n/a
PLUS Rider Yes Yes No
Agents keen to join NTUC Income
At our recent recruitment briefing, 19 agents out of 20 indicate interest to join NTUC Income.
My manager called six of them after the meeting. All are positive about joining Income. Here are their feedback:
* Income is different from other insurers.
* Income has a good reputation
* Impressed with our Leads System
* The CEO is convincing
* There is potential for Career Advancement
* Easier to market Income products.
* Likes the concept of the Insuarnce consultant.
Another manager called five of them. All of them want to join Income. Here are their feedback:
Another manager called five agents who are interested to migrate to NTUC Income. Here are their reasons:
* like our Cooperative values
* Had good experience with our Claims dept
* like our 1-tier structure
* Income has strong customer base
* Income offers office-based sales job
* Career advancement
My manager called six of them after the meeting. All are positive about joining Income. Here are their feedback:
* Income is different from other insurers.
* Income has a good reputation
* Impressed with our Leads System
* The CEO is convincing
* There is potential for Career Advancement
* Easier to market Income products.
* Likes the concept of the Insuarnce consultant.
Another manager called five of them. All of them want to join Income. Here are their feedback:
Another manager called five agents who are interested to migrate to NTUC Income. Here are their reasons:
* like our Cooperative values
* Had good experience with our Claims dept
* like our 1-tier structure
* Income has strong customer base
* Income offers office-based sales job
* Career advancement
Collect the Logic9 gift from our business center
Mrs Tan participated in our Flexi-link contest at our website. She won a Logic9 pocketbook as a gift. Here is her request and my reply.
-----------------------------------
Dear Mr Tan,
Firstly I would like to congrats your company’s innovative way of getting surveys done online. I believe that this is more effective and saves client's time.
When it comes to collection of gift token for participating, eg Logic 9 booklet, you make it very inconvenient and require us to collect it personally.
I suggest that you mail it to us. You can find our address from your database.
--------------------------------
Dear Mrs Tan
I hope that you don't mind coming to our business center to collect the gift. When we offered the gift, we wanted to avoid the additional cost of posting the gift.
We also wanted our consultant in the business center to have a chance to talk to our policyholder.
Tan Kin Lian
CEO, NTUC Income
-----------------------------------
Dear Mr Tan,
Firstly I would like to congrats your company’s innovative way of getting surveys done online. I believe that this is more effective and saves client's time.
When it comes to collection of gift token for participating, eg Logic 9 booklet, you make it very inconvenient and require us to collect it personally.
I suggest that you mail it to us. You can find our address from your database.
--------------------------------
Dear Mrs Tan
I hope that you don't mind coming to our business center to collect the gift. When we offered the gift, we wanted to avoid the additional cost of posting the gift.
We also wanted our consultant in the business center to have a chance to talk to our policyholder.
Tan Kin Lian
CEO, NTUC Income
Investor wants indexed fund with even lower charges
Hi Mr Tan,
Thank you for the interesting seminar on 2 Aug. Glad that your investment funds have the lowest expense ratio in the market.
When you initiate a global equity or bond index funds which will lower expense ratio by at least 50% ?
Note: Many studies have recommended index funds for long term investors.
---------------------------
Dear
This may take another one or two years to be available. We have to sort out other more pressing issues first. I suggest that you invest in our actively managed fund for the time being.
Tan Kin Lian
CEO, NTUC Income
Thank you for the interesting seminar on 2 Aug. Glad that your investment funds have the lowest expense ratio in the market.
When you initiate a global equity or bond index funds which will lower expense ratio by at least 50% ?
Note: Many studies have recommended index funds for long term investors.
---------------------------
Dear
This may take another one or two years to be available. We have to sort out other more pressing issues first. I suggest that you invest in our actively managed fund for the time being.
Tan Kin Lian
CEO, NTUC Income
Pay by GIRO to reduce the handling cost
A policyholder is angry about having to pay a fee of 1.2% to pay through credit card. Here is his letter (edited) and my reply.
----------------------------------------------
Dear Mr Tan,
I refer to the above NTUC policy which my mother bought for me 16 years ago.
I received a letter from your office recently, reminding me of the payment via GIRO deduction.
I called your office to request to pay by credit card. I got this reply:
1. From 1 May 2006, we will allow payment for premium up to $300 by credit card. This is applicable to all products which are on yearly mode.
2. For payment in excess of $300, we will charge 1.2% to the policyholder.
3. If the policyholder does not wish to bear this charge, we will ask the policyholder to pay by GIRO, NETS, internet banking or cheque.
My questions to you are:
1. Why are you imposing a 1.2% handling fee when this is not standard industry practice?
2. Do you actually have premium policies, which are equal or less than S$300 per year? (Which is precluded from paying this handling fee?)
-------------------------------
Dear
Our aim is to encourage policyholders to pay by GIRO as the cost of collection is lower.
I estimate that we have to collect $500 million in life insurance premium in each year. If all the policyholders insist on paying by credit card, we have to incur 1.5% on the credit card charge. This will amount to $7.5 million.
I hope that you will realise why we are reluctant to incur this potential cost.
We have many travel, accident and home insurance policies payable by annual premium less than $300.
In your case, we have to pay a fee of $15 to the bank to receive your premium of $1,000 by credit card. We want to avoid this wasteful expense. If you send us a cheque, it will cost us $2 to process it.
----------------------------------------------
Dear Mr Tan,
I refer to the above NTUC policy which my mother bought for me 16 years ago.
I received a letter from your office recently, reminding me of the payment via GIRO deduction.
I called your office to request to pay by credit card. I got this reply:
1. From 1 May 2006, we will allow payment for premium up to $300 by credit card. This is applicable to all products which are on yearly mode.
2. For payment in excess of $300, we will charge 1.2% to the policyholder.
3. If the policyholder does not wish to bear this charge, we will ask the policyholder to pay by GIRO, NETS, internet banking or cheque.
My questions to you are:
1. Why are you imposing a 1.2% handling fee when this is not standard industry practice?
2. Do you actually have premium policies, which are equal or less than S$300 per year? (Which is precluded from paying this handling fee?)
-------------------------------
Dear
Our aim is to encourage policyholders to pay by GIRO as the cost of collection is lower.
I estimate that we have to collect $500 million in life insurance premium in each year. If all the policyholders insist on paying by credit card, we have to incur 1.5% on the credit card charge. This will amount to $7.5 million.
I hope that you will realise why we are reluctant to incur this potential cost.
We have many travel, accident and home insurance policies payable by annual premium less than $300.
In your case, we have to pay a fee of $15 to the bank to receive your premium of $1,000 by credit card. We want to avoid this wasteful expense. If you send us a cheque, it will cost us $2 to process it.
We will honour claims for enhanced Incomeshield during the processing period
Mr Tan applied to convert his family existing Incomeshield plan to Enhanced Incomeshield in May.
Due to the high volume of applications and migration to a new computer system, our processing time took longer than the service standard. Hence Mr Tan was not told about the status of his conversion. He wrote to give his feedback in August.
We explained to Mr Tan of the current situation and assured him that if any claim arises within the processing time, we will honour the claim under the Enhanced Incomeshield terms. At the same time, we have requested our underwriter to expedite the processing.
Mr Tan's enhanced cover will commence on 1 September. He is happy with our assurance to honour any claim arises during the processing time, which is a fair practice.
----------------------------------
We will give this assurance to the 60,000 applicants that are still on our waiting list, who are in the same situation as Mr Tan, subject to the conditions below:
For policyholders requesting equivalent upgrading to the Enhanced plans, e.g. Plan B to Enhanced Basic, the higher benefits will apply.
For policyholders requesting upgrade to a higher plan, e.g. Plan B to Enhanced Advantage, the benefits under the higher plan will apply if no policy exclusion is subsequently applied. Exclusions or limited terms will only apply if the insured member has already developed a medical condition.
Due to the high volume of applications and migration to a new computer system, our processing time took longer than the service standard. Hence Mr Tan was not told about the status of his conversion. He wrote to give his feedback in August.
We explained to Mr Tan of the current situation and assured him that if any claim arises within the processing time, we will honour the claim under the Enhanced Incomeshield terms. At the same time, we have requested our underwriter to expedite the processing.
Mr Tan's enhanced cover will commence on 1 September. He is happy with our assurance to honour any claim arises during the processing time, which is a fair practice.
----------------------------------
We will give this assurance to the 60,000 applicants that are still on our waiting list, who are in the same situation as Mr Tan, subject to the conditions below:
For policyholders requesting equivalent upgrading to the Enhanced plans, e.g. Plan B to Enhanced Basic, the higher benefits will apply.
For policyholders requesting upgrade to a higher plan, e.g. Plan B to Enhanced Advantage, the benefits under the higher plan will apply if no policy exclusion is subsequently applied. Exclusions or limited terms will only apply if the insured member has already developed a medical condition.
Past performance is not an indication of future performance
Some financial advisers recommend to their clients to invest in funds with high expense ratios that performed well in the past years.
Dr Money (a financial journalist writing for The New Paper) said that Research done in America over the past decades have shown that the top performers in past years will not be the top performers in the future years. They tend to move to the lower quartiles.
This is why MAS require a statement to be made that "Past performance is not indicative of future performance".
This is also my view, based on the experience of the funds managed by NTUC Income and our external fund managers. The performance in some years will be better than the market, and will be worse in other years.
What is the reason? Each fund manager focuses on a specific strategy, e.g. growth or value strategy. In some years, a certain strategy will perform better than the other strategy. The situation is likely to change in other years, as the investment results go in cycles.
No one knows in advance which strategy will perform better. Hence, it is better to stick to a certain strategy and measure the results over a longer period, say 10 years or longer.
If you put your money now in a high cost fund that performs better in past years, you are likely to be disillustioned. You will find that the fund will perform worse in the future years, and you will be paying high expenses for nothing.
The financial adviser will be happy to sell you the story that he is able to select a good fund for you. And he can earn a higher commision to sell the investment to you!
Here is my advice. When you choose a fund, look for a large, well diversified, low cost fund.
Do not invest in a small fund, as you have to depend on the quality of the manager. It is difficult to judge, unless you know the manager personally and can trust the manager. And when the manager moves to another fund, you do not know who will be the next person who will manage it.
Most (but not all of) the funds managed by NTUC Income earn 2% to 3% higher than similar large funds managed by other insurance companies.
I do not claim that my internal or external fund managers are performing better. It can be a matter of luck. But, I do know that our expense ratio is 1% lower than the other funds.
I also know that we manage the funds ethically and look after the interest of the existing investors. We do not churn the investments. We do not allow new investors to come in and get a better price, at the expense of existing investors. Perhaps, our ethical practices account for another 1% to 2% in the difference in yield.
A 2% difference in expense ratio will amount to 34% over 10 years. If your investment value is $100,000, you can get $34,000 more by investing in a low cost fund that gives a differnce of 2% in yield.
Here is a final tip. The combined funds managed by NTUC Income has a total of $3,800 million in assets. The actual size reported to LIA/IMAS is smaller, as it is the portion held by the ILP investors. But, they are investing in a much larger fund that is co-mingled with our life insurance fund. You can attend our educational talk by calling 68773366.
Dr Money (a financial journalist writing for The New Paper) said that Research done in America over the past decades have shown that the top performers in past years will not be the top performers in the future years. They tend to move to the lower quartiles.
This is why MAS require a statement to be made that "Past performance is not indicative of future performance".
This is also my view, based on the experience of the funds managed by NTUC Income and our external fund managers. The performance in some years will be better than the market, and will be worse in other years.
What is the reason? Each fund manager focuses on a specific strategy, e.g. growth or value strategy. In some years, a certain strategy will perform better than the other strategy. The situation is likely to change in other years, as the investment results go in cycles.
No one knows in advance which strategy will perform better. Hence, it is better to stick to a certain strategy and measure the results over a longer period, say 10 years or longer.
If you put your money now in a high cost fund that performs better in past years, you are likely to be disillustioned. You will find that the fund will perform worse in the future years, and you will be paying high expenses for nothing.
The financial adviser will be happy to sell you the story that he is able to select a good fund for you. And he can earn a higher commision to sell the investment to you!
Here is my advice. When you choose a fund, look for a large, well diversified, low cost fund.
Do not invest in a small fund, as you have to depend on the quality of the manager. It is difficult to judge, unless you know the manager personally and can trust the manager. And when the manager moves to another fund, you do not know who will be the next person who will manage it.
Most (but not all of) the funds managed by NTUC Income earn 2% to 3% higher than similar large funds managed by other insurance companies.
I do not claim that my internal or external fund managers are performing better. It can be a matter of luck. But, I do know that our expense ratio is 1% lower than the other funds.
I also know that we manage the funds ethically and look after the interest of the existing investors. We do not churn the investments. We do not allow new investors to come in and get a better price, at the expense of existing investors. Perhaps, our ethical practices account for another 1% to 2% in the difference in yield.
A 2% difference in expense ratio will amount to 34% over 10 years. If your investment value is $100,000, you can get $34,000 more by investing in a low cost fund that gives a differnce of 2% in yield.
Here is a final tip. The combined funds managed by NTUC Income has a total of $3,800 million in assets. The actual size reported to LIA/IMAS is smaller, as it is the portion held by the ILP investors. But, they are investing in a much larger fund that is co-mingled with our life insurance fund. You can attend our educational talk by calling 68773366.
Friday, August 11, 2006
Views about expense ratio and return on funds
In his comment to my posting, a James Ong said that some funds with higher expense ratio have consistently produced better returns that NTUC Income's funds.
I asked Dr Money for his views. Here is his reply:
* As for the idea that funds with higher expense ratios have higher returns, there is no evidence of this in the literature (ie past research).
* To the contrary, index funds have lower expense ratios and on average they out-perform managed funds. The difference in performance turns out to be approximately equal to the difference in their expense ratios.
* In the long-run, costs matter in determining a fund's performance -(and the lower the costs, the better the performance
James Ong also says, "I would encourage the public to visit the LIA/IMAS website to avoid any confusion."
Dr Money said:
Quote
There is no confusion. That web site is also the source of the data I used in my study.
I went through each of the 600+ funds at the LIA/IMAS web site and pulled out all the equity funds.
For ILPs, I took the average expense ratio for each insurer's equity funds. For unit trusts, I took one average for all equity unit trust funds.
Results:
1) For NTUC Income, the average expense ratio for its equity funds is 1.0 per cent.
2) For the other 10 life insurance companies, the average expense ratio for their equity funds is 1.7 per cent. (It ranges from 1.4 to 2.2 per cent.)
3) For unit trusts, the average expense ratio for all equity funds averages 2.1 per cent.
The results are shown in: http://www.askdrmoney.com/Ins_ILP_SP.htm
unquote
I asked Dr Money for his views. Here is his reply:
* As for the idea that funds with higher expense ratios have higher returns, there is no evidence of this in the literature (ie past research).
* To the contrary, index funds have lower expense ratios and on average they out-perform managed funds. The difference in performance turns out to be approximately equal to the difference in their expense ratios.
* In the long-run, costs matter in determining a fund's performance -(and the lower the costs, the better the performance
James Ong also says, "I would encourage the public to visit the LIA/IMAS website to avoid any confusion."
Dr Money said:
Quote
There is no confusion. That web site is also the source of the data I used in my study.
I went through each of the 600+ funds at the LIA/IMAS web site and pulled out all the equity funds.
For ILPs, I took the average expense ratio for each insurer's equity funds. For unit trusts, I took one average for all equity unit trust funds.
Results:
1) For NTUC Income, the average expense ratio for its equity funds is 1.0 per cent.
2) For the other 10 life insurance companies, the average expense ratio for their equity funds is 1.7 per cent. (It ranges from 1.4 to 2.2 per cent.)
3) For unit trusts, the average expense ratio for all equity funds averages 2.1 per cent.
The results are shown in: http://www.askdrmoney.com/Ins_ILP_SP.htm
unquote
AA-rating: what is the difference?
I posted my views on a structured product that offers 4.9% return over 7 years. I received this comment:
Quote
This post seems to be selectively misleading. To my limited awareness, the assets backing the product concerned is rated by S&P. Have also done a quick surf of Income's website. It is revealed that Income is rated AA by S&P which is the same rating as the plan.
Since you have highlighted that it is a "scary" product due to the risk, will I be correct to say that it actually shares similar level of risk as Income?
Unquote
-------------------------
Here is my reply:
It is very rare for an insurance company to fail. If it gets into financial difficulty, another insurance company will take over the liability. The policyholder will be protected to a large extend.
Anyway, NTUC Income is rated AA by Standard & Poors. This is the highly rating among all insurance companies in Asia. It is very safe to invest your money with NTUC Income.
In the case of the structured product (not offered by NTUC Income), the investor will lose 100% of the invested capital if there are 21 failures among the 121 investments.
Although the likelihood of 21 failures is small, it is still "scary", especially if the investor has not be made aware about this risk.
I advise the investors to clarify with the insurance company. You can decide after getting the explanation.
Quote
This post seems to be selectively misleading. To my limited awareness, the assets backing the product concerned is rated by S&P. Have also done a quick surf of Income's website. It is revealed that Income is rated AA by S&P which is the same rating as the plan.
Since you have highlighted that it is a "scary" product due to the risk, will I be correct to say that it actually shares similar level of risk as Income?
Unquote
-------------------------
Here is my reply:
It is very rare for an insurance company to fail. If it gets into financial difficulty, another insurance company will take over the liability. The policyholder will be protected to a large extend.
Anyway, NTUC Income is rated AA by Standard & Poors. This is the highly rating among all insurance companies in Asia. It is very safe to invest your money with NTUC Income.
In the case of the structured product (not offered by NTUC Income), the investor will lose 100% of the invested capital if there are 21 failures among the 121 investments.
Although the likelihood of 21 failures is small, it is still "scary", especially if the investor has not be made aware about this risk.
I advise the investors to clarify with the insurance company. You can decide after getting the explanation.
JetStar Asia
I went with a few colleagues to Phuket on JetStar. I wanted to experience a low cost airline.
My experience is satisfactory. It is almost like a normal airline. The only key difference is that they do not serve any food. I do not mind. Airline food is not that great anyway.
The saving is fare is almost 50%, compared to the normal airline. So, it make sense to travel on a low cost airline for short trips.
My experience is satisfactory. It is almost like a normal airline. The only key difference is that they do not serve any food. I do not mind. Airline food is not that great anyway.
The saving is fare is almost 50%, compared to the normal airline. So, it make sense to travel on a low cost airline for short trips.
NTUC Income ILP Funds perform better than other funds
In the S&P website, the ILP funds of NTUC Income give a higher return than similar funds managed by other insurers. The difference is about 2 percent per annum.
Is it because NTUC Income fund managers were more skilled or perhaps more lucky? I do not think so.
The most likely reason is that our funds have lower costs. Dr Money has made an analysis of the cost. It is posted in his website, www.askdrmoney.com.
If you invest $100,000 for 10 years, what is the difference of 2% per annum in yield?
It is $34,000. This is the difference between earning 5% and 7% per annum. Yes, it is a lot of money. Yes, you can earn $34,000 more by investing with NTUC Income (and earn a 2% higher return), due to our lower charges.
Is it because NTUC Income fund managers were more skilled or perhaps more lucky? I do not think so.
The most likely reason is that our funds have lower costs. Dr Money has made an analysis of the cost. It is posted in his website, www.askdrmoney.com.
If you invest $100,000 for 10 years, what is the difference of 2% per annum in yield?
It is $34,000. This is the difference between earning 5% and 7% per annum. Yes, it is a lot of money. Yes, you can earn $34,000 more by investing with NTUC Income (and earn a 2% higher return), due to our lower charges.
Thursday, August 10, 2006
Customer wants to buy an additional annuity
Dear Mr. Tan,
You gave a talk on Anniuty last year, I was in the audience. I was impressed by your frankness.
I wish to ask about your new feature, if I were to buy a new Annuity Policy, if I happen to die within a year or two, the unspent mobney will be return to the deceased family ?
I will probably have some money coming in Mid or end of Sept, and I am considering of buying another $30,000 worth of annuity.
Can you kindly e mail me a quotation, telling me how much in returns per month, I expect to receive in six month's time? I already have two existing annuity policies with your company and I am quite happy with them.
You gave a talk on Anniuty last year, I was in the audience. I was impressed by your frankness.
I wish to ask about your new feature, if I were to buy a new Annuity Policy, if I happen to die within a year or two, the unspent mobney will be return to the deceased family ?
I will probably have some money coming in Mid or end of Sept, and I am considering of buying another $30,000 worth of annuity.
Can you kindly e mail me a quotation, telling me how much in returns per month, I expect to receive in six month's time? I already have two existing annuity policies with your company and I am quite happy with them.
Logic9 pocketbooks sell very well
We now sell 2,000 pieces of the Logic9 pocketbook and CD software EVERY WEEK at bookstores, Fairprice supermakets and Income branches.
Logic9 is now getting to be very popular!
You can play the puzzle in the pocketbook when you travel by bus, train or plane. It sells for only $5 and contain 128 puzzles at 4 levels. Each puzzle has a unique answer, so it is fun!
You can buy a package of 4 volumes with a CD (to play on the computer) for a special price of only $16 from our branches. This is so popular, that it sold out. New stocks will arrive soon.
The Logic9 package is a wonderful gift for a friend.
Logic9 is now getting to be very popular!
You can play the puzzle in the pocketbook when you travel by bus, train or plane. It sells for only $5 and contain 128 puzzles at 4 levels. Each puzzle has a unique answer, so it is fun!
You can buy a package of 4 volumes with a CD (to play on the computer) for a special price of only $16 from our branches. This is so popular, that it sold out. New stocks will arrive soon.
The Logic9 package is a wonderful gift for a friend.
Greetings for the 41st National Day
I wish to send greetings to our 1,800,000 policyholders.
Happy 41st National Day.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Happy 41st National Day.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Wednesday, August 09, 2006
You can lose your entire capital in this structured product!
An insurance company (not NTUC Income) sold a single premium product that pays an annual return of 4.9%. According to their advertisement, they will return 100% of the capital at the end of 7 years. There is a footnote that "terms and condition applies".
A financial expert who analysed this product told me that there is a risk that the investor may lose 100% of the capital invested, if 21 of the 120 investments failed.
Many of the investors may not be aware about this risk. If this event occur, they can lose their entire capital. If they invest $100,000, they may have to lose all of $100,000. Although the probably it low, it can be quite frightening.
Apparently, the agents who sold this product did not highlight this risk to the clients.
I advise investors who have bought this product to seek clarification from the insurance company.
A financial expert who analysed this product told me that there is a risk that the investor may lose 100% of the capital invested, if 21 of the 120 investments failed.
Many of the investors may not be aware about this risk. If this event occur, they can lose their entire capital. If they invest $100,000, they may have to lose all of $100,000. Although the probably it low, it can be quite frightening.
Apparently, the agents who sold this product did not highlight this risk to the clients.
I advise investors who have bought this product to seek clarification from the insurance company.
FAQ: Life Annuity
1. What is a life annuity?
A life annuity allows you to invest a capital sum to earn an income payable for the rest of your lifetime.
If you put the capital sum in a bank, you can earn interest at 2% to 3% per annum. For example, a capital sum of $100,000 can earn for you $3,000 a year, or $250 a month.
If this capital sum is invested in a life annuity, you can earn a higher return, e.g. 5% to 6% per annum. For example, a capital sum of $100,000, you can earn for you, say $6,000 a year, or $500 a month. The actual amount depends on your age, gender and the type of annuity.
A life annuity can pay a better return to you, because your capital sum is distributed back to you based on your average life expectancy.
2. Who should invest in a life annuity?
It is advisable for all retired persons to invest in a life annuity. You should invest a capital sum that is sufficient to provide a guaranteed income that can meet your expenses during your retirement.
Most couples with a modest lifestyle will find $1,500 a month to be adequate for their needs, if they already owned a home that is fully paid. A single person will probably need $1,000 a month.
If they are used to a comfortable or luxurious lifestyle, they will need a higher monthly income. Some people target to have $5,000 or $10,000 a month for their needs.
3. How is the annuity better than other types of investments?
The life annuity has the following advantages compared to other types of investments, such as fixed deposits or investing in shares:
* it provides a better return than fixed deposit
* the payment is guaranteed for a lifetime
You can choose an annuity with the following features:
* pays back the balance of the capital on early death
* increases the monthly payment with a bonus each year
If you put your capital sum in fixed deposit and spend more than the interest earned each year, you capital sum will run out at a future date. You will have nothing to live on.
With a life annuity, this will never happen. The monthly income will continue to be paid to you for as long as your live. It will continue to grow with a bonus.
4. How much do I get from my capital sum?
The amount of monthly income depends on the following:
* your current age and gender
* the commencement date of the annuity payment
* the type of annuity
Here is an example of the monthly annuity for a capital sum of $100,000. The first payment is due one month after the date of entry. A bonus may be added to the monthly payment each year, depending on the average investment yield of the fund.
No-CP: no capital protection, ie no refund on early death
With-CP: with capital protection, ie refund of balance of capita sum on early death
A female receives a lower monthly payment compared to a male, because they are expected to live longer.
An older person receives a higher monthly payment, because they have a shorter life expectancy.
An annuity without capital protection pays 35% to 40% more than an annuity with capital protection. The difference is quite high!
5. How does the bonus work?
Each year, the actuary works on the return on the investments of the fund. If thi s return exceed the interest rate that is used to calculate the annuity payment, the actuary decides on the amount of the excess investment return to be used to declare a bonus to be added to the annuity payment.
In deciding on the amount of the bonus, the actuary has to take many relevant factors into account. The actuary has to act impartially and fairly in recommending the rate of bonus. The rate or bonus may differ between different types and series of annuity contacts.
If the rate of bonus is 3% and the monthly payment is $1,000, the bonus will add $30 to the monthly payment. The bonus declared in each year is guaranteed and will be payable for all future years. The monthly payment can only increase with bonus. It can never be reduced.
In some years, if the investment return is low, the actuary may recommend that no bonus will be added for the year.
The recommendation of the actuary is subject to approval of the board of directors. The payment of the bonus is non-contractual and is not guaranteed. The decision of the board of directors is final.
NTUC Income is a cooperative society. The actuary and board of directors will act in the best interest of all annuitants in deciding on the amount of bonus to be declared. They will declare a good rate of bonus while ensuring that the annuity fund remains financially solvent for all future years.
6. Why is my capital consumed during my lifetime?
If you wish to keep your capital sum intact, you should keep your money in a bank and spend only the interest earned. However, the amount of interest may be quite low, and inadequate for your needs.
You invest in a life annuity to earn a higher return. This is achieved by consuming your capital sum over the average life expectancy.
Some annuitants die younger. They will leave behind the balance of their capital sum in the fund. This will be used to pay the monthly income to the annuitants who live longer. The annuity works on the principle of pooling of risk of life expectancy. This is a fair arrangement.
Under the capital protected annuity, the balance of the capital sum (after deducting the monthly payments) is refunded to the estate on the early death of the annuitant. Only the interest earned is left behind in the fund.
If the annuitant does not need to have the refund on early death, they will receive a larger monthly payment.
7. What happens if I die at a younger age?
It depends on whether you have any capital protection, and the type of protection that is available in your annuity policy.
In some of our earlier policies, the annuity payment will continue to be paid to the beneficiary for a certain number of years. The remaining payments can be discounted to a lump sum, using the prevailing rate of interest.
For the policies issued in recent years, the balance of the capital sum is refunded, after deducting the annuity payments that have been received! .
8. What happens if I live for a long time?
The monthly payments will continue to be paid to you for as long as you live. If you live longer, you will receive more than the invested capital sum and the interest that is earned. The extended payment is contributed by the annuitants who die younger and leave behind a part of their capital sum in the fund.
9. Can I invest with my CPF savings?
If you have withdrawn your CPF savings, you are free to invest the savings in any suitable way that you decide. It is better to seek the advice of an expert adviser.
The CPF requires all members to keep a certain amount of savings in the retirement account. This amount is currently $99,400. This savings can be invested in a life annuity, but is subject to certain rules imposed by the CPF. Under this rule, the monthly payment can only start from age 62.
NTUC Income has a special plan, called the Classic Annuity, that is approved by the CPF. This plan is very popular. Over 25,000 CPF members have opted to invest their retirement account in this plan.
10. Can I invest with my own cash?
You can invest your own cash, including the savings withdrawn from the CPF account at age 55, in our life annuity.
Most people choose an annuity policy that pays the monthly payment immediately! , and has a capital protection. A few annuitants prefer the non-protec ted policy, as it pays a higher monthly sum.
Some people choose to invest their savings in our Combined Fund to earn a higher rate of return (not guaranteed), and to convert a part of the savings into a life annuity when they are older, say after age 65.
11. What is the difference between a participating and a non-participating annuity?
A non-participating annuity pays a fixed monthly sum. It is not eligible for any bonus.
A participating annuity pays a lower monthly sum (compared to a non-participating annuity), but is eligible for an annual bonus, based on the rate dec! lared by the board of directors.
All life annuities offered by NTUC Income are participating contracts. We offer some short term annuities as non-participating contacts.
12. Can I cancel my life annuity to get a refund?
You are allowed to cancel the annuity contract within three months of purchase and get a refund of the capital sum with interest earned, subject to deduction of some charges and any payments made to you.
Under the Classic plan, you can allowed to cancel the annuity contract at any time before age 62 and get a refund based on the terms of the contract, i.e. a refund of the capital sum with interest earned, subject to deduction of some charges.
After the annuity payments has commenced, you are generally not allowed to cancel your annuity and get a refund. The annuity is intended to be a lifetime contract.
If you insist on cancelling the contract, we can pay the refund that is applicable in the event of early death. This refund is usually not attractive to the annuitant.
Under certain circumstances, we may pay a higher refund, but this is entirely at our discretion. We have to make sure that the request for cancellation is not an attempt to take unfair advantage of the fund.
13. Should I keep my capital sum to pass to my children?
You have other assets, including your property, that can be passed to your children. This is more than sufficient.
You should invest a certain capital sum in a life annuity for your own benefit. You have to take care of yourself. This capital sum does not need to be kept for your children.
A life annuity allows you to invest a capital sum to earn an income payable for the rest of your lifetime.
If you put the capital sum in a bank, you can earn interest at 2% to 3% per annum. For example, a capital sum of $100,000 can earn for you $3,000 a year, or $250 a month.
If this capital sum is invested in a life annuity, you can earn a higher return, e.g. 5% to 6% per annum. For example, a capital sum of $100,000, you can earn for you, say $6,000 a year, or $500 a month. The actual amount depends on your age, gender and the type of annuity.
A life annuity can pay a better return to you, because your capital sum is distributed back to you based on your average life expectancy.
2. Who should invest in a life annuity?
It is advisable for all retired persons to invest in a life annuity. You should invest a capital sum that is sufficient to provide a guaranteed income that can meet your expenses during your retirement.
Most couples with a modest lifestyle will find $1,500 a month to be adequate for their needs, if they already owned a home that is fully paid. A single person will probably need $1,000 a month.
If they are used to a comfortable or luxurious lifestyle, they will need a higher monthly income. Some people target to have $5,000 or $10,000 a month for their needs.
3. How is the annuity better than other types of investments?
The life annuity has the following advantages compared to other types of investments, such as fixed deposits or investing in shares:
* it provides a better return than fixed deposit
* the payment is guaranteed for a lifetime
You can choose an annuity with the following features:
* pays back the balance of the capital on early death
* increases the monthly payment with a bonus each year
If you put your capital sum in fixed deposit and spend more than the interest earned each year, you capital sum will run out at a future date. You will have nothing to live on.
With a life annuity, this will never happen. The monthly income will continue to be paid to you for as long as your live. It will continue to grow with a bonus.
4. How much do I get from my capital sum?
The amount of monthly income depends on the following:
* your current age and gender
* the commencement date of the annuity payment
* the type of annuity
Here is an example of the monthly annuity for a capital sum of $100,000. The first payment is due one month after the date of entry. A bonus may be added to the monthly payment each year, depending on the average investment yield of the fund.
Entry Gender Monthly annuity
Age No-CP With-CP
55 Male $549 $391
Female $521 $366
60 Male $587 $428
Female $556 $400
65 Male $629 $473
Female $599 $443
No-CP: no capital protection, ie no refund on early death
With-CP: with capital protection, ie refund of balance of capita sum on early death
A female receives a lower monthly payment compared to a male, because they are expected to live longer.
An older person receives a higher monthly payment, because they have a shorter life expectancy.
An annuity without capital protection pays 35% to 40% more than an annuity with capital protection. The difference is quite high!
5. How does the bonus work?
Each year, the actuary works on the return on the investments of the fund. If thi s return exceed the interest rate that is used to calculate the annuity payment, the actuary decides on the amount of the excess investment return to be used to declare a bonus to be added to the annuity payment.
In deciding on the amount of the bonus, the actuary has to take many relevant factors into account. The actuary has to act impartially and fairly in recommending the rate of bonus. The rate or bonus may differ between different types and series of annuity contacts.
If the rate of bonus is 3% and the monthly payment is $1,000, the bonus will add $30 to the monthly payment. The bonus declared in each year is guaranteed and will be payable for all future years. The monthly payment can only increase with bonus. It can never be reduced.
In some years, if the investment return is low, the actuary may recommend that no bonus will be added for the year.
The recommendation of the actuary is subject to approval of the board of directors. The payment of the bonus is non-contractual and is not guaranteed. The decision of the board of directors is final.
NTUC Income is a cooperative society. The actuary and board of directors will act in the best interest of all annuitants in deciding on the amount of bonus to be declared. They will declare a good rate of bonus while ensuring that the annuity fund remains financially solvent for all future years.
6. Why is my capital consumed during my lifetime?
If you wish to keep your capital sum intact, you should keep your money in a bank and spend only the interest earned. However, the amount of interest may be quite low, and inadequate for your needs.
You invest in a life annuity to earn a higher return. This is achieved by consuming your capital sum over the average life expectancy.
Some annuitants die younger. They will leave behind the balance of their capital sum in the fund. This will be used to pay the monthly income to the annuitants who live longer. The annuity works on the principle of pooling of risk of life expectancy. This is a fair arrangement.
Under the capital protected annuity, the balance of the capital sum (after deducting the monthly payments) is refunded to the estate on the early death of the annuitant. Only the interest earned is left behind in the fund.
If the annuitant does not need to have the refund on early death, they will receive a larger monthly payment.
7. What happens if I die at a younger age?
It depends on whether you have any capital protection, and the type of protection that is available in your annuity policy.
In some of our earlier policies, the annuity payment will continue to be paid to the beneficiary for a certain number of years. The remaining payments can be discounted to a lump sum, using the prevailing rate of interest.
For the policies issued in recent years, the balance of the capital sum is refunded, after deducting the annuity payments that have been received! .
8. What happens if I live for a long time?
The monthly payments will continue to be paid to you for as long as you live. If you live longer, you will receive more than the invested capital sum and the interest that is earned. The extended payment is contributed by the annuitants who die younger and leave behind a part of their capital sum in the fund.
9. Can I invest with my CPF savings?
If you have withdrawn your CPF savings, you are free to invest the savings in any suitable way that you decide. It is better to seek the advice of an expert adviser.
The CPF requires all members to keep a certain amount of savings in the retirement account. This amount is currently $99,400. This savings can be invested in a life annuity, but is subject to certain rules imposed by the CPF. Under this rule, the monthly payment can only start from age 62.
NTUC Income has a special plan, called the Classic Annuity, that is approved by the CPF. This plan is very popular. Over 25,000 CPF members have opted to invest their retirement account in this plan.
10. Can I invest with my own cash?
You can invest your own cash, including the savings withdrawn from the CPF account at age 55, in our life annuity.
Most people choose an annuity policy that pays the monthly payment immediately! , and has a capital protection. A few annuitants prefer the non-protec ted policy, as it pays a higher monthly sum.
Some people choose to invest their savings in our Combined Fund to earn a higher rate of return (not guaranteed), and to convert a part of the savings into a life annuity when they are older, say after age 65.
11. What is the difference between a participating and a non-participating annuity?
A non-participating annuity pays a fixed monthly sum. It is not eligible for any bonus.
A participating annuity pays a lower monthly sum (compared to a non-participating annuity), but is eligible for an annual bonus, based on the rate dec! lared by the board of directors.
All life annuities offered by NTUC Income are participating contracts. We offer some short term annuities as non-participating contacts.
12. Can I cancel my life annuity to get a refund?
You are allowed to cancel the annuity contract within three months of purchase and get a refund of the capital sum with interest earned, subject to deduction of some charges and any payments made to you.
Under the Classic plan, you can allowed to cancel the annuity contract at any time before age 62 and get a refund based on the terms of the contract, i.e. a refund of the capital sum with interest earned, subject to deduction of some charges.
After the annuity payments has commenced, you are generally not allowed to cancel your annuity and get a refund. The annuity is intended to be a lifetime contract.
If you insist on cancelling the contract, we can pay the refund that is applicable in the event of early death. This refund is usually not attractive to the annuitant.
Under certain circumstances, we may pay a higher refund, but this is entirely at our discretion. We have to make sure that the request for cancellation is not an attempt to take unfair advantage of the fund.
13. Should I keep my capital sum to pass to my children?
You have other assets, including your property, that can be passed to your children. This is more than sufficient.
You should invest a certain capital sum in a life annuity for your own benefit. You have to take care of yourself. This capital sum does not need to be kept for your children.
Tuesday, August 08, 2006
Policyholder decided to keep the Growth policies
A policyholder invested in our Growth policies (ie single premium endowment policies).
She was approached to invest in a fixed deposit at a preferential rate of 3.45% for one year. She wanted to surrender the Growth policies to re-invest in this deposit. Based on the current surrender values, the yield for the past 4 years was about 2.5% per annum.
I sent to her the following facts. If she continued the Growth policies to the maturity date, the average return for the entire period increases to 3.5% per annum, based on our current bonus rates.
However, if we measure the cash value now now and the projected value at the maturity date, the return increased to an average of 5.2% per annum. It was clear that the policyhholder will get a better return by keeing the Growth policy to maturity.
She replied,
Dear Mr Tan
Thanks for dispensing good advice and information. I really do appreciate the efforts taken by you, and Jessie Wong.
She was approached to invest in a fixed deposit at a preferential rate of 3.45% for one year. She wanted to surrender the Growth policies to re-invest in this deposit. Based on the current surrender values, the yield for the past 4 years was about 2.5% per annum.
I sent to her the following facts. If she continued the Growth policies to the maturity date, the average return for the entire period increases to 3.5% per annum, based on our current bonus rates.
However, if we measure the cash value now now and the projected value at the maturity date, the return increased to an average of 5.2% per annum. It was clear that the policyhholder will get a better return by keeing the Growth policy to maturity.
She replied,
Dear Mr Tan
Thanks for dispensing good advice and information. I really do appreciate the efforts taken by you, and Jessie Wong.
Reply to Lim Yan Beng: It is better to invest in a life annuity!
Editor
Forum Page
Straits Times
I refer to the letter from Mr Lim Yan Beng entitled "It may not pay to invest in an annuity" (St Times, 8 August).
Mr Lim transferrred $37,000 from his CPF Retirement Account to pay a life annuity that pays him a guaranteed monthly sum of $183.30 in 2009, when he reach age 62. This monthly sum is payable for a lifetime and will earn an annual bonus that depends on the return from our investments.
The bonus that is added to his monthly sum is $4.60 in 2004 and $5.20 in 2005. They will increase his monthly sum to a total of $193.10 payable from age 62. This represents a notional return of 6.26% on his invested sum of $37,000. As a bonus is added each year, the notional return will increase further.
As each year's bonus is declared, it will be added to the monthly sum and is guaranteed.
In some years, if our investment return is low, we may not declare any bonus. But the bonus that were declared in past years are guaranteed. The monthly sum can only increase. It cannot be reduced.
The monthly sum will be payable for a lifetime. Many people are not aware that, with increased life expectancy, more and more people will be living beyond age 80, 85 or even 90 years. It is important that they invest a substantial portion of their savings in a life annuity that guarantees a payment to them that will continue for a lifetime.
For other types of investments, if the retiree draws out a large sum that the interest that is earned, there is the risk that the savings will be completely drawn down during their lifetime. This will leave them with nothing to live on.
The notional return quoted above is partly contributed by the consumption of the capital during the lifetime. The effective return to the annuitant is slightly more than 5% per annum, taking all relevant factors into account. This is more attractive than leaving the money to earn 4% per annum in the retirement account.
I apologise that my colleague had not given the information about our bonus in the right context to Mr Lim. This has led Mr Lim to make the wrong decision to cancel his life annuity. I urge Mr Lim to visit my office and talk to our specialist. I hope that he will reconsider his decision.
This incident highlights the importance of educating the public about the financial product that they have bought.
During the past two years, NTUC Income as intensified our effects to educate the public. We now have FAQ (frequently asked questions) about our various popular products. They are easily accessible from our website, http://www.income.coop/insurance/faq/
We also organise educational talks on various products. We invite our policyholders and potential customers to attend these educational talks. I urge them to attend the talk and have a better understanding of their product. They should also visit our business center and talk to our product specialist.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Forum Page
Straits Times
I refer to the letter from Mr Lim Yan Beng entitled "It may not pay to invest in an annuity" (St Times, 8 August).
Mr Lim transferrred $37,000 from his CPF Retirement Account to pay a life annuity that pays him a guaranteed monthly sum of $183.30 in 2009, when he reach age 62. This monthly sum is payable for a lifetime and will earn an annual bonus that depends on the return from our investments.
The bonus that is added to his monthly sum is $4.60 in 2004 and $5.20 in 2005. They will increase his monthly sum to a total of $193.10 payable from age 62. This represents a notional return of 6.26% on his invested sum of $37,000. As a bonus is added each year, the notional return will increase further.
As each year's bonus is declared, it will be added to the monthly sum and is guaranteed.
In some years, if our investment return is low, we may not declare any bonus. But the bonus that were declared in past years are guaranteed. The monthly sum can only increase. It cannot be reduced.
The monthly sum will be payable for a lifetime. Many people are not aware that, with increased life expectancy, more and more people will be living beyond age 80, 85 or even 90 years. It is important that they invest a substantial portion of their savings in a life annuity that guarantees a payment to them that will continue for a lifetime.
For other types of investments, if the retiree draws out a large sum that the interest that is earned, there is the risk that the savings will be completely drawn down during their lifetime. This will leave them with nothing to live on.
The notional return quoted above is partly contributed by the consumption of the capital during the lifetime. The effective return to the annuitant is slightly more than 5% per annum, taking all relevant factors into account. This is more attractive than leaving the money to earn 4% per annum in the retirement account.
I apologise that my colleague had not given the information about our bonus in the right context to Mr Lim. This has led Mr Lim to make the wrong decision to cancel his life annuity. I urge Mr Lim to visit my office and talk to our specialist. I hope that he will reconsider his decision.
This incident highlights the importance of educating the public about the financial product that they have bought.
During the past two years, NTUC Income as intensified our effects to educate the public. We now have FAQ (frequently asked questions) about our various popular products. They are easily accessible from our website, http://www.income.coop/insurance/faq/
We also organise educational talks on various products. We invite our policyholders and potential customers to attend these educational talks. I urge them to attend the talk and have a better understanding of their product. They should also visit our business center and talk to our product specialist.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Crazy Horse Paris
Singapore has the Crazy Horse Paris cabaret. It is an interesting show. For those who have not experienced it, you should try it. It is at Clarke Quay.
Over the past 15 years, I visit the Crazy Horse show in Paris on two occasions. It was highly recommended. I enjoyed the show each time.
The show consists of several dance items. They featured girls dancing to music. The girls were scantily clad, but not totally nude. The show include colored lights shining on their bodies.
It is an erotic show, but is tastefully executed. Many ladies enjoyed the show.
In Paris, I paid about $200 to watch the show. The show in Singapore is almost of the same standard as in Paris and is available for less than $100. One can get the standard of Paris for half of the price.
NTUC Income has made a special arrangement for our policyholders to watch the show at a special discount of 20% (for 4 or more tickets). Call 6877 3366, if you are interested. This is for a limited period only.
Over the past 15 years, I visit the Crazy Horse show in Paris on two occasions. It was highly recommended. I enjoyed the show each time.
The show consists of several dance items. They featured girls dancing to music. The girls were scantily clad, but not totally nude. The show include colored lights shining on their bodies.
It is an erotic show, but is tastefully executed. Many ladies enjoyed the show.
In Paris, I paid about $200 to watch the show. The show in Singapore is almost of the same standard as in Paris and is available for less than $100. One can get the standard of Paris for half of the price.
NTUC Income has made a special arrangement for our policyholders to watch the show at a special discount of 20% (for 4 or more tickets). Call 6877 3366, if you are interested. This is for a limited period only.
Customer ask for advice about Writing A Will
A customer ask me to send a copy of my past article about "writing a will". I am not able to locate it. I asked the customer to go to:
www.knowyourinsurance.com.sg.
There is a topic on "writing a will".
I hope that it is helpful.
www.knowyourinsurance.com.sg.
There is a topic on "writing a will".
I hope that it is helpful.
Immediate response service for motorists
Each day, an average of 40 motorists insured by NTUC Income meet with an accident.
For most cases, the motorist is able to drive their car to a nearby assessment center (Idac) to lodge a claim.
About 15% of motorists need assistance at the scene of the accident. They can call our hotline 6788 6616, to ask for our "immediate response service".
We will despatch a surveyor to visit the motorist at the scene. They will usually arrive at the scene within 30 minutes. However, if there is traffic congestion or heavy demand, they may take longer.
We are able to offer this service to third party claimants if our motorist is at fault in the accident.
At the scene, the surveyor will help the motorist to complete the SAS form (Singapore Accident Statement), take photographs of the accident scene and damages to the vehicles and guide the motorist to the nearest assessment center. If needed, they will also arrange for a tow truck.
For minor accidents, the surveyor is able to make direct settlement of the claim. This allows the motorist to find their own workshop to repair the vehicle. If their repair bill is lower, the motorist can keep the difference.
We now handle about 50 requests each month. We expect the number to increase, as there is greater awareness about this service.
Customers who use this service during the past six months have given us a high satisfaction rating of 90%. Some injured third parties equally commented our officers for prompt follow-up.
For most cases, the motorist is able to drive their car to a nearby assessment center (Idac) to lodge a claim.
About 15% of motorists need assistance at the scene of the accident. They can call our hotline 6788 6616, to ask for our "immediate response service".
We will despatch a surveyor to visit the motorist at the scene. They will usually arrive at the scene within 30 minutes. However, if there is traffic congestion or heavy demand, they may take longer.
We are able to offer this service to third party claimants if our motorist is at fault in the accident.
At the scene, the surveyor will help the motorist to complete the SAS form (Singapore Accident Statement), take photographs of the accident scene and damages to the vehicles and guide the motorist to the nearest assessment center. If needed, they will also arrange for a tow truck.
For minor accidents, the surveyor is able to make direct settlement of the claim. This allows the motorist to find their own workshop to repair the vehicle. If their repair bill is lower, the motorist can keep the difference.
We now handle about 50 requests each month. We expect the number to increase, as there is greater awareness about this service.
Customers who use this service during the past six months have given us a high satisfaction rating of 90%. Some injured third parties equally commented our officers for prompt follow-up.
Monday, August 07, 2006
Dispute over liability in third party claim
A policyholder disagreed with our claim officer's assessment of liability in a claim from a third party. He felt that the claim officer had not made the correct assessement. This matter was reviewed by the claim manager. After several rounds, the policyholder was still not satisifed. He brought this matter to my attention. I gave this reply:
Dear
I have taken note of this case.
The assessment of liability has to be made by our claim officers using their expertise and judgement. They have to take the relevant facts into account. If you disagree, you can meet with the claims committee to present your facts for their review.
If you wish to refer the matter to FIDREC, we will let them handle the matter.
I believe that my colleagues have stated our position on this matter. I think that they have acted fairly. They will not be able to engage in a further debate with you on this matter. Please accept our position as final.
Dear
I have taken note of this case.
The assessment of liability has to be made by our claim officers using their expertise and judgement. They have to take the relevant facts into account. If you disagree, you can meet with the claims committee to present your facts for their review.
If you wish to refer the matter to FIDREC, we will let them handle the matter.
I believe that my colleagues have stated our position on this matter. I think that they have acted fairly. They will not be able to engage in a further debate with you on this matter. Please accept our position as final.
19 qualified agents want to migrate to NTUC Income
20 qualified agents from other insurance companies attended our recruitment briefing today. They responded to our advertisement, "Soar in your Insurance Sales".
After the briefing and question and answer session, 19 agents signed up to join us. The remaining agent is a Malaysian. He will join us, if we can help to get a work permit for him.
All of these agents are convinced that NTUC Income can offer them a better opportunity to succeed in their passion - to serve the needs of their customers.
We welcome them.
After the briefing and question and answer session, 19 agents signed up to join us. The remaining agent is a Malaysian. He will join us, if we can help to get a work permit for him.
All of these agents are convinced that NTUC Income can offer them a better opportunity to succeed in their passion - to serve the needs of their customers.
We welcome them.
Flexi Cash earned 3.5%
Flexi Cash is invested in our money market fund. It should earn a return based on the average return of the fund, less a small charge of 0.25% per annum.
During the past month, from 1 to 31 July, the unit price of the money market fund increased from $1.032 to $1.035. This works out to an annualised return of 3.5%. It is higher than the 3% that was initially projected. (Please note that the higher return could be due to the rounding effect of computing the unit price).
The return on our money market fund will grow with the return on the money market fund.
During the past month, from 1 to 31 July, the unit price of the money market fund increased from $1.032 to $1.035. This works out to an annualised return of 3.5%. It is higher than the 3% that was initially projected. (Please note that the higher return could be due to the rounding effect of computing the unit price).
The return on our money market fund will grow with the return on the money market fund.
Advice for a retiree on investing the savings
FROM A RETIRED PERSON
Hi Mr Tan,
About 1 1/2 years ago, I mentioned in passing to one of your staff that I am impressed by your personality. I told her that though I do not know you personally, the write-ups about what you do tell a lot about your person. My husband had spoken to you in person at one of your seminars and was pleasantly surprised that you were sincere and approachable.
Shortly after I received an email from your staff conveying your appreciation for the compliments, and it was followed by a simple 2-word yet personal "thank you" email from you. Each time when I clear my mail, I am reluctant to delete your thank you note as it represents a comforting affirmation that we do the right thing to buy from NTUC Income.
I wish you well and hope you have many more years of good health and is able to steer NTUC Income for a long time
Currently I am still unsure whether I should buy a growth or annuity policy or split the $90,000 (CPF ordinary account on attaining 55) and buy both policies. I have been in contact with your insurance personnel but would much appreciate your personal take as to what the best option is. Thank you.
MY REPLY
Dear
Thank you for much for your kind words.
For most retired people, my advice is to buy a life annuity, as it provides an attractive return and provides an income for a lifetime.
However, the actual right answer has to take into account, the other factors. For example, do you have other sources of savings and income? I will ask my adviser, XYZ, to contact and advice you. He has advised some other retired people who have invested large sums of money with us, partly in a life annuity and partly in our investment fund.
I believe that he can give good advice to help you to make the right decision.
Hi Mr Tan,
About 1 1/2 years ago, I mentioned in passing to one of your staff that I am impressed by your personality. I told her that though I do not know you personally, the write-ups about what you do tell a lot about your person. My husband had spoken to you in person at one of your seminars and was pleasantly surprised that you were sincere and approachable.
Shortly after I received an email from your staff conveying your appreciation for the compliments, and it was followed by a simple 2-word yet personal "thank you" email from you. Each time when I clear my mail, I am reluctant to delete your thank you note as it represents a comforting affirmation that we do the right thing to buy from NTUC Income.
I wish you well and hope you have many more years of good health and is able to steer NTUC Income for a long time
Currently I am still unsure whether I should buy a growth or annuity policy or split the $90,000 (CPF ordinary account on attaining 55) and buy both policies. I have been in contact with your insurance personnel but would much appreciate your personal take as to what the best option is. Thank you.
MY REPLY
Dear
Thank you for much for your kind words.
For most retired people, my advice is to buy a life annuity, as it provides an attractive return and provides an income for a lifetime.
However, the actual right answer has to take into account, the other factors. For example, do you have other sources of savings and income? I will ask my adviser, XYZ, to contact and advice you. He has advised some other retired people who have invested large sums of money with us, partly in a life annuity and partly in our investment fund.
I believe that he can give good advice to help you to make the right decision.
Our projection are conservative!
A contributor to another web forum made tihs report on our Flexi-Cash plan: "NTUC Income usually has high non-guaranteed rates giving a false sense of security to consumers
I sent the following reply to that forum:
Flexi-Cash is invested in our money market fund. Currently, the fund earns an average return of about 3%, after deducting the management fee of 0.25%. As the market interest rate is likely to increase, the return on the money market fund is also likely to be higher. This is not a projection. It is a description of the working of the money market fund.
For our other insurance products, NTUC Income adopts a conservative projection of our future bonus rates. They are based on an average yield of 5.25% on our life insurance funds over the long term. This is much lower than the projection used by some insurance companies.
I sent the following reply to that forum:
Flexi-Cash is invested in our money market fund. Currently, the fund earns an average return of about 3%, after deducting the management fee of 0.25%. As the market interest rate is likely to increase, the return on the money market fund is also likely to be higher. This is not a projection. It is a description of the working of the money market fund.
For our other insurance products, NTUC Income adopts a conservative projection of our future bonus rates. They are based on an average yield of 5.25% on our life insurance funds over the long term. This is much lower than the projection used by some insurance companies.
SMS to notify our policyholders about the repair to their cars
NTUC Income insures 200,000 vehicles. We received about 25 cases each day from our policyholder who is involved in an accident and make a claim under their motor policy.
Our policyholder is required to report the accident at an assessment center (Idac) and to leave their vehicle there. We arrange for a workshop to repair the vehicle. We carry out a post-repair inspection.
The whole process from reporting to completion of repair and collection of vehicle takes 5 to 7 days for most cases.
During this time, we notify our policyholder through SMS on the workshp that has been selected and the estimated completion date. We also notify them on progress of the repari.
Our policyholders welcome this initative. They are notifed about the status and are not interrupted by a telephone call.
In our weekly survey, our policyholders gave a high satisfaction rate of 98% to our handling of their repairs.
Our policyholder is required to report the accident at an assessment center (Idac) and to leave their vehicle there. We arrange for a workshop to repair the vehicle. We carry out a post-repair inspection.
The whole process from reporting to completion of repair and collection of vehicle takes 5 to 7 days for most cases.
During this time, we notify our policyholder through SMS on the workshp that has been selected and the estimated completion date. We also notify them on progress of the repari.
Our policyholders welcome this initative. They are notifed about the status and are not interrupted by a telephone call.
In our weekly survey, our policyholders gave a high satisfaction rate of 98% to our handling of their repairs.
Thursday, August 03, 2006
Incomeshield claims will be processed more quickly
NTUC Income has 800,000 people insured under Incomeshield.
We receive an average of 300 claims each day from the hospitals in respect of these insured persons.
We have to process the hospital bills to check on the items that are allowed to be claimed, and to apply the deductible and co-insurance. For example, for certain treatments, the insurance plan covers up to certain limits and the excess has to be paid by the insured person.
In the past, the processing of each bill takes an average of 10 minutes. But the large volume requires 8 officers to process the claim. On average, it takes 14 days to approve the claim.
We have recently introduced an automated processing of the bills. Phase 1 of the automation process will be implemented by mid Aug 06. We expect that 40% of the bills can be approved within 2 days of receipt.
Phase 2 of the automation process, which is expected to be ready by Oct 06, will allow an additional 40% of the claims to be approved by the system within 2 days.
The remaining claims are more complicated and will continue to take about 14 days to approve.
I wish to thank our policyholders for your patience during this initial period. I hope that the quality of service will improve significantly by the end of this year.
We receive an average of 300 claims each day from the hospitals in respect of these insured persons.
We have to process the hospital bills to check on the items that are allowed to be claimed, and to apply the deductible and co-insurance. For example, for certain treatments, the insurance plan covers up to certain limits and the excess has to be paid by the insured person.
In the past, the processing of each bill takes an average of 10 minutes. But the large volume requires 8 officers to process the claim. On average, it takes 14 days to approve the claim.
We have recently introduced an automated processing of the bills. Phase 1 of the automation process will be implemented by mid Aug 06. We expect that 40% of the bills can be approved within 2 days of receipt.
Phase 2 of the automation process, which is expected to be ready by Oct 06, will allow an additional 40% of the claims to be approved by the system within 2 days.
The remaining claims are more complicated and will continue to take about 14 days to approve.
I wish to thank our policyholders for your patience during this initial period. I hope that the quality of service will improve significantly by the end of this year.
Many Agents wish to migrate to NTUC Income
We have good response from our advertisement "Soar in your Insurance Sales". About 100 agents have called our hotline or registered at our website. They are interested to find out about migrating to NTUC Income.
Here is my message to agents who now work with other insurance companies. If you are doing well, you should stay with your current company. If you find it difficult to meet their sales target, it is largely due to a "poor fit". This is not any shortcoming on your part.
Some agents are not aggressive and feel bad about pusing products to a reluctant customer. They will fit well into NTUC Income. Our culture is to look after the best interest of the customer. We do not have to push any product to them. They buy from us willingly.
We pay a fair rate of comission to our agent. They can earn well.
If you are interested to find out more, you can at www.mailbox.coop/0001. We will contact you for a briefing.
Here is my message to agents who now work with other insurance companies. If you are doing well, you should stay with your current company. If you find it difficult to meet their sales target, it is largely due to a "poor fit". This is not any shortcoming on your part.
Some agents are not aggressive and feel bad about pusing products to a reluctant customer. They will fit well into NTUC Income. Our culture is to look after the best interest of the customer. We do not have to push any product to them. They buy from us willingly.
We pay a fair rate of comission to our agent. They can earn well.
If you are interested to find out more, you can at www.mailbox.coop/0001. We will contact you for a briefing.
A special needs child
FROM A MOTHER
Dear Mr Tan,
I enjoyed your blog very much, it still amazes me that you post messages in the wee hours! It says a lot about your dedication to Income and the policyholders. Personally, I benefited a lot from reading your articles on financial planning.
I have been an Income policy holder for about 15 years now. When my son was born in 2003, I bought him 2 policies; a living policy and an Incomeshield policy in the same year.
In December 2005, he was officially diagnosed with autism. Little do we know that such a 'label' is actually a frightening term for insurance companies.
We were approached by an agent from company P in May this year. We switched Incomeshield to their plan due to the higher coverage. We did not declare "Autism" due to genuine ignorance.
Two months later, we wanted to get another policy with company P for my son and declared "Autism". To my horror, not only did they reject this proposal, they even cancelled their shield plan. The agent came to collect the certificate back!
There was no official letter, no apology , no explanation. I am appalled by the way we were treated! They don't even want to look at his psychology report. My son does not have severe autism. He does not inflict injury to himself.
Mr Tan, I don't know if it's too much to ask you to help reinstate his Incomeshield policy but it means alot to my special needs kid.
MY REPLY
Dear
I will ask my manager to see what we can do. Maybe, we can resinstate the basic Incomeshield cover that you had previously with us. I am not sure if we are able to upgrade into the enhanced cover. I will let him decide what is best. Okay?
Dear Mr Tan,
I enjoyed your blog very much, it still amazes me that you post messages in the wee hours! It says a lot about your dedication to Income and the policyholders. Personally, I benefited a lot from reading your articles on financial planning.
I have been an Income policy holder for about 15 years now. When my son was born in 2003, I bought him 2 policies; a living policy and an Incomeshield policy in the same year.
In December 2005, he was officially diagnosed with autism. Little do we know that such a 'label' is actually a frightening term for insurance companies.
We were approached by an agent from company P in May this year. We switched Incomeshield to their plan due to the higher coverage. We did not declare "Autism" due to genuine ignorance.
Two months later, we wanted to get another policy with company P for my son and declared "Autism". To my horror, not only did they reject this proposal, they even cancelled their shield plan. The agent came to collect the certificate back!
There was no official letter, no apology , no explanation. I am appalled by the way we were treated! They don't even want to look at his psychology report. My son does not have severe autism. He does not inflict injury to himself.
Mr Tan, I don't know if it's too much to ask you to help reinstate his Incomeshield policy but it means alot to my special needs kid.
MY REPLY
Dear
I will ask my manager to see what we can do. Maybe, we can resinstate the basic Incomeshield cover that you had previously with us. I am not sure if we are able to upgrade into the enhanced cover. I will let him decide what is best. Okay?
Wednesday, August 02, 2006
Why I like working in NTUC Income
Dear Mr Tan,
I have been working in NTUC Income since 1st Aug 02. Today is exactly my 4th year in this wonderful organization.
I am one of the fortunate ones to have this chance of job rotation.
I have rooted and enjoyed myself in working in NTUC Income because I love the organisational culture, such as M-E-R-I-T principles
Meritocracy: I just got a salary review based on good work performance
Entrepreneurship: CEO keeps educating and encouraging us to adopt this approach
Respect: We respect each and everyone's ideas irrespective of their position
Integrity: Given authority to handle claims
Teamwork: We work as a team to be first in our project
On top of the above, I love the 1-4-14 rule. It is such a wonderful approach. We will acknowledge to one's email on the same day. If it requires a straight forward reply, we will do so on the same day, otherwise we shall reply in 4 days time. If it is a more complicated issue, we will let the customers know that we will get back to them in 14 days time.
Customers will appreciate this approach a lot as they know that their queries are being attended to.
I am proud to tell my customers, relatives and friends that NTUC Income won the Gold Award for Singapore Call Centre of the Year! Customer calls are answered immediately by a person.
Last but not least, I truly admire the leadership lead by the CEO of Income, Mr Tan. He is very open, actively involved in lecturing courses, such as effective writing, staff briefing!
I am proud to be part of this organisation !
I have been working in NTUC Income since 1st Aug 02. Today is exactly my 4th year in this wonderful organization.
I am one of the fortunate ones to have this chance of job rotation.
I have rooted and enjoyed myself in working in NTUC Income because I love the organisational culture, such as M-E-R-I-T principles
Meritocracy: I just got a salary review based on good work performance
Entrepreneurship: CEO keeps educating and encouraging us to adopt this approach
Respect: We respect each and everyone's ideas irrespective of their position
Integrity: Given authority to handle claims
Teamwork: We work as a team to be first in our project
On top of the above, I love the 1-4-14 rule. It is such a wonderful approach. We will acknowledge to one's email on the same day. If it requires a straight forward reply, we will do so on the same day, otherwise we shall reply in 4 days time. If it is a more complicated issue, we will let the customers know that we will get back to them in 14 days time.
Customers will appreciate this approach a lot as they know that their queries are being attended to.
I am proud to tell my customers, relatives and friends that NTUC Income won the Gold Award for Singapore Call Centre of the Year! Customer calls are answered immediately by a person.
Last but not least, I truly admire the leadership lead by the CEO of Income, Mr Tan. He is very open, actively involved in lecturing courses, such as effective writing, staff briefing!
I am proud to be part of this organisation !
Policyholder is happy about the increase in bonus
The policyholder was unhappy that the bonus under this growth policy was cut in 2003. It was susequently increased in 2003 and 2004, but he was not specifically told about it. He asked why?
MY REPLY
Dear
We increased our bonus rates for the growth policy during the past two years. We show the bonus in each year's policyholder statement.
We do not wish to show a revised projection each time that the bonus has been changed, as it will cost us $1 million to send this information. We wish to avoid incurring this additional cost. We wish to spend less, so that there is more bonus to be given to our policyholders.
Of course, for policyholder who wish to request for this information, we are happy to oblige.
I hope that you understand our intention.
THE POLICYHOLDER REPLIED THAT HE WAS HAPPY WITH THE EXPLANATION AND THE INCREASE IN BONUS RATES.
MY REPLY
Dear
We increased our bonus rates for the growth policy during the past two years. We show the bonus in each year's policyholder statement.
We do not wish to show a revised projection each time that the bonus has been changed, as it will cost us $1 million to send this information. We wish to avoid incurring this additional cost. We wish to spend less, so that there is more bonus to be given to our policyholders.
Of course, for policyholder who wish to request for this information, we are happy to oblige.
I hope that you understand our intention.
THE POLICYHOLDER REPLIED THAT HE WAS HAPPY WITH THE EXPLANATION AND THE INCREASE IN BONUS RATES.
Policyholder is unhappy with lower maturity value
REPLY FROM MY LIFE INSURANCE MANAGER
My colleague informed me that you are unhappy with the maturity benefits you will be receiving under your Growth policies. The amount fell short of the projected figure.
Your two policies were bought in Aug 2001. At the time we sold you these policies, we gave a projection based on our best estimates. It was not possible for us to foresee the unfortunate events that followed in that year.
The investment climate had been extremely difficult and we had to cut our bonuses. Subsequently, we did better and were able to restore the bonuses, but only partially.
You invested a total of $110,000. You will be receiving $127,600. This represents a return of 3.01%. I think that is fairly attractive. It is higher than what you would have received if you have kept your monies in your CPF Ordinary Account.
AS THE POLICYHOLDER DOES NOT ACCEPT THE REPLY, I GAVE THIS FURTHER REPLY
Dear
Thank you for your feedback. I will ask my head of Life insurance to check that your policy has been treated fairly, similar to other policies of the same group.
Under our participating contract, we share our financial results fairly with all policyholders. If we earn more, we increase our bonus. If the investment climate is poor, we have to reduce the bonus, but it has to be applied fairly to everyone in the same group.
My colleague informed me that you are unhappy with the maturity benefits you will be receiving under your Growth policies. The amount fell short of the projected figure.
Your two policies were bought in Aug 2001. At the time we sold you these policies, we gave a projection based on our best estimates. It was not possible for us to foresee the unfortunate events that followed in that year.
The investment climate had been extremely difficult and we had to cut our bonuses. Subsequently, we did better and were able to restore the bonuses, but only partially.
You invested a total of $110,000. You will be receiving $127,600. This represents a return of 3.01%. I think that is fairly attractive. It is higher than what you would have received if you have kept your monies in your CPF Ordinary Account.
AS THE POLICYHOLDER DOES NOT ACCEPT THE REPLY, I GAVE THIS FURTHER REPLY
Dear
Thank you for your feedback. I will ask my head of Life insurance to check that your policy has been treated fairly, similar to other policies of the same group.
Under our participating contract, we share our financial results fairly with all policyholders. If we earn more, we increase our bonus. If the investment climate is poor, we have to reduce the bonus, but it has to be applied fairly to everyone in the same group.
Be generous in settling this claim
A motor policyholder installed a car tracking device. His car was stolen in Johor. It was recovered due to the device.
He incurred a loss of M$1,000 in making various payments, and has to incur an Excess of $500. Despite this, he is very happy to get his car back. This is because his financial loss will be much greater if the car was not found back.
Some of the expenses are not covered under the insurance policy as there is no evidence of the payment. I requested my claim manager to be generous in settling this claim in full and to waive the Excess, if possible. Ny installing the tracking device, he has helped us to reduce the loss.
He incurred a loss of M$1,000 in making various payments, and has to incur an Excess of $500. Despite this, he is very happy to get his car back. This is because his financial loss will be much greater if the car was not found back.
Some of the expenses are not covered under the insurance policy as there is no evidence of the payment. I requested my claim manager to be generous in settling this claim in full and to waive the Excess, if possible. Ny installing the tracking device, he has helped us to reduce the loss.
More insurance advisers wish to migrate to NTUC Income
Last evening, 19 persons attended our recruitment talks. 14 expressed an interest to join us. 7 are agents who now work in other companies. They wish to migrate to NTUC Income.
We have received 40 applicants who are attending our next recruitment talk in 1 week's time.
Since our advertisement on "Soar in your Insurance Sales", we are getting strong response. Many people are convinced that they have a better chance to do well with NTUC Income.
If you are interested, you can register with www.mailbox.coop/0001.
We have received 40 applicants who are attending our next recruitment talk in 1 week's time.
Since our advertisement on "Soar in your Insurance Sales", we are getting strong response. Many people are convinced that they have a better chance to do well with NTUC Income.
If you are interested, you can register with www.mailbox.coop/0001.
Our growth policy still provide an attractive return
A customer invested her savings in two growth policies which offered a return of 3.55% over 6 years and 4% over 10 years. These rates were much higher than the prevailing interest rate from the bank at the time that the investments were made.
She saw that the short term interest rate has increased in recent months, and asked this question: currently, market interest rate is high, about 3.45%,are we adjusting
our returns to be comparable with the market?
Here is my explantion:
Dear
When a policyholder invest in the growth policy, we promise the guaratneed sum assured and a bonus that will vary accordign to the actual return from the investments in the fund.
We have to invest the money to achieve an attractive long term rate of return, but in safe investments. This is done in the interest of our policyholders.
Most of our investments are in bonds and a smaller proportion in shares. The actual return from our fund is quite different from the short term interest rate offered by the banks.
Generally, when the market interest rate has increased, we should see an increase in the return from our fund, but the increase will apply only to the portion of the fund that has not yet been invested. The impact will be smaller than the actual increase in the interest rate.
In recent years, we have increased our bonus rates on the growth policy to reflect the better return from our fund. Our growth policy still provide an attractive return, compared to other investments.
I hope that you understand and accept my explanation.
She saw that the short term interest rate has increased in recent months, and asked this question: currently, market interest rate is high, about 3.45%,are we adjusting
our returns to be comparable with the market?
Here is my explantion:
Dear
When a policyholder invest in the growth policy, we promise the guaratneed sum assured and a bonus that will vary accordign to the actual return from the investments in the fund.
We have to invest the money to achieve an attractive long term rate of return, but in safe investments. This is done in the interest of our policyholders.
Most of our investments are in bonds and a smaller proportion in shares. The actual return from our fund is quite different from the short term interest rate offered by the banks.
Generally, when the market interest rate has increased, we should see an increase in the return from our fund, but the increase will apply only to the portion of the fund that has not yet been invested. The impact will be smaller than the actual increase in the interest rate.
In recent years, we have increased our bonus rates on the growth policy to reflect the better return from our fund. Our growth policy still provide an attractive return, compared to other investments.
I hope that you understand and accept my explanation.
Tuesday, August 01, 2006
Culture of Openness and Transparency
FROM POLICYHOLDER TO MY MANAGER WHO ATTENDED TO HIS REQUEST
I am also taking this opportunity to thank Mr Tan KL for his immediate response.
I wish to let him know that his "tankinlian.blogspot.com" website provides useful information of general interest in allowing persons (not only policyholders) to air their views on Income's business practices, and also allowing for policyholders to air their grievances, if any.
This culture of openness and transparency is not usually found wanting in general when financial institutions market their insurance and investment products.
Income has been very successful in its short history (compared with other older insurers) and its business practices are very focused on consumer interests and protection. It has shown itself to be a good corporate citizen in its support of the arts and sports (especially the huge financial support for the sleague to ensure its success).
I am also taking this opportunity to thank Mr Tan KL for his immediate response.
I wish to let him know that his "tankinlian.blogspot.com" website provides useful information of general interest in allowing persons (not only policyholders) to air their views on Income's business practices, and also allowing for policyholders to air their grievances, if any.
This culture of openness and transparency is not usually found wanting in general when financial institutions market their insurance and investment products.
Income has been very successful in its short history (compared with other older insurers) and its business practices are very focused on consumer interests and protection. It has shown itself to be a good corporate citizen in its support of the arts and sports (especially the huge financial support for the sleague to ensure its success).
Monday, July 31, 2006
This customer prefer to come to Business Center
Dear Mr Tan
I like this new way of seeking information from NTUC product specialist instead of an agent serving me. Agents tend to push products which earn them more commission than needed for me - the client. Agents are only good if they are my personal friend who truly care for me.
Unfortunately I've no such 'friends' with NTUC Income despite all my insurance policies are with Income.
Your specialist has been prompt in answering my questions about enhanced incomeshield and plus rider even over weekends.
All his answers to my queries are clear and now I can go ahead to change my incomeshield and add the plus rider. I really appreciate his service.
I like this new way of seeking information from NTUC product specialist instead of an agent serving me. Agents tend to push products which earn them more commission than needed for me - the client. Agents are only good if they are my personal friend who truly care for me.
Unfortunately I've no such 'friends' with NTUC Income despite all my insurance policies are with Income.
Your specialist has been prompt in answering my questions about enhanced incomeshield and plus rider even over weekends.
All his answers to my queries are clear and now I can go ahead to change my incomeshield and add the plus rider. I really appreciate his service.
Customer enjoy our educational talks
Hello Mr Tan,
Just a little note to say thank you for all those informative educational seminars. I have been an income policyholder since 1984 and have had also bought several other policies since then.
I still remember the pighead story which you shared with the audience during one of your talks quite some time back. Not to worry as the good will always truimphs the evil! It always reminded me of the "sloggy" and "suspicious" counterclaims for my car insurance way back.
Thanks again for your busy time. Most of the time, when I prefer to buy insurance from Income, mainly due to your leadership for the co-operative.
Just a little note to say thank you for all those informative educational seminars. I have been an income policyholder since 1984 and have had also bought several other policies since then.
I still remember the pighead story which you shared with the audience during one of your talks quite some time back. Not to worry as the good will always truimphs the evil! It always reminded me of the "sloggy" and "suspicious" counterclaims for my car insurance way back.
Thanks again for your busy time. Most of the time, when I prefer to buy insurance from Income, mainly due to your leadership for the co-operative.
Travel insurance covers loss due to closure of agency
Editor
Today Paper
We refer to your article, "Ananda suspends business, settles refunds", (TODAY, 26 Jul).
Travellers are encouraged to take up travel insurance plans whenever they go overseas to protect themselves against any unpleasant circumstances that might arise as has happened in this case.
People tend to buy travel insurance at the last minute, before departure. We advise that travel insurance should be activated as soon as the deposit is paid, as most comprehensive travel insurance would have a trip cancellation benefit. The premium is the same regardless of when the purchase was made.
This benefit covers the non-refundable portion of all travel costs prepaid in advance should the trip be cancelled due to circumstances stated in the policy terms. For example, serious illness or injury sustained by the traveler or his family members or bankruptcy or insolvency of the travel agent or airline.
NTUC Income's travel insurance covers up to as much as $10,000 for trip cancellation. To provide better peace of mind for policyholders, our affordable yet comprehensive travel insurance plans also cover terrorism and natural disasters such as earthquakes, tsunami and floods. Cover can be activated immediately with simple phone call to our hotline at 96INCOME (9646 2663).
Regular travelers, including those who make frequent trips to Johore and Batam, may also find it more economical to take up annual plans.
More information can be obtained from our website, www.income.coop/insurance/travel.
Freddy Neo
General Manager
Today Paper
We refer to your article, "Ananda suspends business, settles refunds", (TODAY, 26 Jul).
Travellers are encouraged to take up travel insurance plans whenever they go overseas to protect themselves against any unpleasant circumstances that might arise as has happened in this case.
People tend to buy travel insurance at the last minute, before departure. We advise that travel insurance should be activated as soon as the deposit is paid, as most comprehensive travel insurance would have a trip cancellation benefit. The premium is the same regardless of when the purchase was made.
This benefit covers the non-refundable portion of all travel costs prepaid in advance should the trip be cancelled due to circumstances stated in the policy terms. For example, serious illness or injury sustained by the traveler or his family members or bankruptcy or insolvency of the travel agent or airline.
NTUC Income's travel insurance covers up to as much as $10,000 for trip cancellation. To provide better peace of mind for policyholders, our affordable yet comprehensive travel insurance plans also cover terrorism and natural disasters such as earthquakes, tsunami and floods. Cover can be activated immediately with simple phone call to our hotline at 96INCOME (9646 2663).
Regular travelers, including those who make frequent trips to Johore and Batam, may also find it more economical to take up annual plans.
More information can be obtained from our website, www.income.coop/insurance/travel.
Freddy Neo
General Manager
Is it possible to buy direct and enjoy a bigger discount?
A visitor read my blog that the commission rates paid to our advisers are 30% to 50% lower than the market. He asked if it is possible to buy directly from NTUC Income and get a further discount?
MY REPLY:
Our premium rates are already much lower than the market for similar products. This is possible due to the lower commission rates paid to our adviser.
If you come directly to us, we still need to pay the salary of the consultants at our business center. This is barely covered by the savings in the commission. So, we are not able to give a further discount.
If we are able to enjoy further savings, we will use the savings to give a better return to all policyholders, through higher reversionary bonuses.
Some customers are willing to come to the business center for the same premium, as they feel more comfortable about talking to a salaried consultant. They do not feel under pressure to buy the product.
Actually, our advisers are also not pushy. They are willing to give advice to customers by e-mail and telephone, and to refer them to the internet website for information. This is just as good as visiting the business center.
MY REPLY:
Our premium rates are already much lower than the market for similar products. This is possible due to the lower commission rates paid to our adviser.
If you come directly to us, we still need to pay the salary of the consultants at our business center. This is barely covered by the savings in the commission. So, we are not able to give a further discount.
If we are able to enjoy further savings, we will use the savings to give a better return to all policyholders, through higher reversionary bonuses.
Some customers are willing to come to the business center for the same premium, as they feel more comfortable about talking to a salaried consultant. They do not feel under pressure to buy the product.
Actually, our advisers are also not pushy. They are willing to give advice to customers by e-mail and telephone, and to refer them to the internet website for information. This is just as good as visiting the business center.
Sunday, July 30, 2006
FAQ: The Right Insurance Plan
1. Why is it important to have life assurance?
Life is uncertain. If anything unexpected happens to you, life insurance can provide a sum of money to take care of the financial needs of your family.
You can also use life insurence to make savings for your future needs, for example, after your retire from work.
2. Who should I buy it from?
You can buy life insurance from any of more than a dozen companies. But, we recommend that you buy it from NTUC Income.
NTUC Income is a cooperative society. We keep our cost low and pay a smaller share of profits to shareholders. This allows our policyholders to pay a lower premium and can enjoy a higher return on your savings.
Many of our policyholders find that the payout from NTUC Income on the maturity of their insurance policy is 10% to 20% higher than similar products from other insurance companies. If the payout is $100,000, the difference can be more than $10,000. That is a lot of money.
3. What is the right life insurance plan?
It depends on your financial situation and your needs.
For most young people, their need is to have financial security for the family and to make additional savings for their future. A whole life or endowment policy is more suitable for them.
For older people, their need is to earn a higher return on their cash and CPF savings. They can invest in a fund to earn a higher return. But they have to be aware of the risk and learn how to turn risk into an advantage.
They also need insurance to pay for their medical bills and to cover losses due to accidents and other risks.
An insurance adviser can help you.
4. How do I find an adviser?
You can call 6877 3366, if you wish to have an insurance adviser to see you in your home.
You can also visit our business center at Bras Basah Road or Tampines Point to talk to our salaried consultant.
5. Can I get more information, without seeing an adviser?
You can visit our website at www.income.coop. It contains a lot of information about our products and services. You will find it easy to search for the information that you need. About 10,000 people visit our website daily.
You can also visit an educational website called www.knowyourinsurance.com.sg. You can spend 20 minutes to learn about a common insurance products and to take a simple test. About 300 people visit daily.
You can visit this website to see a comparison of financial products: www.askdrmoney.com.
You can also attend an educational talk conducted very week. Call 6877 3366.
Life is uncertain. If anything unexpected happens to you, life insurance can provide a sum of money to take care of the financial needs of your family.
You can also use life insurence to make savings for your future needs, for example, after your retire from work.
2. Who should I buy it from?
You can buy life insurance from any of more than a dozen companies. But, we recommend that you buy it from NTUC Income.
NTUC Income is a cooperative society. We keep our cost low and pay a smaller share of profits to shareholders. This allows our policyholders to pay a lower premium and can enjoy a higher return on your savings.
Many of our policyholders find that the payout from NTUC Income on the maturity of their insurance policy is 10% to 20% higher than similar products from other insurance companies. If the payout is $100,000, the difference can be more than $10,000. That is a lot of money.
3. What is the right life insurance plan?
It depends on your financial situation and your needs.
For most young people, their need is to have financial security for the family and to make additional savings for their future. A whole life or endowment policy is more suitable for them.
For older people, their need is to earn a higher return on their cash and CPF savings. They can invest in a fund to earn a higher return. But they have to be aware of the risk and learn how to turn risk into an advantage.
They also need insurance to pay for their medical bills and to cover losses due to accidents and other risks.
An insurance adviser can help you.
4. How do I find an adviser?
You can call 6877 3366, if you wish to have an insurance adviser to see you in your home.
You can also visit our business center at Bras Basah Road or Tampines Point to talk to our salaried consultant.
5. Can I get more information, without seeing an adviser?
You can visit our website at www.income.coop. It contains a lot of information about our products and services. You will find it easy to search for the information that you need. About 10,000 people visit our website daily.
You can also visit an educational website called www.knowyourinsurance.com.sg. You can spend 20 minutes to learn about a common insurance products and to take a simple test. About 300 people visit daily.
You can visit this website to see a comparison of financial products: www.askdrmoney.com.
You can also attend an educational talk conducted very week. Call 6877 3366.
Insurance Adviser wish to return to NTUC Income
Dear Mr Tan Kin Lian,
I shall be very grateful if you could approve my application for the post of an Organizer with NTUC INCOME.
I was with NTUC INCOME from .... to ..... as a Development Officer and moved over to .... to be a FA representative in Aug 2004. Prior to joining NTUC INCOME, I was with another insurance company from 4 years. In all, I have more than 17 years of experience in the insurance industry.
Sir, please give me an opportunity to come back and work as an Organizer.
MY REPLY
We welcome you back. My colleague will contact you.
I shall be very grateful if you could approve my application for the post of an Organizer with NTUC INCOME.
I was with NTUC INCOME from .... to ..... as a Development Officer and moved over to .... to be a FA representative in Aug 2004. Prior to joining NTUC INCOME, I was with another insurance company from 4 years. In all, I have more than 17 years of experience in the insurance industry.
Sir, please give me an opportunity to come back and work as an Organizer.
MY REPLY
We welcome you back. My colleague will contact you.
Happy birthday - Time to review your investments!
QUESTION:
Hi Tan,
A big "Thank you" for the Birthday Wishes.
Who is the best in your team to teach me about various Unit Trust Fees structures in the Market ( like monthly Wrap Fees etc., ) ... also looking for some comparative note on how various Financial Investments companies operating here .. ( for example dollar-dex, fundsupermarket, IFAST, NTUC Income etc., ).
It is lovely, when I forget all birthdays, including my own, to find that somebody remembers me.
~Ellen Glasgow
MY REPLY:
Dear
Here are some links that you will find useful:
http://www.askdrmoney.com
http://www.income.coop/fund/coopprices.asp
www.tankinlian.blogspot.com
I will ask ........ to contact and advise you.
Hi Tan,
A big "Thank you" for the Birthday Wishes.
Who is the best in your team to teach me about various Unit Trust Fees structures in the Market ( like monthly Wrap Fees etc., ) ... also looking for some comparative note on how various Financial Investments companies operating here .. ( for example dollar-dex, fundsupermarket, IFAST, NTUC Income etc., ).
It is lovely, when I forget all birthdays, including my own, to find that somebody remembers me.
~Ellen Glasgow
MY REPLY:
Dear
Here are some links that you will find useful:
http://www.askdrmoney.com
http://www.income.coop/fund/coopprices.asp
www.tankinlian.blogspot.com
I will ask ........ to contact and advise you.
Saturday, July 29, 2006
Agent ask about our commission rates
QUESTION:
Mr Tan. I am an agent of .... I read your blog about migrating to NTUC Income. I understand that your commission rate is lower than my company. Why should I move over?
MY REPLY:
Our commision rate is about 30% to 50% lower than other insurance companies. This allows us to lower the premium to our policyholders and give them a better return on their savings.
Our agents find it easier to sell our products, as customers approach them directly.
We also generate leads from existing customers to give to our agents. This helps our agents to reduce the time taken to close a sale. Some of the sales can be done through the telephone, without a visit.
Most of our agents are able to close 2 or 3 times the volume of sales. They can earn a higher income.
They can also face their customers in the future and say, "I offered you a good product that gives a better return to you".
Several agents who have migrated to NTUC Income are now our champion producers. Previously, when the worked for their previous company, they could hardly meet the sales quota.
Mr Tan. I am an agent of .... I read your blog about migrating to NTUC Income. I understand that your commission rate is lower than my company. Why should I move over?
MY REPLY:
Our commision rate is about 30% to 50% lower than other insurance companies. This allows us to lower the premium to our policyholders and give them a better return on their savings.
Our agents find it easier to sell our products, as customers approach them directly.
We also generate leads from existing customers to give to our agents. This helps our agents to reduce the time taken to close a sale. Some of the sales can be done through the telephone, without a visit.
Most of our agents are able to close 2 or 3 times the volume of sales. They can earn a higher income.
They can also face their customers in the future and say, "I offered you a good product that gives a better return to you".
Several agents who have migrated to NTUC Income are now our champion producers. Previously, when the worked for their previous company, they could hardly meet the sales quota.
Kind remark from a visitor
I receive this kind remark from a visitor who read by blog.
Mr Tan,
I am surprised that, as you CEO, you are willing to attend to questions from your customers.
I read your blog about the customer who insist that you attend to his matter, even though the matter can be handled by your colleague.
By being accessible, are you taking the risk that many customers will want to bypass your colleagues and want you to attend to their matter personally? How can you find the time? Is it stressful?
I hope that you can sort out the good from the bad, and still be accessible to your customers to give their suggestions and views.
Mr Tan,
I am surprised that, as you CEO, you are willing to attend to questions from your customers.
I read your blog about the customer who insist that you attend to his matter, even though the matter can be handled by your colleague.
By being accessible, are you taking the risk that many customers will want to bypass your colleagues and want you to attend to their matter personally? How can you find the time? Is it stressful?
I hope that you can sort out the good from the bad, and still be accessible to your customers to give their suggestions and views.
Living policy by limited premiums
Some customers like to take a Whole Life policy that covers 30 dread diseases, and they want to pay their premium for a certain number of years only, ie not for life.
They ask NTUC Income to offer this plan.
We will be introducing this plan in about 3 months time. I have to alert them that the premium will be much higher than a whole life policy.
For example, if you insure $50,000 with premiums payable for life, you may have to pay a premium of about $1,000 (actually, it depends on your age).
If you take a 20 year payment policy, you may have to pay 2 times of the premium, or more. This is due to the shorter premium period.
Alternatively, you can take a smaller policy to fit your budget.
They ask NTUC Income to offer this plan.
We will be introducing this plan in about 3 months time. I have to alert them that the premium will be much higher than a whole life policy.
For example, if you insure $50,000 with premiums payable for life, you may have to pay a premium of about $1,000 (actually, it depends on your age).
If you take a 20 year payment policy, you may have to pay 2 times of the premium, or more. This is due to the shorter premium period.
Alternatively, you can take a smaller policy to fit your budget.
Unemployed workers refuse to work in retail industry
A report in the Straits Times said that there are 70,000 unemployed workers in Singapore, but they do not want to work in the retail industry. The employers have to look for foreign workers.
Why?
I think that they find it difficult to cope with the difficult Singaporean customers. Some customers are quite demanding. They have high and unreasonable expectation of service and are not forgiving of mistakes. It is quite stressful to deal with them.
Many years ago, NTUC Income had difficult to recruit people to work in the frontline to serve customers - i.e. at our call center, service center or branches.
We manage to solve this problem, and are now able to get people to work at these places and to stay there. We still have difficulty, but not as much as other organisations.
What is our strategy? If you are in Human Resource management and are interested to know, send an e-mail to me at tankl@income.coop.
Why?
I think that they find it difficult to cope with the difficult Singaporean customers. Some customers are quite demanding. They have high and unreasonable expectation of service and are not forgiving of mistakes. It is quite stressful to deal with them.
Many years ago, NTUC Income had difficult to recruit people to work in the frontline to serve customers - i.e. at our call center, service center or branches.
We manage to solve this problem, and are now able to get people to work at these places and to stay there. We still have difficulty, but not as much as other organisations.
What is our strategy? If you are in Human Resource management and are interested to know, send an e-mail to me at tankl@income.coop.
A second chance to develop your career in insurance sales
If you have a licence as an insurance agent, and you find it difficult to meet the sales quote of your company, maybe you should migrate to NTUC Income. We give you a second chance to develop your career in insurance sales.
Here is how we are different:
* we generate leads from our 500,000 direct customers
* we offer value products, ie lower premium and better return
* many products can be sold over the telephone
If you are interested to try this "marketing of the future", you can call 6877 3366.
Here is how we are different:
* we generate leads from our 500,000 direct customers
* we offer value products, ie lower premium and better return
* many products can be sold over the telephone
If you are interested to try this "marketing of the future", you can call 6877 3366.
Replies to comments posted in my blog
A few visitors posted comments that disagree with me. Some of the comments are quite personal and uncalled for. I will leave them in my blog for other people to make their own judgement.
If anyone wish to ask a specific question that is important to you, please send an e-mail to me at tankl@income.coop. I will answer them myself or get my colleague to reply to you.
Some of the people who posted their comments obviously work for my competitors. They are agents of other insurance companies or financial advisers marketing unit trusts. They argue that their products are better. Maybe, they are right. I will let the customers make their own judgement.
Some unit trusts are available at no front end charge. But, you have to be careful about their annual fee. It may be 1.5% or 2%. They may also have trailer charge. So, you just have to make sure that you have the correct comparison.
You can also visit Dr Money's website, at www.askdrmoney.com. He makes a comparison of the charges of unit trusts and insurance funds.
All the best.
If anyone wish to ask a specific question that is important to you, please send an e-mail to me at tankl@income.coop. I will answer them myself or get my colleague to reply to you.
Some of the people who posted their comments obviously work for my competitors. They are agents of other insurance companies or financial advisers marketing unit trusts. They argue that their products are better. Maybe, they are right. I will let the customers make their own judgement.
Some unit trusts are available at no front end charge. But, you have to be careful about their annual fee. It may be 1.5% or 2%. They may also have trailer charge. So, you just have to make sure that you have the correct comparison.
You can also visit Dr Money's website, at www.askdrmoney.com. He makes a comparison of the charges of unit trusts and insurance funds.
All the best.
Friday, July 28, 2006
Policyholder invest $50,000 on his birthday
My insurance adviser told this story.
Quote:
I called my policyholder this morning at 10 am to wish Happy Birthday. I was surprised. My policyholder told me that my CEO is earlier than me. He SMS the policyholder at 8 am to wish him Happy Birthday.
Because of my CEO's message, my policyholder wanted to invest an additional $50000 in our Combined Growth Fund.
Quote:
I called my policyholder this morning at 10 am to wish Happy Birthday. I was surprised. My policyholder told me that my CEO is earlier than me. He SMS the policyholder at 8 am to wish him Happy Birthday.
Because of my CEO's message, my policyholder wanted to invest an additional $50000 in our Combined Growth Fund.
Why do your colleagues block e-mails to the CEO?
A policyholder asked why my colleagues block e-mails to the CEO. Here is my reply:
Dear
You ask why emails to me are blocked by my colleagues. Normally, my colleagues attend to the routine matters, and will refer to me only those matters that need my attention.
Even if your e-mail does reach me, I am not able to answer specifically the questions that you have raised, and will need to refer them to my colleagues who handles them anyway.
You were unhappy about the delay in responding to your request for upgrading.
During this period, my colleagues are overwhelmed by 60,000 requests for upgrading into the Enhanced Incomeshield plan. This has caused a lot of backlog with its own set of problems. As they are highly stressed, there is some delay and drop in standard of service. Please accept our apology.
Dear
You ask why emails to me are blocked by my colleagues. Normally, my colleagues attend to the routine matters, and will refer to me only those matters that need my attention.
Even if your e-mail does reach me, I am not able to answer specifically the questions that you have raised, and will need to refer them to my colleagues who handles them anyway.
You were unhappy about the delay in responding to your request for upgrading.
During this period, my colleagues are overwhelmed by 60,000 requests for upgrading into the Enhanced Incomeshield plan. This has caused a lot of backlog with its own set of problems. As they are highly stressed, there is some delay and drop in standard of service. Please accept our apology.
Monday, July 24, 2006
Customer prefer to insure with NTUC Income
FROM CUSTOMER
Hi Mr Tan,
I am a policyholder of Income's Living Policy.
Recently, I found out that there is a kind of insurance policy that provides the same whole life coverage as Living Policy, but which requires policholders to pay the premium for a limited period only (e.g. 20 years).
Your staff has told me that Income has a similar policy known as Protection AD. However, Protection AD DOES NOT PAY the Sum Assured upon diagnosis of the 30 Dreaded Diseases.
I wonder if Income is planning to launch such a whole-life-but-term-payment insurance policy?
MY REPLY
We intend to launch a similar product in three months time. It will give better value to our customers, compared to similar products in the market. I will ask my colleague to send you some detail in 1 month's time, when our premium rates and yield to maturity are available.
FROM CUSTOMER
Dear Mr Tan,
Thank you very much for your prompt reply! I am delighted to hear this piece of good news!
I had actually bought Asia LifeSecure, but I cancelled it during the free-look period; I was hoping that Income would launch a similar product but with a more affordable premium.
Hi Mr Tan,
I am a policyholder of Income's Living Policy.
Recently, I found out that there is a kind of insurance policy that provides the same whole life coverage as Living Policy, but which requires policholders to pay the premium for a limited period only (e.g. 20 years).
Your staff has told me that Income has a similar policy known as Protection AD. However, Protection AD DOES NOT PAY the Sum Assured upon diagnosis of the 30 Dreaded Diseases.
I wonder if Income is planning to launch such a whole-life-but-term-payment insurance policy?
MY REPLY
We intend to launch a similar product in three months time. It will give better value to our customers, compared to similar products in the market. I will ask my colleague to send you some detail in 1 month's time, when our premium rates and yield to maturity are available.
FROM CUSTOMER
Dear Mr Tan,
Thank you very much for your prompt reply! I am delighted to hear this piece of good news!
I had actually bought Asia LifeSecure, but I cancelled it during the free-look period; I was hoping that Income would launch a similar product but with a more affordable premium.
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