There has been several attacks against insurance agents of NTUC Income. These attacks are unfair.
I know many of these agents personally. They are people who work hard to make a living. They are willing to earn lower commission rates (compared to the market) to bring good value products to the policyholders. They believe in the cooperative principles.
Some of these agents tell me that they continue to sell the good value products that were introduced in past years. They include life annuity, flexi-link, ideal (ID7), family insurance and term insurance products. These products offer good value, compared to similar, high cost products that are being sold in the market.
As the agents earn low commission on the sale of these products, the customer should make it easy for them to close the sale with minimal effort.
Some people criticised these agents to be "product pushers". It is all right to recommend specific products that give good value and are suitable for the ordinary families. These products do not need a complicated and time consuming "needs analysis".
I hope that the general public will continue to support these agents, so that it is possible for them to offer good value products for the benefit of policyholders.
Monday, May 5, 2008
AGM of NTUC Income
I hope that many policyholders will attend the annual general meeting of NTUC Income, to be held at 6 pm on 30 May at the auditorium of NTUC Income Center in Bras Basah Road. I will be attending to bring up the issue of the bonus cut.
To attend, you have to be a life policyholder or shareholder. You can call the cooperative secretary and ask for a pass to be sent to you.
To attend, you have to be a life policyholder or shareholder. You can call the cooperative secretary and ask for a pass to be sent to you.
Lack of reply to a letter
Good morning Tan Kin Lian
I read this morning's media report regarding your dissatisfaction with NTUC Income policy.
A few months prior to your retirement, I had the occasion to formally write to you as I wasn't satisfied with an NTUC policy which I had taken up. I did not receive even the courtesy of a response nor a simple acknowledgment of my correspondence.That to me was sheer rudeness let alone gross discourtesy to a customer.
Don't bite the hands that fed you. You know the system well . If dissatisfied, please go somewhere else, probably Russia, where, perhaps, you will find greater justice and fairplay
JL
REPLY
I normally reply to letters that are sent to me. It could have been misplaced. The other remarks in your letter are unnecessary.
I read this morning's media report regarding your dissatisfaction with NTUC Income policy.
A few months prior to your retirement, I had the occasion to formally write to you as I wasn't satisfied with an NTUC policy which I had taken up. I did not receive even the courtesy of a response nor a simple acknowledgment of my correspondence.That to me was sheer rudeness let alone gross discourtesy to a customer.
Don't bite the hands that fed you. You know the system well . If dissatisfied, please go somewhere else, probably Russia, where, perhaps, you will find greater justice and fairplay
JL
REPLY
I normally reply to letters that are sent to me. It could have been misplaced. The other remarks in your letter are unnecessary.
Guts and honour
Mr. Tan,
I have read the postings in your blog and news reports about your campaign to get NTUC Income to reverse its decision to cut policyholders' annual bonus.
Objectively, you are doing the right thing. I applaud you for doing it inspite of some criticisms that you are like Mahathir, i.e doing it out of bitterness. Far from it. Those who read your blog know that you have always been objective. When NTUC Income was doing the right things, you applauded the actions. You also recommended NTUC Income's products that were truly superior to products from other financial institutions. Now that NTUC Income is doing the wrong thing, it is only right that you speak. This is what I really call guts and honour.
The guts to speak up when things are not right. I see you in mould of ex-US President Jimmy Carter, somebody with conviction and honour. He don't care what President George Bush thinks as long as he knows that he is doing the right thing. He has the guts to speak to Kim Jong Il and the Hamas leaders even when the US Government boycotted these leaders.
NTUC Income's action is wrong for two reasons. Firstly, it cannot cut the annual bonus (which is guaranteed and vest in the policyholders) unilaterally of existing policies. It cannot just say that it will give a higher terminal (or special) bonus when this bonus is not guaranteed. If the funds are not doing well at the points when the policies mature or are surrendered, some policyholders may well get no terminal bonus.
NTUC Income cannot say these is what commercial insurers do. It is precisely because policyholders want a higher annual bonus that they bought from NTUC Income and not from the commercial companies.
Secondly, NTUC Income cannot say that they hold the money back because they will invest for policyholders and they might get higher returns at the end. As they say, "a bird in the hand is worth two in the bush". The higher return is dependent on various contingencies which may never materialise.
I take NTUC Income's action as a breach of promise to policyholders and in bad faith.
N
I have read the postings in your blog and news reports about your campaign to get NTUC Income to reverse its decision to cut policyholders' annual bonus.
Objectively, you are doing the right thing. I applaud you for doing it inspite of some criticisms that you are like Mahathir, i.e doing it out of bitterness. Far from it. Those who read your blog know that you have always been objective. When NTUC Income was doing the right things, you applauded the actions. You also recommended NTUC Income's products that were truly superior to products from other financial institutions. Now that NTUC Income is doing the wrong thing, it is only right that you speak. This is what I really call guts and honour.
The guts to speak up when things are not right. I see you in mould of ex-US President Jimmy Carter, somebody with conviction and honour. He don't care what President George Bush thinks as long as he knows that he is doing the right thing. He has the guts to speak to Kim Jong Il and the Hamas leaders even when the US Government boycotted these leaders.
NTUC Income's action is wrong for two reasons. Firstly, it cannot cut the annual bonus (which is guaranteed and vest in the policyholders) unilaterally of existing policies. It cannot just say that it will give a higher terminal (or special) bonus when this bonus is not guaranteed. If the funds are not doing well at the points when the policies mature or are surrendered, some policyholders may well get no terminal bonus.
NTUC Income cannot say these is what commercial insurers do. It is precisely because policyholders want a higher annual bonus that they bought from NTUC Income and not from the commercial companies.
Secondly, NTUC Income cannot say that they hold the money back because they will invest for policyholders and they might get higher returns at the end. As they say, "a bird in the hand is worth two in the bush". The higher return is dependent on various contingencies which may never materialise.
I take NTUC Income's action as a breach of promise to policyholders and in bad faith.
N
Reply to Today: Cut in Annual Bonus
4 May 2008
Editor
Today Paper
Cut in annual bonus
I refer to your article entitled "Tan Kin Lian, an upset Income customer" (Today, 3 May 2008).
I have two life insurance polices with NTUC Income that are affected by the cut in annual bonus. The reduction in bonus is about 45%. This large cut will apply not just for one year but for every year into the future.
NTUC Income told me that, to compensate for the cut in annual bonus, they will be increasing the terminal bonus (previously called special bonus) payable on surrender, maturity or death. I have now received the scale of terminal bonuses which vary according to duration for my two policies. Each policy has an entirely different scale. They appear to be calculated to be slightly more than sufficient to compensate for the cut in the annual bonus.
I suspect that a different scale of terminal bonus will apply to other policies according to their type and year of entry.
I wish to raise the following issues:
1) How many scales of terminal bonuses will NTUC Income be using for the various policies affected by this cut in the annual bonuses?
2) How will the scales of terminal bonuses be changed in the future, to reflect changes in the investment yield?
3) What are the principles that will be followed to maintain fairness between the policyholders with different entry years and different policy types?
4) To what extent is the higher rate of special bonus guaranteed, as it is intended to compensate for the cut in the annual bonus?
5) Will NTUC Income be prepared to lay out these principles in a transparent manner to be disclosed to all affected policyholders?
6) For policyholders who have suffered a reduction in annual bonuses during the past years, does NTUC Income intend to use some of the exceptional
surplus in 2007 to pay additional bonuses to policyholders to make good their shortfall (as compared to the bonuses that were projected at the time of taking up the policies)?
7) Will NTUC Income give an option for policyholders to remain on the old bonus structure, if they do not accept the change to the new bonus structure?
When the policies were sold, each policyholder was given a benefit illustration showing how the future bonuses would be distributed. While the actual bonuses were not guaranteed, I expect that NTUC Income would honour the underlying promise to distribute the bonuses in the manner that was illustrated.
My personal preference is to stay with the old bonus structure, as it is more transparent and a higher proportion of the bonus is vested each year.
I do not like the new bonus structure as the terminal bonus can be withdrawn in the future. I am also less confident of getting a higher payout, if the investment yield improves.
I believe that this unilateral change is to the detriment of the policyholders. It contravenes the "reasonable expectation" of the policyholders. Many policyholders have written to me on this matter, as I was the former chief executive of NTUC Income. I consider it my duty to voice their concerns.
I suggest that NTUC Income should reverse the bonus cut and restore the bonus to at least the same level as for the previous year. In fact, the policyholders expect a higher annual bonus, due to the high investment yield achieved in 2007. It is disappointing to see the cut in bonus when the investment results justify an increase.
Tan Kin Lian
Editor
Today Paper
Cut in annual bonus
I refer to your article entitled "Tan Kin Lian, an upset Income customer" (Today, 3 May 2008).
I have two life insurance polices with NTUC Income that are affected by the cut in annual bonus. The reduction in bonus is about 45%. This large cut will apply not just for one year but for every year into the future.
NTUC Income told me that, to compensate for the cut in annual bonus, they will be increasing the terminal bonus (previously called special bonus) payable on surrender, maturity or death. I have now received the scale of terminal bonuses which vary according to duration for my two policies. Each policy has an entirely different scale. They appear to be calculated to be slightly more than sufficient to compensate for the cut in the annual bonus.
I suspect that a different scale of terminal bonus will apply to other policies according to their type and year of entry.
I wish to raise the following issues:
1) How many scales of terminal bonuses will NTUC Income be using for the various policies affected by this cut in the annual bonuses?
2) How will the scales of terminal bonuses be changed in the future, to reflect changes in the investment yield?
3) What are the principles that will be followed to maintain fairness between the policyholders with different entry years and different policy types?
4) To what extent is the higher rate of special bonus guaranteed, as it is intended to compensate for the cut in the annual bonus?
5) Will NTUC Income be prepared to lay out these principles in a transparent manner to be disclosed to all affected policyholders?
6) For policyholders who have suffered a reduction in annual bonuses during the past years, does NTUC Income intend to use some of the exceptional
surplus in 2007 to pay additional bonuses to policyholders to make good their shortfall (as compared to the bonuses that were projected at the time of taking up the policies)?
7) Will NTUC Income give an option for policyholders to remain on the old bonus structure, if they do not accept the change to the new bonus structure?
When the policies were sold, each policyholder was given a benefit illustration showing how the future bonuses would be distributed. While the actual bonuses were not guaranteed, I expect that NTUC Income would honour the underlying promise to distribute the bonuses in the manner that was illustrated.
My personal preference is to stay with the old bonus structure, as it is more transparent and a higher proportion of the bonus is vested each year.
I do not like the new bonus structure as the terminal bonus can be withdrawn in the future. I am also less confident of getting a higher payout, if the investment yield improves.
I believe that this unilateral change is to the detriment of the policyholders. It contravenes the "reasonable expectation" of the policyholders. Many policyholders have written to me on this matter, as I was the former chief executive of NTUC Income. I consider it my duty to voice their concerns.
I suggest that NTUC Income should reverse the bonus cut and restore the bonus to at least the same level as for the previous year. In fact, the policyholders expect a higher annual bonus, due to the high investment yield achieved in 2007. It is disappointing to see the cut in bonus when the investment results justify an increase.
Tan Kin Lian
Prepared to lose the premiums paid
Dear Mr. Tan
I've few policies under NTUC Income which bought many years ago.
Recently in Jan 08, I bought another policy called "VIVOLIFE" for my child aged 12 believing that it provides good returns. Lately, I received a letter from NTUC Income announcing the change of bonuses. I did not fully understand the impact of the changes until reading your blog. I thank you for defending our rights.
I'm contemplating to cancel this new policy. I understand that I'll get nothing if the policy cancel during the 1st year. I'm prepared to lose it and will not support the NTUC in future if they proceed with their unfair policies.
REPLY
Thank for for telling me about this matter.
I've few policies under NTUC Income which bought many years ago.
Recently in Jan 08, I bought another policy called "VIVOLIFE" for my child aged 12 believing that it provides good returns. Lately, I received a letter from NTUC Income announcing the change of bonuses. I did not fully understand the impact of the changes until reading your blog. I thank you for defending our rights.
I'm contemplating to cancel this new policy. I understand that I'll get nothing if the policy cancel during the 1st year. I'm prepared to lose it and will not support the NTUC in future if they proceed with their unfair policies.
REPLY
Thank for for telling me about this matter.
Is there room for welfare in Singapore?
Comment posted in my blog (edited)
I talked to a Taiwanese friend who works for a Taiwan multi-national company. I commented about the government policy that allowed too many foreign workers aimed at the cost-competitiveness of the country. This has indirectly resulted in older workers not being able to find jobs or have to compete with low-paying foreign workers who feed a family in his home country of lower standard of living. I opined that maybe the government policy should be tightened.
She was surprised to hear my views, and offered another perspective. The use of foreign workers is unavoidable, and is part of globalisation. It is happening in many countries, e.g. Australia, Taiwan, Malaysia and Europe. Even at the specialist level, the substitution of local labour with cheaper foreign labour is unavoidable.
The key is whether the government have instituted enough social welfare policies to help the population in times of needs and defray their cost as much as possible. For example, the Taiwanese government has a very comprehensive medical care program for all her citizens. The cost of medical is low as it is subsidised heavily. She finds Singapore's medical expenses ridiculous and wondered how the poor would be able to afford it.
In Taiwan and Australia, the government have entrusted itself to take care of all her citizens who have contributed all their life to the good of the country. In Singapore, we call these welfare states as being unsustainable. But is it really that way? Have we looked at it seriously?
How is it that an insurance company can operate profitably to insure and take care of the ill and sick. Why is it that the government cannot risk pool effectively with the economy of scale for four million population that are compulsory customers of the national medical program?
Maybe it is timely to relook at the assumption that heavily subsidized medical or social welfare policies are not sustainable for a country like Singapore. Has the assumption changed from the time when Singapore was still a developing country, to the present time when Singapore is growing with all its might, investing billions into other countries.
We can use our surpluses to help Singaporeans to tide over in times of need. Would it be possible to just take out a tiny 0.5% of the budget allocated to GIC to achieve a program that can help create a sustainable health care system or other social policies?
Perhaps the other political parties can add value and suggest alternatives - instead of just critisizing the government. Sadly, the other political parties are lacking in substance and I would not entrust my future with them.
Someone said, "To enter politics, a leader must have passion. He wants to shape the destiny of the country and improve the lives and standard of living of people. He also wants to have a place in history of good things he has done for the country and people. "
I talked to a Taiwanese friend who works for a Taiwan multi-national company. I commented about the government policy that allowed too many foreign workers aimed at the cost-competitiveness of the country. This has indirectly resulted in older workers not being able to find jobs or have to compete with low-paying foreign workers who feed a family in his home country of lower standard of living. I opined that maybe the government policy should be tightened.
She was surprised to hear my views, and offered another perspective. The use of foreign workers is unavoidable, and is part of globalisation. It is happening in many countries, e.g. Australia, Taiwan, Malaysia and Europe. Even at the specialist level, the substitution of local labour with cheaper foreign labour is unavoidable.
The key is whether the government have instituted enough social welfare policies to help the population in times of needs and defray their cost as much as possible. For example, the Taiwanese government has a very comprehensive medical care program for all her citizens. The cost of medical is low as it is subsidised heavily. She finds Singapore's medical expenses ridiculous and wondered how the poor would be able to afford it.
In Taiwan and Australia, the government have entrusted itself to take care of all her citizens who have contributed all their life to the good of the country. In Singapore, we call these welfare states as being unsustainable. But is it really that way? Have we looked at it seriously?
How is it that an insurance company can operate profitably to insure and take care of the ill and sick. Why is it that the government cannot risk pool effectively with the economy of scale for four million population that are compulsory customers of the national medical program?
Maybe it is timely to relook at the assumption that heavily subsidized medical or social welfare policies are not sustainable for a country like Singapore. Has the assumption changed from the time when Singapore was still a developing country, to the present time when Singapore is growing with all its might, investing billions into other countries.
We can use our surpluses to help Singaporeans to tide over in times of need. Would it be possible to just take out a tiny 0.5% of the budget allocated to GIC to achieve a program that can help create a sustainable health care system or other social policies?
Perhaps the other political parties can add value and suggest alternatives - instead of just critisizing the government. Sadly, the other political parties are lacking in substance and I would not entrust my future with them.
Someone said, "To enter politics, a leader must have passion. He wants to shape the destiny of the country and improve the lives and standard of living of people. He also wants to have a place in history of good things he has done for the country and people. "
Buy unit trusts with Fundsupermart
Fundsupermart charges 1.75% for the upfront fee to invest in the unit trusts in a RSP (i.e. regular savings plan). This is a low fee, as it is less than 3% that is being charged by most other unit trusts and investment-linked funds. 100% of the monthly savings is invested, compared to low "allocation rates" that take away more than 18 months of savings by an ILP policy.
I spoke to the Fundsupermart personnel who told me the following:
> I can invest cash or CPF savings
> The payments are done automatically, after the authorisation has been signed
> There are no additional charges
This sounds like a good way to make long term investment. I will arrange for all members of my family to visit the Fundsupermart office to sign the forms to open the accounts, bank authorisation, etc. They can have $x of monthly investment deducted from my bank account.
They can learn how to manage their accounts through the internet. By educating them, they will be able to manage the investments in unit trusts on their own in the future.
The next step is to decide on how to choose the unit trusts. I shall be looking at the following:
> well diversified
> invested mostly in blue chips
> low expense ratio (less than 1.3% p.a.)
If you have any tips, please send to kinlian@gmail.com. This will save me from making detailed research.
I believe that DollarDex and POEMS may have similarly attractive offers. If they send some details to me, I shall post them in this website.
I spoke to the Fundsupermart personnel who told me the following:
> I can invest cash or CPF savings
> The payments are done automatically, after the authorisation has been signed
> There are no additional charges
This sounds like a good way to make long term investment. I will arrange for all members of my family to visit the Fundsupermart office to sign the forms to open the accounts, bank authorisation, etc. They can have $x of monthly investment deducted from my bank account.
They can learn how to manage their accounts through the internet. By educating them, they will be able to manage the investments in unit trusts on their own in the future.
The next step is to decide on how to choose the unit trusts. I shall be looking at the following:
> well diversified
> invested mostly in blue chips
> low expense ratio (less than 1.3% p.a.)
If you have any tips, please send to kinlian@gmail.com. This will save me from making detailed research.
I believe that DollarDex and POEMS may have similarly attractive offers. If they send some details to me, I shall post them in this website.
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