Dear Mr. Tan,
NTUC Income has reduced the annual bonus and increase the special bonus. Is the special bonus guaranteed? Can the special bonus be reduced in the future? Can I trust NTUC Income to honour the special bonus that is being projected now?
REPLY
The special bonus is not guaranteed. It can be taken away at any time. This has happened in the case of other life insurance companies. When they reduce the special bonus, the impact on the policyholder is very severe.
It is better to have a high rate of annual bonus, rather than a high rate of special bonus. An annual bonus is vested in each year as it is declared, and cannot be taken away. A special bonus does not vest until the time of claim.
In the past years, NTUC Income has a fixed rate of 25% for special bonus. As this is a uniform fixed rate, it has honoured it for the past 20 over years.
In the future, the special bonus is not an uniform rate, and may vary according to type of policy and duration. You can never be sure that you are getting a fair share of the special bonus, especially when the investment climate changes.
If you do not accept this change, you can lodge a complaint to MAS. This is a fundamental change of practice, which affects the reasonable expectation of the policyholder. It is important for MAS to ensure that the new practice is done in a manner that is fair to all policyholders, now and in the future.
Sunday, April 27, 2008
Reduce need to commute
PRINTED IN STRAIT TIMES FORUM PAGE ON 26 APRIL 2008
Many cities face a big challenge in handling the large number of people who have to commute to and from work. They contribute to congested roads, crowded buses and trains and long commuting time. Singapore faces the same challenge.
Most of the remedial measures appear to focus on the supply side, that is, build more roads and provide more trains and buses. They take a long time to implement and do not seem to solve the underlying problem The construction works aggravate the problem.
I suggest that attention should be given to new measures to reduce the need for commuting, such as:
> encourage businesses to locate their workplaces in satellite towns
> encourage people to work near their homes, or live near their place of work
> reduce or waive stamp duty on property transactions, for a person who moves to be closer to the place of work
> improve the local transport within a town
If we can reduce the commuting demand significantly, we can make a major contribution to reduce energy consumption, travel time, travel cost and road congestion.
Tan Kin Lian
Many cities face a big challenge in handling the large number of people who have to commute to and from work. They contribute to congested roads, crowded buses and trains and long commuting time. Singapore faces the same challenge.
Most of the remedial measures appear to focus on the supply side, that is, build more roads and provide more trains and buses. They take a long time to implement and do not seem to solve the underlying problem The construction works aggravate the problem.
I suggest that attention should be given to new measures to reduce the need for commuting, such as:
> encourage businesses to locate their workplaces in satellite towns
> encourage people to work near their homes, or live near their place of work
> reduce or waive stamp duty on property transactions, for a person who moves to be closer to the place of work
> improve the local transport within a town
If we can reduce the commuting demand significantly, we can make a major contribution to reduce energy consumption, travel time, travel cost and road congestion.
Tan Kin Lian
When you are over 60
SENT TO ME BY A FRIEND
1. Focus on enjoying people, not on indulging in or accumulating material things.
2. Plan to spend whatever you have saved. You deserve to enjoy it and the few healthy years you have left. Travel if you can afford it. Don't leave anything for your children or loved ones to quarrel about. By leaving anything, you may even cause more trouble when you are gone.
3. Live in the here and now, not in the yesterdays and tomorrows. It is only today that you can handle. Yesterday is gone, tomorrow may not even happen.
4. Enjoy your grandchildren (if you are blessed with any) but don't be their full time baby sitter. You have no moral obligation to take care of them. Don't have any guilt about refusing to baby sit anyone's kids, including your own grand kids. Your parental obligation is to your children. After you have raised them into responsible adults, your duties of child-rearing and babysitting are finished. Let your children raise their own off-springs.
5. Accept physical weakness, sickness and other physical pains. It is a part of the aging process. Enjoy whatever your health can allow.
6. Enjoy what you are and what you have right now. Stop working hard for what you do not have. If you do not have them, it's probably too late.
7. Just enjoy your life with your spouse, children, grandchildren and good friends! People, who truly love you, love you for yourself, not for what you have. Anyone who loves you for what you have will just give you misery.
8. Forgive and accept forgiveness. Forgive yourself and others. Enjoy peace of mind and peace of soul.
9. Befriend death. It's a natural part of the life cycle. Don't be afraid of it. Death is the beginning of a new and better life. So prepare yourself not for death but for a new life with the Almighty.
10. Be at peace with your Creator. For... He is all you have after you leave this life.
1. Focus on enjoying people, not on indulging in or accumulating material things.
2. Plan to spend whatever you have saved. You deserve to enjoy it and the few healthy years you have left. Travel if you can afford it. Don't leave anything for your children or loved ones to quarrel about. By leaving anything, you may even cause more trouble when you are gone.
3. Live in the here and now, not in the yesterdays and tomorrows. It is only today that you can handle. Yesterday is gone, tomorrow may not even happen.
4. Enjoy your grandchildren (if you are blessed with any) but don't be their full time baby sitter. You have no moral obligation to take care of them. Don't have any guilt about refusing to baby sit anyone's kids, including your own grand kids. Your parental obligation is to your children. After you have raised them into responsible adults, your duties of child-rearing and babysitting are finished. Let your children raise their own off-springs.
5. Accept physical weakness, sickness and other physical pains. It is a part of the aging process. Enjoy whatever your health can allow.
6. Enjoy what you are and what you have right now. Stop working hard for what you do not have. If you do not have them, it's probably too late.
7. Just enjoy your life with your spouse, children, grandchildren and good friends! People, who truly love you, love you for yourself, not for what you have. Anyone who loves you for what you have will just give you misery.
8. Forgive and accept forgiveness. Forgive yourself and others. Enjoy peace of mind and peace of soul.
9. Befriend death. It's a natural part of the life cycle. Don't be afraid of it. Death is the beginning of a new and better life. So prepare yourself not for death but for a new life with the Almighty.
10. Be at peace with your Creator. For... He is all you have after you leave this life.
Disturbed by cut in annual bonus
Dear Mr. Tan
I was disturbed by the lastest news that Ntuc Income had declare to cut our annual bonus and by doing this, they will increase our maturity bonus. I was not convince how can this method benefit me in the long run.
I had called Income's hotline and had spoken about this issue. However, nothing can be resolved as they stand very firm that they do this is to benefit to the policyholder. I had total 6 life policies been affected could you give me some advise regarding this issue.
REPLY
You can ask NTUC Income to show you the cash value of your policies for the future years, based on the old bonus rates and the revised bonus rates. You will be able to see if the change in bonus is fair. It is their duty to provide a clear explanation of the change in bonus, especially as they are making a major change of this kind.
If they do not respond to your request, you can write to MAS and ask their assistance.
I was disturbed by the lastest news that Ntuc Income had declare to cut our annual bonus and by doing this, they will increase our maturity bonus. I was not convince how can this method benefit me in the long run.
I had called Income's hotline and had spoken about this issue. However, nothing can be resolved as they stand very firm that they do this is to benefit to the policyholder. I had total 6 life policies been affected could you give me some advise regarding this issue.
REPLY
You can ask NTUC Income to show you the cash value of your policies for the future years, based on the old bonus rates and the revised bonus rates. You will be able to see if the change in bonus is fair. It is their duty to provide a clear explanation of the change in bonus, especially as they are making a major change of this kind.
If they do not respond to your request, you can write to MAS and ask their assistance.
Saturday, April 26, 2008
Unit trust and ETF
A Sunday Times article said that unit trusts are not transparent. This is not correct. The unit trust trade on its net asset value at the end of each day. The fund manager accepts your investment in cash, gives you the units, and then invest the additional cash. It creates liquidity. For a long term investor, this is a good arrangement.
A ETF trades on the price quoted on the exchange. This may be transparent and tradeable, but it may suffer from the lack of liquidity, if you wish to trade in a large volume.
Each arrangement has its advantages and disadvantages. The most important factor is the expense ratio. If the unit trust or ETF gives a low expense ratio, a long term investor will gain from it, compared to high expense funds.
A ETF trades on the price quoted on the exchange. This may be transparent and tradeable, but it may suffer from the lack of liquidity, if you wish to trade in a large volume.
Each arrangement has its advantages and disadvantages. The most important factor is the expense ratio. If the unit trust or ETF gives a low expense ratio, a long term investor will gain from it, compared to high expense funds.
Personal attacks
I have blocked many unsubstantiated remarks levied against NTUC Income, its products, its agents and management.
I allow some of the negative comments to go through, if they are not personal and make a point that is based on facts.
I have also received personal attacks against me. I block them, if they are personal and malicious. However, I have decided to allow some of them to go through.
I allow some of the negative comments to go through, if they are not personal and make a point that is based on facts.
I have also received personal attacks against me. I block them, if they are personal and malicious. However, I have decided to allow some of them to go through.
Investment linked plans from NTUC Income
Someone, probably a NTUC Income agent, made an anonymous posting about the regular premium investment-linked plans (namely the Ideal plans ID2 and ID7) introduced by me when I was CEO. He (or she) accused me of being unfair in recommending against investment linked plans now. Although it was a personal attack against me, I have decided to post the comment.
Those who correctly read my blog knows that I am recommending against regular premium ILPs that take away two years of savings, especially sold to customers who are not informed about the high charges.
The Ideal plans introduced during my time have the following upfront charges:
ID2 - 7 months premuim
ID7 - nil
They are much lower than the charges of the regular premium ILPs sold in the market. Read this comparision:
http://www.askdrmoney.com/Ins_ILP_RP.htm
The Ideal ID7 is a good plan for the customer. But the insurance agents are not willing to sell it, as they earn a low commission. You have to buy it from the business center (if they still offer it).
You can avoid all the upfront charges by investing in the STI ETF. For the life insurance cover, you can buy a decreasing Term insurance. Read this FAQ:
http://www.tankinlian.com/faq/low.html
Recently, I withdraw a large sum of money from the money market fund and wanted to re-invest in the Combined Fund. Although it was a topping up of any existing policy, I was asked to pay a upfront spread of 3% for the new investment. I decided against it. I took out the money and invested it in the stockmarket directly.
By not taking care of the interest of an existing policyholder, NTUC Income has lost a large investment.
Those who correctly read my blog knows that I am recommending against regular premium ILPs that take away two years of savings, especially sold to customers who are not informed about the high charges.
The Ideal plans introduced during my time have the following upfront charges:
ID2 - 7 months premuim
ID7 - nil
They are much lower than the charges of the regular premium ILPs sold in the market. Read this comparision:
http://www.askdrmoney.com/Ins_ILP_RP.htm
The Ideal ID7 is a good plan for the customer. But the insurance agents are not willing to sell it, as they earn a low commission. You have to buy it from the business center (if they still offer it).
You can avoid all the upfront charges by investing in the STI ETF. For the life insurance cover, you can buy a decreasing Term insurance. Read this FAQ:
http://www.tankinlian.com/faq/low.html
Recently, I withdraw a large sum of money from the money market fund and wanted to re-invest in the Combined Fund. Although it was a topping up of any existing policy, I was asked to pay a upfront spread of 3% for the new investment. I decided against it. I took out the money and invested it in the stockmarket directly.
By not taking care of the interest of an existing policyholder, NTUC Income has lost a large investment.
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