NTUC publishes Policy Yields

On its website and in major papers, NTUC INCOME has published its Actual Yields for policies again.

This is a good thing – Policy Yields on NTUC Life Policies (based on performance in 2011).

So far, NTUC Income has been generally consistent and reliable in terms of its bonus payouts on its participating life policies.

For those who took up policies in the 80s and 90s, and backed by a buoyant economy with good market performance, the life fund supported good yields of 5+% p.a.

Just a point to note.

While INCOME is likely to continue its good practice of consistent and reliable bonus declarations, the Actual Yields published are not to be taken as expectation for the future. Those were a reflection of policies taken up in the 1980s and 90s. The average maturity yields are indicative of those plans maturing in the period 2008 to 2012.

By generating Benefit Illustrations of similar NTUC plans (Endowment and Whole Life) using today’s rates and projections, look at the expected yields below.

Policy Term/ plan mature in yr	For Male & Female, entry age 25, prem 100 pm
	Endowment projected Yield ( incepted in 2012)
20 / 2032	4.44%
25 / 2037	4.55%
30 / 2042	4.61%
	Entry age 30, sum assured 50K, Whole Life plan (limited pay 20yrs) - incepted in 2012
Gender	Projected Yield if surrender at age 55 in yr 2037
Male	3.66%
Female	3.75%

When it comes to participating policies, NTUC Income is one insurer I recommend. However, I thought it’s healthy to put its marketing in better light.

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Aviva and MyRetirement

Aviva has launched its latest save-for-retirement plan.

{from Aviva}

We know that 4 in 10 Singaporeans find financial planning for retirement to be too complicated¹. With this in mind we have developed a retirement solution that is simple, safe and sure – MyRetirement.

Key benefits are:
• Monthly Guaranteed Retirement Income for 10 years²
• Capital guaranteed³ so you can get all your premiums back to support your retirement.
• Guaranteed returns⁴ of up to 2.38% per annum.
• Choice of Retirement Age – 50, 55, 60 or 65 Age Next Birthday.²
• Choice of premium payment term - as short as eight years - or affordable regular payment (up to five years before your selected Retirement Age).

{end}

Based on Aviva figures, a 35 year old working adult saves for retirement at age 65 (age next birthday). He/she wants guaranteed monthly income of $1,000 per month from 66 to 75.

Receive income till age 75	guaranteed yield	total yield
8 year limited pay	1.94%	4.51%
save to age 59	1.82%	4.30%
Cash out at age 65	guaranteed yield	total yield
8 year limited pay	1.50%	4.27%
save to age 59	1.24%	3.84%

Footnotes:
1. Source: Retirement research conducted by Harris Interactive, commissioned by Aviva Ltd (2011).
2. At start of the Plan, you can choose from our range of Retirement Ages available. They are 50, 55, 60, or 65 Age Next Birthday (ANB). Payments of the monthly Guaranteed Retirement Income Benefit will start one month following your
    selected Retirement Age.
3. Capital is guaranteed at the selected Retirement Age.
4. Guaranteed returns of up to 2.38% per annum is only upon policy maturity. This is based on an entry age of 17 (ANB) with eight years premium payment term where customer will receive monthly Guaranteed Retirement Income of S$1,000,
    based on 65 (ANB) as selected Retirement Age.

This plan is almost similar to NTUC's RP SAIL. SAIL on a regular premium basis, requires savers to contribute and accumulate towards a pre-selected retirement age (55, 60, 65, 70). Premium term is from policy inception to 5 years less the target age. Upon maturity, either a lump sum is encashed or an income stream is created over 20 years. 

Reversionary/annual bonus rate is higher in Aviva's plan at $15 per $1,000 sum assured. NTUC's plan is offering $12 per $1,000 sum assured. However, do note this is based on projection of the underlying life fund achieving a smoothed rate of return at 5.25% p.a. over time.

At the very least, those who like RP SAIL have another plan to benchmark and do their homework.

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HSBC Early Critical Care

HSBC Early Critical Care was launched in early March 2012.

It is a pure term insurance protection focussed on early stage critical illness claims.

Plan highlights
- 100% term protection (standalone plan)

- Covers 90 medical conditions across wide scope and severity of critical illnesses.

- 100% payout of Sum Assured at all stages, subject to caps: $75,000 at Early and $150,000 at Intermediate Stages.

- Special CI benefit for Dengue Haemorrhagic Fever, Diabetic Retinopathy, Osteoporosis, Severe Rheumatoid Arthritis. Each payout 20% of sum assured, cap $25,000 for each claim.

- Angioplasty (heart stent/balloon) payout is 10% of sum assured, cap $25,000.

- Coverage term: to age 65 or 85.

- Max sum assured: SGD 1,000,000.00 (min SA: SGD 50,000)

- Premium Waiver till end of policy in event of early/intermediate CI claim.

Special CI payout is in addition to the plan's sum assured. So in theory, it may be possible to claim an additional $100k (4 x $25k) on top of the basic plan. But highly unlikely in reality, unless one is super 'suay' and actually survives them all. Gosh.

This HSBC plan is rather similar to Pru Early Stage Crisis Cover. However, the survival period for claims is longer for Pru at 30 days. HSBC only requires 14 days. In terms of coverage term, Prudential only provides for cover to age 85. Also, the maximum sum assured for Pru is capped at $150,000 per life. Pricing wise, no details but I suppose Pru may be slightly cheaper in lieu of the difference in benefits.

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