Monday, August 23, 2010

Higher bonuses for your insurance policies

Better bonuses for some insurance policyholders - Payouts from Income, AIA and Prudential up as economy rebounds (The Straits Times 23 Aug 2010)


As reported in the newspapers today, if you are a policy owner of participating whole-life insurance or endowment savings policies from NTUC Income, AIA or Prudential it is good news for you as the bonuses to be paid towards accumulating your cash values is higher due to a strong economic rebound that started late last year.


Not all companies have announced higher bonuses though, Manulife Singapore, was reported as one of the insurers that will not be adjusting yearly bonus payouts this year. 


Will this high bonus payout continue? 






It is anybody's guess as market conditions remain uncertain.
As highlighted in the article, high investment performances by insurance companies may not result in high bonus payouts as many other factors are taken into consideration including investment outlook or mortality and morbidity claims.


In addition insurers also practice what is know as "smoothing" of returns where even when insurance companies obtain high investment returns of their participating fund investments, bonuses can be held back so that bonus payout can be maintained in the years when investment returns are less favorable.






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