Support My Efforts By Visiting The Advertisers

Disclaimer

This is a personal blog. The opinions expressed here represent my own, not those of my employer and is not intended to malign any religion, ethnic group, club, organization, company, or individual.

Lessons From Capital Plus

>> Thursday, July 14, 2011

NTUC Income rolled out Capital Plus on 11 July and has closed the subscription on 13 July, 5pm.

The plan is a simple 2 year single premium endowment that gives a fixed 2.82% absolute interest (or 1.4% annual compounding). Down side is that withdrawal any time within the 2 years suffers a definite loss.

As can be seen, funds are still available in the market. People are hungry for short term plans that are relatively safe and give a fixed return higher than fixed deposits.

I believe this is a win-win-win situation that insurers can learn from.

First WIN, customers. People are happy with the plan. It is simple, straight forward and no hidden funny business. Returns may not be fantastic, but it is a risk-reward that people find acceptable given the current interest rate environment and duration of the plan. The plan also would not fall into the toxic category of products.

Second WIN, salesman. Agents still receive their commissions. It is of course not equivalent to milking from single premium ILPs, but it gives them an opportunity to catch up with clients and recommend them something that may be of interest to them. Well, bottom line is, some comm is better than nothing at all. Furthermore, it is only 2 years. The agents can go back to clients when the plan matures to follow up and earn more comm.

Third WIN, insurers. They still make profits. Rather than losing business to banks with fixed deposits, structured deposits and unit trusts, they can tap into this market to enhance their business.

From the response of the demand, it puzzles me why insurers are not designing products to supply to this demand. Perhaps they feel that funds into such plans is an opportunity cost from ILPs that can reap significantly higher profits.

0 comments:

Disclaimer

Privacy

The owner of this blog does not share personal information with third-parties nor does the owner store information is collected about your visit for use other than to analyze content performance through the use of cookies, which you can turn off at anytime by modifying your Internet browser’s settings. The owner is not responsible for the republishing of the content found on this blog on other Web sites or media without permission.

Blog Comments

The owner of this blog reserves the right to edit or delete any comments submitted to this blog without notice due to;

1. Comments deemed to be spam or questionable spam
2. Comments including profanity
3. Comments containing language or concepts that could be deemed offensive
4. Comments that attack a person individually

Terms and Conditions

All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.

This policy is subject to change at anytime.

About This Blog

To promote the education of individuals for the need to have a healthy lifestyle and wealth management through proper financial planning, particularly in investments.




Top Blogs


Awards

Top Sites

  © Blogger templates Sunset by Ourblogtemplates.com 2008

Back to TOP