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CEO's reply to letter 'Time Life Insurance Association spoke up' (ST, 19 July)
To The Editor
The Straits Times (Forum)
19 July 2005
I refer to the letter from Ms Seah Geok Hong entitled "Time Life Insurance
Association spoke up" ST, 19 July). Ms Seah asked the Life
Insurance Association to substantiate its claim that regular premium
investment plan are suitable for older people.
I like to speak for NTUC Income and address the underlying question.
Compared to a traditional life insurance plan, an investment-linked plan (ILP)
has the following advantages:
a.. flexibility in making regular and adhoc savings, including temporary
suspension,
a.. choice of investment funds,
a.. flexibility in types and amounts of insurance coverage,
a.. transparency in the mortality, expense and other charges.
In choosing between different ILP plans available in the market, the consumer
should look at the charges and also the investment risks in the various funds.
Older people pay a higher mortality charge for their insurance protection.
However, the amount of insurance needed at the older age should reduce,
as the childrn are older and the policyholder has probably already
accumulated sufficient savings.
One way to reduce the charge is to deduct the accumulated savings from the
initial amount of insurance. The premium will reduce with the lower insured
amount. The policyholder also has the flexibility to terminate the insurance
coverage on their retirement.
A flexible ILP plan is more suitable for today's uncertain job environment
The policyholder will need to be properly advised on how to tailor this plan to
meet their needs. NTUC Income offers free financial counselling to our
policyholders using salaried insurance consultants. We will extend this free
service on a limited scale to the general public.
NTUC Income
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