Today I decided to do some calculation on Vivolife. Why? Because I’ve been hearing that this is a very lousy whole life that gives poor value for money. But Vivolife is a whole life policy that is never meant for savings and yet people continue to calculate its yield like as if it is a saving plan. Anyway, I decided to calculate the yield if it is treated like a saving plan (when in reality it is NOT).

Parameters: Last age 0, female, limited premium 15 years of $1427 annual premium for sum assured $120,000 with $150,000 as the minimum death benefit for the first 15 years.

Iteration #1:
Assumptions:
Gross Yield 3.75%
Surrender at end of 25 years.

According to the BI, FV at the end of 25 years is 35,645. Therefore, IRR = 2.83%. Therefore, expense ratio = 3.75-2.83=0.92%.

Iteration #2:
Assumptions:
Gross Yield 5.25%
Surrender at end of 25 years.

According to the BI, FV at the end of 25 years is 41,846. Therefore, IRR = 3.72%. Therefore, expense ratio = 5.25-3.72=1.53%.

Iteration #3:
Assumptions:
Gross Yield 3.75%
Surrender at end of 65 years.

According to the BI, FV at the end of 65 years is 143,008. Therefore, IRR = 3.31%. Therefore, expense ratio = 0.44%%.

Iteration #4:
Assumptions:
Gross Yield 5.25%
Surrender at end of 65 years.

According to the BI, FV at the end of 65 years is 244,249. Therefore, IRR = 4.26%. Therefore, expense ratio = 0.99%.

I consider the expense ratio to be acceptability low as the expense ratio is inclusive of the mortality and morbidity charges. Conclusion: Based on the above iteration I consider the expense ratio to be good enough and hence Vivolife is a good product. If in doubt, always consult your financial adviser.

For calculations, download this excel sheet: HERE (client only, login required)

Comments

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amylauschke  - I like the last para: 10 benefit illustrations   |Registered |2010-08-02 01:25:39 Since you had done one, might as well be a good person, and do more?

Garrett   |68.40.190.254 |2010-08-02 06:23:01 I think you should redo the calcs for a young person (mid-20s person) instead of an age 0 person. For Male, 23, $100k, pay for 25 years, the premium is $1921/yr. Assume surrender after 25 years. At 3.75%, projected sum is $61k and 5.25% projected sum is 71k). That's a IRR of 1.8% (for 3.75% projection) and IRR of 2.9% (for 5.25% projection)! Assuming surrender after 40 years (at age 63 near retirement), the IRR is 2.5% and 3.3% for each respective projection!

Garrett   |68.40.190.254 |2010-08-02 06:27:22 I also don't think expense ratio is all we should look at for such plans. Given that the IRR is about 2-3% (for a young adult) or 3-4% (for a newborn), it is still ridiculously low when considering the savings is meant for retirement. Unless the policyholder is super conservative, the typical person who invest his age in bonds is most likely to get a gross IRR lower limit of 5-6% till retirement age, which translates to 4-5% assuming expense ratio of 1%. One should also bear in mind that Vivolife funds are invested in 70/30 Bond/Stock (as given in my BI as of 31 Dec 200, so the 5.25% returns is overly optimistic.

Shanne   |220.255.7.167 |2010-08-03 06:13:33 I seriously think you guys dun get the point. If you are buying a Vivolife, the plan is meant to cover CI risk for a lifetime, which then make it a sure claim policy. Limited payment also ensures that people are able to finish paying. Why then the heck you want to surrender the plan leh? If you are to save, then look for endowment my friend. All these IRR calculations on cash value are rubbish (pardon my bluntness). You should instead calculate the IRR on claim benefit. Really shock me the so-called expert CHFC also doesn't quite get it right. Please brush up skill before making loud noise proclaiming the only expert in town.. Really tah boleh tahan..

Wilfred   |SAdministrator |2010-08-03 06:41:35 Shanne, Please read the first paragraph before jumping to conclusions.

Sham  - yahoo   |220.255.7.222 |2010-08-03 07:07:26 It is too expensive as protection plan. That premium you pay can insure you 10/20 times. Isn't waht insurance is for, right? What vivolife protects will shrink in 25 years ' time . Why keep a shrivelled vivolife ? And it is NOT for protecting you when you are old. Stupid , every will die. So? sure claim? is what vivolife is for ? I bet as many as 90% don't keep beyond their retirement age. If every body keeps till claim NTUC will go bankrupt because ntuc has to pay 70% more than what they provided for in their premium calculation.But they are not bums because they know historically all consumers are the dumb ones and 90% will cancel even though they don't have to pay premium. The cash value is too 'tempting' and if they don't cash it out it will disappear into the pockets of the ntuc in the form of very high mortality charge. NOw , you all get it?

Shanne   |220.255.7.166 |2010-08-03 08:40:35 Wilfred, I thought you are like that Tan KL who won't post opposite view. For that I thank you and see you quite differently now. For the record, I am an advocate of term insurance cos don't really believe in paying too much into insurance policies. But I seriously think that Vivolife, or better still, TM Legacy (LP) (Plus or no Plus doesn't really matter), is a decent plan as far as lifetime CI risk is concerned. These plans are far much better than their ancestors in terms of pricing and features. They are some of the very few plans that are still of decent value and sellable (I hope they can stay abit longer cos many good plans had been withdrawn from the market). A standalone CI term plan can be very expensive. Cost/benefit ratio is not good, at best to temporary boost up cover only. I think one still need some CI cover post retirement, don't you think so? I really concern for the many thousands readers of Tan KL, who doesn't really know what's decent and what's not. He doesn't really know what he's talking about. Asking people like him to buy Medishield will do. The rest can pay from savings. Telling people no need to buy travel insurance cos chance of accident very slim. Everything is buy term and invest in ETFs blah blah blah. Blind leading the blind, sigh. Lagi jialat, very hard sell his books and always trying to push them down people's throats. On a serious note, for someone who bites the hand that fed him, that tells something about his character. He's a bitter old man..

Shanne   |220.255.7.168 |2010-08-03 09:09:46 Hello Sham, If you comment based on half baked knowledge, I suggest you don't be so loud. Don't embarrass yourself in this decent blog. Empty buckets make the loudest noise. Sorry Wilfred, not my intention to engage in this fight. He started it..

Sham  - yahoo   |220.255.7.233 |2010-08-03 09:56:06 shanne, i disagree with you over vivolife. See my post above yours. Vivolife is no different from those rubbish whole life or limited payment plans, from ntuc to TM asia. They have one common feature, ie very high cost and ntuc is not bothered because no consumer understands the working cost of par products and all they need is an army of conmen to con their own customers with dubious presentation. For life? check with MAS website and see for yourself whehter these products are kept for whole life. Up to a point, eg 60-65 years old ntuc would like to see that you exercise option of converting to an annuity. Not that ntuc is concerned about your retirement it is protecting its own backside. If you keep beyond this age chances are that you might make a claim and the claim is to the disadvantage of ntuc. If you convert to an annuity they save a lot of money and they only give extra 5%. This is a safeguard although acturial computation put the base year at 100 and discounted the premium to their present values. Ntuc is taking a big risk and is actually gambling that only 10% will keep till claim at old age.But they know historically only 10% at best will go on till claim at old age. Why? money for retirement is more important. If policyholders borrow instead of surrender it is even better for ntuc because it makes more money and if the loan is substantial the policy will lapse. This type of product is a scam and is very much loaded against the buyers from the moment they buy. To pay for a limited period? It is bullshit. They lie.This is dishonest. both the insurer and the agents cover it up. Secondly , can you afford enough? your need. LIA says only averagely $50K sold and claimed . Try to keep $50k for 25-30 years and see how much left. What about the claim? enough to meet expenses? Shrivelled, man....to like dried lemon. A standalone CI plan can be expensive? that means you don't know mcuh about insurance. You have been conned by the insurance company you represent. I suggest you research more and find out the truth. This is insurer's lie and con.

ManUfan   |124.155.195.6 |2010-08-03 11:33:22 Well seriously... If the agent sells the life plan like a savings plan... It is an issue .. Dunno why I'm even bothering to write a comment on this .. Different plans suit different needs don't go around slamming others' products..this product is obviously a life plan and should not be calculated like an endowment .. The cash bonus accumulated is really a bonus not forgetting the insurance mortality cost is squeezed into that limited number of years..unfortunately rogue agents sell it as if it's a savings plan. Your title should not be 'lousy ntuc income vivolife.' It should be 'why vivolife should not be taken as a savings plan' !!

Shanne   |220.255.7.158 |2010-08-03 19:18:37 Sham, Dun be like that leh. There aren't really many decent products in the market already. If these limited pay CI plans also cannot do, then all advisers/agents will have to eat grass already. You think they are bad? Try regular premium ILPs offered by those offshore insurers and you will know what I am talking about. They only got one product, and their revenue even topped full-fledged insurers. These ang mohs are very clever, can't sell in their home so dump this toxic plan to emerging Asia like S'pore and HK, and Middle East countries. MAS should really ban this kind of product. It's so sad to see local advisers cheating our fellow people here with this kind of product. There are a lot of greed in most FAs. All but a hadnful of top producers made it there with this regular ILP. Back to this Vivolife. Who ask you to convert to annuity wor? I must say NTUC Income's pricing managers are very clever to come out this feature. Some agents even sell Vivolife over TM Legacy (LP) due to this feature, among others. Once converted, CI cover no more liao. I must set the record straight once and for all: The reason you buy a Vivolife or TM Legacy (LP) is because of the lifetime CI cover, nothing else. You must understand the concept of insurance. You only need temporary cover for some risks (ie death & TPD), but certain risks require cover for as long as possible (hospital bills, CI, etc). If you have done a study of standalone term CI plan, you will know that the total premiums to be paid can be pretty closed to the sum assured, if the term of cover is long. If you opt for the shorter term, it's macam like gambling hoping kenal before expiry. I really do think that people need some CI cover even after retirement. Pricings for CI term are on the high side now. Like in the above example, the parent only pays about $21,000 and that's it. And NTUC cannot adjust the premium for CI rider once 15 years' up. It is liable to cover the child against 30 CIs and death for $120k plus all future bonuses, and the sum assured can increase to over $250k when the child reaches ripe old age. Input the figures into the IRR spreadsheet, PMT (1427); n (15); FV (say at the point of claim is $250,000); calculate i. That should give you a pretty decent yield. $21,000 to $250,000 for 60 odd years is pretty good what? Sure claim some more leh. Where to find this kind of investment? And if you invest, you sure will make a 10-fold return? It should be pointed out that the earlier the claim, the higher the IRR. Treat this as part of your overall asset allocation strategy loh, ie the lower risk portion. Actually, one can't investing all the money what? Remember diversification? In fact, if you ask the insurers, they lagi preferred those whole life paying plans like Living policy (pay till 85) etc cos most people like what you said will not finish paying one. Most people will terminate half way for various reasons, and insurers are happy cos no more liability liao. But for these limited CI plans, the likelihood of you finish the term is very high and insurers will have all the liability to cover you CI and death for a lifetime. Based on my understanding, TM and NTUC Income don't really profit alot from these kind of products. You know what they like? Regular ILPs are their best friend. Little liability, no need to give you bonus, everything pushes to market performance i.e NAV. They just happily charge you a fee, which can amount to hundreds of thousands of dollars. The effect of deduction is terrible. They also like endowment policies, anticipated or not doesn't matter. The liability is also very low and limited to the term only, and they sure win one cos can adjust maturity value paid to you by cutting bonus. As a CFP, I appreciate the fact that each individual's needs and preference are unique. Some people just not suited for investment. To each its own. There isn't a one-size-fit-all solution. Otherwise everybody just pay $12 and follow Tan KL's advice will do. Really tak boleh tahan that old bitter man. Think of him spoilt my day again..

Shanne   |220.255.7.153 |2010-08-03 19:27:44 Why am I telling you all about this and advising for free? Must charge a fee next time like Wilfred

Sham  - yahoo   |220.255.7.216 |2010-08-03 20:39:52 Shanne, instead of hiding behind the alleged 'comment based on half baked knowledge' you should rebut my comments. This shows you have vested interest in the vivolife. I am not surprised that insurance agents like you will defend tooth and nails when your livelihood is threatened .You tried to rationalize but I rubbished them.Indeed , vivolife is a rubbish plan intended for the insurer.It has no financial planning value.I reiterate, you check MAS and LIA and stop the crap about wholelife .How many have $500k sum assured when they are old in 30 years and if you discount to present value how much it is worth?. LIA has all the stark truths but you wont' accept because it threatens your product pushing modus operandi.Search your conscience and your pocket to see which is more important to you.I bet it is your pocket.

Sham  - yahoo   |220.255.7.199 |2010-08-03 22:40:54 If you ask me to choose between regular ILP and limited payment WL I would choose regular ILP(rILP) because rILP has better potentials of acheiving your goal because of its flexibility.You can turn a rILP into a limited variable WL whenever you like. You have full control of the plan and NOT the insurer.With WL the insurer holds you to ransom and if you should break free you will be the loser. Let me expose of the myths long held by insurance agents and never disclosed by the insurer. Did you know that the mortality charge increases with age, for whatever products, WL or rILP? With rILP they saw the bomb at old age but not with WL. Why? the dishonest insurance companies cover it up and use the agents to perpetrate this lie. Did you know at whatever age WL is taken the same mortality charge will apply at the point of the policyholder's age.? Eg. if a child attains 60 years old the mortality charge is the same as the 60 year old person who just takes up. Why it is not mentioned in the BIs? It is cheating the buyer don't you think so. Regular ILP is unbundled and transparent whereas WL is a cloak and dagger product which has a lot of odds stacked against the buyer. If you hold a WL till 100 years old it might even lapse because of mortality charge depleting the cash value. I suggest you pose this issue to your actuary or your ceo. Don't waste your money on CI insurance after 65. Just have a H&S medical.Medical treatment at old age just in case. Not every old person will get dread disease and you don't need to see Mayo or John Hopkin or spend a limb on medical at this time but you need PLENTY of coverage when you are bringing up your kids and family. Please , Shanne, have conscience for your poor clients whom I beleive are ordinary folks. Don't rob them but rob the rich who can engchiew you and splurge on you.

Shanne   |220.255.7.137 |2010-08-03 23:05:03 What a Sham(e). Typical S'porean bucket half-full but thot he's the expert, can save the world. How about also set a what 'Consumer Salvation Association' and make yourself a President? Mr President.. I shall response no further. No time to waste arguing with half-baked expert. Sad. Sick. Shame..

Wilfred   |SAdministrator |2010-08-03 23:34:49 Products are merely tools to help the individual to achieve his financial goals and needs. No financial planner will use just one tool/product to do that. A multi-disciplinary approach is used to do that because no single product or tool can solve all clients' problems. Each tool and product by its own will appear to have many short-coming but when combine with many other tools, the entire package becomes strong and robust. That is why a wholistic financial plan is required which unfortunately most clients are unwilling to go through it and advisers are not willing to provide for it due to low remuneration to effort ratio.

Shanne   |220.255.7.231 |2010-08-03 23:39:08 Agree! Well said! So Wilfred ps help this Sham, he must have some really bad experience previously..

Garrett   |68.40.190.254 |2010-08-04 03:39:51 To set the record straight, standalone CI plans are 5-6 times cheaper than limited paying WL plan. For the case I cited of about $1900/yr Vivolife, a standalone CI plan or the cheapest term+CI plan cost $300-400/yr (from age 25-65). Assuming a 7% return over the 40-yr period, the premium if invested for CI "self-insurance" would have accumulated to $79k, which is still below the sum assured of $100k. So how can it be expensive?

Adrian Khiat   |220.255.7.231 |2010-08-21 12:12:17 "Assuming 7% returns?" It is dangerous to assume that the returns is 7%. It is dangerous to assume that this 7% happens in a straight line over a period of x years. Is there anyone who wish to share on what is the actual investment returns over the past 20 or 25 years at end 2009 and end 2008 using MSCI world index and Asia Ex Japan Index? It is also interesting to assume that everyone is willing to take such volatility...

Friend  - NA   |220.255.7.159 |2010-09-27 23:23:17 Hi Wilfred, Do you have the statistics of those people who benefitted being "conned" in the first place and their family befitted from his "foolishness" after a claim? How about those "smart" people who tried to do comparisons from A-Z and died too soon to even find a suitable insurance program to begin with? Look, I know you are being helpful here, but please do not condemn the advisers whether they are "tied" or "FA" or "IFA" I think besides those who keep churning policies and investments, they have done their job to get people insured. Can you say that Term is the best when the insured forgets the premium before he dies? or Endowment plan is the worst when he could have spends all his money on 4D or at the IRs?

Tootgal   |202.156.10.228 |2011-04-13 11:38:00 Seriously after reading all the comments I felt that it is terribly unfair to say that vivolife is a terrible plan. Personally I have 2 vivolife plans, 1 10 years payments & 1 15 years payments. Noone approached me to pitch but I bought directly from the agency myself. Reason being I'm a licensed financial consultant and I felt this plan meets my needs. Noone hard sell me this plan. Why do I said I felt is good? Definitely in terms of cost of insurance, this plan like any whole life plan has higher mortality charges and hidden cost but at least I know I'm paying a level premiums throughout the tenure and not increasing premiums over my age difference and with zero cash values. Example I did a caculation for a 35 years old male. If he took up a term plan coverage $350k now he only pay $1000/year which is less than $90 a month. But when he turns 50 years old this amount tripled and when he turns 65, he pays about $9000/year for the same coverage with 0 cash values. What is the benefit of it? It is benefinical when one is young but not when they are old. And usually coverage is very important ESP for elderly after 60s. But can one afford that kind of term premium at age 65? And most term plan cover up till age 65 only. Vivolife includes coverage for death as long as one is alive, tpd till age 65 and 30 critical illness till as long as one is alive and assuming no conversion to annunity I m not saying this is the best plan as I strongly believe there is no Best plan around but I strongly disagree to saying this is a lousy plan. At least to me, as a consumer I'm very happy with what I got and I've been promoting this plan to many friends and relatives. They love it too. And most importantly, if your mind set is right, you know you are buying a life term, why would someone kept harping on the irr or effective yield of the plan? If you are so concern about the investment returns and you are capable of Doing better why do you even bother to look at all these plans? Just invest into equities and forge about all these plans. If you are looking at life coverages, additional benefit when you retires then look into vivolife. Otherwise just do your own investments. I strongly believe each to it's own and I will never condemn any products. I believe all customers are smart and when they buy into something there must be a benefit that they see in the plan. Instead of scolding the financial advisors for misselling or saying the customers stupid, I think it is only right that each has their beliefs and my believe is vivolife is a good plan Thanks

Anonymous   |220.255.2.65 |2011-04-13 22:28:15 From your argument I can see that you are still naive about WL and term. Let me tell this. Cost of insurance or mortality charge is 'consumed' or it is an expense , whether it is WL or term it is gone and NEVER returned or refunded.It has become the revenue of the insurer. Cash value? it is the other component of the premium you pay, your own money invested by the insurer that is returned to you. I empahsise, your own money...if you invest this money in a portfolio that meets your time horizon, needs, return objective you will get superior return instead of the negative return from the insurer.Putting into the vivolife your premium is rojaked with tom dick and harry who have different needs from you..You see , it is one size fits all portfolio...rubbish.

Anonymous  - Vivolife is losers' game   |220.255.2.26 |2011-04-14 13:20:25 It is wonder that consumers can make informed decision when the so called adviser himself or herself is only half knowledgeable. 1.did you know the mortality cost is never refunded to you? 2. Did you know the mortality increases with age? The compounding effect can deplete your cash value of which the mortality cost is paid from when your limited payment term 'matures'.The worst is when you are above 60 years old,..it is like a bomb ticking away. 3.your cash value comes from your the surplus premium which the insurer invests with the rest of policyholders, old and young , male or female, risk averse or risk taker...no differentiation. 4.the amount insured will not be enough when you are old..if you discount it. 5. LASTLY, YOU WILL TERMINATE IT WHEN YOU ARE 60 YEARS OLD OR MAYBE 65...I CAN BET WITH YOU. 6. VIVOLIFE is a losers' game for the losers b'cos the return is negative

Anonymous   |220.255.1.140 |2011-04-13 14:28:13 Vivolife and all other wholelife becomes bad when it is marketed and SOLD as the MAIN protection and savings scheme to ordinary people. This is the reality of the insurance sales industry. Why? Becoz vivolife, wholelife and endowment take too much away from the policyholder and is horribly cost ineffective. The only good thing I can say about wholelife is that it is OK when the assured is young, below 10 yrs. Even so, it should be only 1 part of the overall insurance protection, and the savings and investment portion must be done separately. Par insurance is horribly cost ineffective. E.g. Can a upper middle class man earning $300K a year use wholelife to adequately cover himself for 10X annual salary? A $3M wholelife will cost a bomb! Same situation if you scale down to another man earning $30K a year. He will find a $300K wholelife to be very very expensive. So what do insurance agents do? They sweet talk and convince people to buy $50K or $100K wholelife (what average people can afford). This coverage is definitely not enough, but yet the monthly premiums take away a lot of the customers' disposable income. I.e. customers are shortchanged in that the coverage is inadequate and they have little savings left to put into long-term higher yielding investments. The returns from wholelife is definitely insufficient for them to meet future retirement with current similar lifestyle. When I worked in a large insurance company, it was standard practice for the SVPs, VPs, and GMs to exhort and scold the sales staff to sell par insurance and meet the ambitious API targets. You know something? I checked all these SVPs, VPs and GMs --- they ALL used term insurance to provide the bulk of their insurance cover. Only 10% to 20% of their overall sum assured was met by wholelife. As for endowments, these jokers ONLY put into single-premium 2 years to 5 years endowments (which are low commission and hence low cost). So much for practising what they preach.

Anonymous  - It is a rotten industry   |220.255.2.33 |2011-04-14 10:09:06 I know which company...it is a local social enterprise who bullshit that it is a people before profit company. The ceo talked through his ass or double talked. On one hand a social enterprise and on the other forced the 'sales champions' to push the high API products.Of course the greedy sales champions do it willingly with the promotions and incentives thrown in. You see, where got chance that their customers get decent coverage with those rotten products with negative return and under coverage? It is real sickening that these sales champions lost their conscience under the new management.

Tootgal   |202.156.10.228 |2011-04-15 12:11:43 Hey of cos I fully understand that mortality charges are expenses which will never be returned or invested but can I ask, which old people at the age of 60 can afford a term plan at the cost of $18000/year for sum assured of 350-400k? Yes I totally agreed if you are talking about a young chap at his prime age of 30 where health is good and he can invest his money into the stock markets and earn superb returns but what about period like sub prime ? If someone were to move on During subprime Wat can he expects? Double folds from his investments or double dips ? Of cos if someone at the age of 30 he got time , money and health on his side he will buy term invest the rest but what about those at age 60 and suffers from bad health? When term plan stops at 65 and he were to strike critical illnesses who were to assist him? You or his investments? How can buy term Invest the rest work for people who are non savvy or low risks tolerance? How would a 50-60 buy term and invest the rest? Regardless how bad you guys can condemn the plan at the end of the day it is still based on individual point of views. Instead of saying they are stupid or lousy why can't you just respect the business and the agents, the customers? Not all are out to cheat but not all age groups are suitable for your buy term invest the rest concept! And best of all not all customers will terminate their policies when they are old otherwise they will be no death claims and personally my parents are in 60s they did not terminate their policies even though cash values might seem attactive to them. Pls look at all areas and do not assume .

Anonymous   |220.255.2.59 |2011-04-18 20:27:43 What insurance does a 50/60 old need? Does he have any dependents still at this age? If he has don't you think term is a lot cheaper and it makes more sense than a vivolife? ALL products are not neither bad nor good until they are recommended. If they do meet the clients' goal adequately it is good and if they don't they are bad and lousy, right? Can vivolife meet your goals adequately and yet not at the expense of your other goals? I bet it won't for 2 simple reasons.It is robbery in term of premium and you can't afford adequately and conjob for its negative return.A simple test of whether it is good or bad, right? Look at the claim ages..is it at 60? Is that you are worried or is it more worrying at 30-45 when you have 5 children to feed. Statistically few claims above 60, ok. Hey , put the horse in front of the cart and not the other way .

Anonymous   |220.255.2.21 |2011-04-18 22:23:30 "And best of all not all customers will terminate their policies when they are old otherwise they will be no death claims and personally my parents are in 60s they did not terminate their policies even though cash values might seem attactive to them." what policy is it? WL with death benefit or critical illness? Are they working? Do they have any H&S plan? Are they retired? How much is the coverage?

Amy   |202.156.10.234 |2011-04-15 21:43:57 @Tootgal, I have a few questions: 1 Why would an "old" person want to take up a term plan for S$350-$400k at such a late stage in his life? I thought all such life plans are to protect his dependents, which means he would have taken up those coverages earlier in his life. Actually at 60 years of age, most of his financial burdens are not so pressing in the sense that his children would have grown up and become financially independent. 2 You write as if we are only relying on term plans for our coverage. But I am sure most of the qualified financial advisers would have their clients take up a separate critical illness policy. So, even if we get struck with critical illness at 60, we still have the proceeds from the critical illness policy to help us with the medical costs. I am sure apart from these proceeds, we could also rely on our shield policies to pay for our medical costs (that is if our financial advisers are responsible enough to make sure that we have shield policy too). 3 You write as if a large proportion of your customers are older people who are for the first time taking up insurance. Are they taking up insurance because they want protection or they have some spare cash and they want to invest? If it is the latter, I personally think that there is another better way to invest the extra cash, because involving insurance means an additional mortality charge which is unnecessary. There is a neater and cheaper way to invest, through unit trusts. At least through unit trusts, there is wide diversification of instruments (both debt and equity), geographical areas, etc without having to pay mortality charges. I should add that it is evident to me that because you are a tied agent, you do not have that wide a choice of products to service the diverse needs of your customers, and so hence you think that some of those insurance products could also serve your customers' needs even though they may not really need that coverage.

Tootgal   |202.156.10.228 |2011-04-17 01:37:41 Hi Amy , Thanks for all ur questions and queries but sad to say I'm not a tied agent or in fact I'm not a agent from any insurance companies so my stand is neutral and I supported vivolife becos personally I have such plans and I think they are not bad plans or not as bad as how the above aurgements are about. I'm currently not working in Ntuc and they definitely not paying my pay. What I'm sharing is just my 2 cents worth and I just hope people can look at things in all aspects but not jumping into conclusions or pushing blames to others. Ok my view to all ur questions : 1) I did not say a old person will take up term plan at age 60. I said if someone through out his life he didn't buy any life insurances but he worked based on the concepts "buy term invest the rest", at age 60 if he still needs the coverage he would need to pay a huge sum of money. That is assuming the person did not have any life plan and still relyin on term plan. 2) Amy if u read all the posts before mine, the way they projected it is Exactly assuming they only have term plans and no life plans. That is precisely my point. I'm totally not against any term plan or any company but my point is, one should have a life plan and personally I felt vivolife is not too bad as a life plan which is available in market now. I did not assume anything but those before me are condemning the plan and insisting buy term invest the rest! As for the point on buying a critical illnesses stand alone plan like you mentioned, currently I can think of 2 companies off hand which have these plans are Ge and Prudential. But what is the premiums for stand alone ci plan? Not cheap unless you have a life plan and this Is added as an additional benefits. Lastly, a shield plan or a comprehensive shield plan will provide customer adequate needs if one is admitted. But it does not cover private nursing or buying of any equipments. So if one need to buy these stuff, they have to come out from their own pockets agree? 3) lastly i do not have alot of old customers taking up insurance policies but again my point is, if someone only have term plan, what is he going to do with the rest of the money? Or how is he going to pay e hefty crazy premiums when he retires? Vivolife is definitely not sold as a savings or endowments plan so do not mix up your points. Of cos if one at age 50 is adequately covered, why should he put in more money into a life plan to earn higher interests or invest in life plan? Noone will do that unless that person really do not have sufficient coverage or thinks he needs more as he knew term premiums are too high. Talking about unit trusts, how confident you are in saying it is a better investment instrutments when markets are so unstable lately? In the past probably market cycle take place once every 5-10years but now what can time the market and be so confident that unit trusts are suitable for them or the old age. I strongly believe alot of professionals reading these posts don't believe in unit trusts at all. If those older customers are not market savvy are you going to recommend a unit trust to them or a endowment plan with principal guaranteed feature? Can u assure them when they need the funds in 3-5 years time their unit trusts will earn money and not in red? If u can, please share with me what funds and I will get my parents to buy because personally I don't agree they should in their Age. Risk appetite are totally not applicable to this investment ESP given the current market conditions . To round up my view, again I just got to emphasize that I'm not from any insurance companies and I believe many who are here are from other insurance companies because all the views given are very biased and one sided. If you notice throughout my points I did not condemn or point finger at anything or anyone but just give my 2 cents worth standing in a customer point of view, someone who bought vivolife and many other plans from other companies. No point pulling the plan down just becos you don't believe and whack on the returns and etc. That is totally not required and this industry is a fair place and every customer got their choices and believe. Guess we just to accept and respect it.

Anonymous  - Inefficient protection and rotten return   |220.255.2.80 |2011-04-18 11:29:50 Tootgal, mortality charge at 60 is expensive.. In term insurance you see it but waht about vivolife? Did your agent tell you it is not? did ntuc BI say it is not? Both lie...either the agent is incompetent or a liar...ntuc is NOT transparent in the disclosure. ALL insurance costs (term & WL) money and they INCREASE with age. ALL this COSt disappears, eaten up by the insurance company and become INCOME & REVENUE. Why you don't see in vivolife is because both the agent and company lie to you. You may be paying same premium but when you are 60 or when the mortality cost exceeds your premium the insurer dips into your cash value to pay the difference...did they ask your permission or tell you ? Cash value build up comes from the surplus of your premium, YOUR OWN MONEY and NOT the mortality cost refunded to you. (check with your honest actuary) Another point is CASH is KING during retirement to most people.99% of policyholders will surrender or loan from cash value(negative in real term) at 60/65..(even vivolife encourages you , which I feel is dishonest and contradicts their words about vivolife) Secondly, self insurance is a versatile option because it is NOT necessary you will get the dread decease. If you do, your H&S is enough to take of the most of the treatment cost which may come to hundreds of thousand. HOw much of critical coverage you have at this age? You really don't mind the compounding mortality cost? If you take a loan at this age you make NTUC very happy because you will pay AHLONG rate and it is guaranteed return to the ntuc.Your real return is already negative now your nominal return become also negative. Just a few negative points about vivolife or any WL....there are many and the salesmen and their benefactor don't want you to know.

Anonymous   |220.255.2.58 |2011-04-18 13:51:48 Your vivolife is also invested in equities although at lower allocation and therefore lower the risk. You can do that too and get higher return than from ntuc which takes a big chunk from the return. Did you know much of the return is taken away to pay all the expenses FIRST like the CEO's huge salary before distributed as bonus to you comatose policyholders? Did you know your real return is negative? Is your money working harder? It is working less harder than you. If your argument about volatility cycle is correct that you don't need to buy vivolife also. You can stay at home and time the cycles and get very very rich. A lot of professionals are not savvy but with half baked knowledge and that is why they arrived at this conclusion. Do you want to know what is good to invest if you need money in 3-5 years time and I GUARANTEE that you get better than the vivolife or any of those sold by insurance salesmen. Put it in bond and cash unit trusts with very little risk. Get it?

Anonymous   |202.156.10.15 |2011-04-17 16:38:41 Tootgal, thanks for your clarification that you are not an agent at all. Investments and retirement funds are never easy topics, and coupled with insurance protection, one can get confused. OK, to put all my questions and your responses, 1 I questioned the necessity of a 60 year old buying protection, either with a term or life. Your response did not answer the question. You said: "That is assuming the person did not have any life plan and still relyin on term plan." Unless you are referring to buying this life plan for the critical illness coverage, which I being not a financial adviser as well would not be able to comment if it is a bit too late to buy this critical illness policy. Wilfred may want to comment. 2 As for your response to my question 2, again I am not in a position to comment your statement:"But what is the premiums for stand alone ci plan? Not cheap unless you have a life plan and this Is added as an additional benefits." But using logic "there is no free lunch", I would assume that these additional benefits come with a cost which is not necessarily cheaper than if you were to get a stand alone coverage. In addition, I believe that if we were to have a reasonable and affordable critical illness coverage together with the shield policy, we would have already covered the most essential portion of the health costs. If you really want to take care of private nursing and equipment costs, then I personally think that you must be prepared to pay more for that peripheral coverage under the policy, and in my personal opinion, not an absolute must. 3 Your third response is still not clear - why does a 60 year old needs such a huge life protection? Your statement: "Vivolife is definitely not sold as a savings or endowments plan so do not mix up your points." refers. I definitely did not mix up any points. I am not the one who said that Vivolife is sold as a savings or endowment plan. I am just making a general statement on insurance protection and investments for retirement use. As I said earlier, "At least through unit trusts, there is wide diversification of instruments (both debt and equity), geographical areas, etc without having to pay mortality charges.", may I reemphasise that even in unit trusts, there are debt instruments ie bonds. As is well known among the financial planners, even a person in retirement ought to have a small portion of his money in equities to order to have a balanced portfolio to meet the future inflation risks. Don't believe me, ask any of your friends who are financial advisors! Once again, I am not saying that Vivolife is marketed as a savings/endowment plan, but rather, a policy is merely a protection instrument to be used according to the needs of the individual. It is a sad state of affairs when some agents sell such protection policies to clients who only need to put aside more money for their retirement needs.

Anonymous   |220.255.2.38 |2011-04-18 13:35:41 Vivolife is 'good' for clients who have lots of money to burn, ie for the rich. Ironically the rich don't need it.It is is the poor who need adequate coverage against critical illness and yet the poor are often the victims of vivolife which hardly protects the poor soul and also kenna conned to believe that it 'accumulates' as saving.I wonder for what. Please go to ntuc website and look at the claim history.I am not surprised that your conclusion is the following. 1. the salesmen are incompetent or greedy and unethical that these policyholders who kenna the disease are conned and their interest compromised. 2.ntuc agents are products peddlers 3.the salesmen didn't put their cleints' interest first 4.the company bullshits that they put people before commission 5.the claim statistics is same as all other companies and LIA is very proud.

Anonymous   |220.255.2.63 |2011-04-19 09:20:12 "Once again, I am not saying that Vivolife is marketed as a savings/endowment plan, but rather, a policy is merely a protection instrument to be used according to the needs of the individual. " It doesn't make sense to pay so much for so little coverage. No wonder Singaporeans are under insured because they can't make sense of their needs, right? Or is it the greedy agents who SOLD the policy to their trusting ,unwary and gullible customers? You see, something is wrong in the system. People are NOT insuring their risks enough and that is why SM Goh Chok Tong had to come out to address this problem, a stupid problem that has been perpetrated by self serving insurance companies. Even a cooperative is resorting to this so called industry best practice.You know waht the industry best practice? to con the comatose consumers as fast as you can before they wake up to realise they have cheated. I wonder what LIA's report will be this quarter....another load of crap? sale gone up but people still under insured and claim still remains the same amount enough to buy a coffin and pay off the funeral planner? Isn't sad that this association is touting its members' success but never has a thought of improving the lives of people they are serving, the consumers?

Anonymous   |220.255.1.151 |2011-06-29 13:46:17 Now vivo got 5 years limited pay . Much cheaper Beware of buying premium products that have to pay for more than 5 years However , buy term ntuc safra insurance is the cheapest . Take the spare money say 2000 put in fixed d = 15 dollars interest Then take the interest to pay for the term plan which is ntuc safra almost (100) Then when u have a sizable $ in fixed d Buy a 5 year limited The distribution cost over 15 year = as low as 0.2 percent . (estimated) But your agent wun be too happy

Anonymous   |220.255.1.167 |2011-06-29 14:22:13 Do add my comment

Anonymous   |220.255.2.48 |2011-06-29 19:21:01 vivolife is a scam..

Anonymous   |220.255.1.36 |2011-06-30 15:37:13 Please prove Vivolife is a scam. Me and my family has bought 3 Vivolife.

Anonymous   |220.255.1.118 |2011-06-30 19:10:27 Not outright scam, but very poor value unless you buy for someone who is below 10 yrs old. Even then, it can only be part of that person's total protection suite, not even 1/3 of the solution. If you buy as working adult already, does it provide 10X your annual income in coverage? This is what you need if you have dependants like young children and old parents. High chance that you don't have this coverage with vivolife or any other wholelife. After paying premiums for all your vivolife, are you setting aside another 20% of your take-home pay for retirement purpose?? If you say you cannot afford, then you are paying too much for your vivolife and this is robbing you of sufficient retirement funds. That's why most Sinkies say they prefer to work after 65. From the vivolife BI in your hand, you can see that the surrender value even at 70 yrs old won't be able to cover your retirement, if you want to maintain your current lifestyle. Maybe can cover if you live like karang-guni man. You can provide the following details for people to work out the vivolife yield for you. The yield (which is totally not guaranteed) will tend to be quite low, unless you buy vivolife for

Anonymous   |220.255.2.71 |2011-06-30 20:21:21 1.with vivolife you are likely to be under insured ....to be fully insured you may have to spend a fortune to the exclusion of your other needs. What is the purpose of insurance then? to enrich your agent and the company by impoverishing yourself? 2.as a saving plan it is very rotten...negative real return infact. 3.as a protection plan for whole life? ...how much coverage you have to keep it for so long? I bet that you never acheive it...you WILL terminate it when you are 60 years old. If you keep it you can't bear to see your cash value being stolen by the company to pay themselves. Thirdly you need money for your retirement and it is tempting to terminate it...borrow money from your cash value for your retirement is the stupidiest thing to do...ntuc laughs all the way to their bank. These are ONLY some of the rotten things your trusted agent..no, salesman, didn't tell you or didn't want you to know otherwise he or she could not earn fat commission from you. He or she was putting their interest first and definitely not yours. I beleive you are still reeling from under insurance and no cash value. Your agent will tell you that buying term you get no money back whereas buying vivolife you get back.. If he or she told you this they were telling you lies because both term and vivolife the money paid for insuring you is GONE and into the social enterprise's coffer. You better sack him or her because they are not truthful, conflict of interest at your expense. Please, my advice to you don't trust salesmen.. their title misrepresents them..don't be fooled..they are NOT financial expert and definitely no insurance expert too.They are at best salesmen and at worse conxxx. So , is vivolife SOLD to you is the solution you need? Was it told to you correctly , the truth? Why not? because if they told you the truth you won't buy. So, is it a scam?

Anonymous   |220.255.2.74 |2011-06-30 21:22:48 You are much much better off using Safra or SAF or lUV group insurance to take care of all your risk management needs because you can afford them adequately and leaves a lot of freed up money for saving and investing to give GOOD return. Only this type of insurance can give you PEACE OF MIND . Vivolife tears you to pieces financially and leaves you broke and yet NOT fully insured.

Anonymous   |220.255.2.85 |2011-06-30 22:08:06 Why did ntuc salesmen tell all the nice things about vivolife? obvious, right? if not how to earn fat commission from you. If not how to make the social company become #1? I hope you are not naive. So much has been said about the rotten vivolife and all other whole life products and you still bought them, don't know what to say to you anymore. Let you get vivo-ed for life. My advice to you...don't trust salesmen. They live off your hard earned money like gigolo. They are NOT consultants as they like you to beleive them.None of them got financial consultant degree or qualification, only INSULTANT to the real and honest consultant.

Anonymous   |220.255.2.84 |2011-07-01 22:51:17 The traditional whole life already caused you to be under insured. This vivolife is even worse. Don't be fooled by the refrain "pay 5 years and be insured for life". Put it in another way ," pay 5 years and be under insured for life", what about it?

Marcusse   |220.255.2.128 |2011-08-12 20:43:31 Please use statistics to show your claims. As professionals like Wilfred Ling, a good advisor use numbers to do the talking, not empty talks. And I see there are little comparision against other similar policies. How can Vivo be lousy if it is the one and only product available? And if there are better products, state it and prove it with numbers. Too many bias opinions here.

Anonymous   |220.255.2.37 |2011-08-12 22:34:18 Vivolife is lousy becuase 1.for same premium you can get at least 10 times the coverage. Isn't that is what you need? Vivolife can't and who buys will be under insured. 2.as a saving plan...it is real rotten...negative real return even after 30 years. So is it good saving plan? it is losing plan, right? 3. it is uncomparable becuase it is just slightly better than other similar plans. 4. it is uncomparable because it is better than the bank rate ONLY after 20 years...I mean in return and NOT that it is risk free or as liquid as the FDs. oop! cannot compare to bank rate..it is banned, illegal to compare to bank. But well,the salesmen always do . Why? to con the silly comatose but well educated PhD customers. 5.6789,10,11,12 etc there so many demerits of vivolife that will take up the whole blog. Let me tell, I gurantee you that as many as 98% will give this plan. Too many biased comments? well, we are NOT product peddling salesmen or koyok men who peddle for and only high commission BUT ADVISERS who put the customers' interest first.

Anonymous   |220.255.1.98 |2011-08-13 00:13:04 If the agent just talks about vivolife, revosave, sail, reach, vivolink --- then I know he is merely a salesman. If he focuses on family insurance plan and iterm and shield plans to cover the main protection needs first, then I know he is competent AND a person with conscience. But I guarantee you this ethical agent will either become fee-based or go into different industry, because within 1 year max, he will be fired or forced to resign.

Anonymous   |220.255.2.77 |2011-08-13 11:31:45 These salesmen should leave the industry instead living off on the earning of the poor.Secondly they can solve the FT problem. Those who don't leave but still conning their customers should be jailed.

Anonymous   |220.255.2.46 |2011-08-13 19:55:05 I hope MAS bans the commission from all insurance products immediately after Australia and UK have banned. Let's see what these vivolife supporters will say after that.I am not suprised they will sing a different song. They are chameleons.We don't know who but let the hell king pick them out.

Anonymous   |220.255.2.64 |2011-08-14 00:01:22 Insurance agents should be rewarded for ADVICE and NOT for products.

Wilfred  - re:   |SAdministrator |2011-08-14 14:16:47 Anonymous wrote: Insurance agents should be rewarded for ADVICE and NOT for products. Fully agree. However, the one who is going to pay for advice is the client. Since majority of clients only want free advice, the root problem remains unsolved which is that no one likes to pay for advice.

Anonymous   |220.255.2.47 |2011-08-14 17:57:44 In the future the insurance products will be commission free.The fee or reward will come from the advice. eg.now a $100k SA WL carries a premium of $200 per month for a 30 year old. In a no load insurance the same sum assured for a 30 year old may have a premium of only $100 without all the distribution cost. The fee charged is negotiable until agreed.It might be $1000 for advice and spread over 12 months and ongoing fee of $50 per yr from 2nd year instead of paying $2760 as it is now.. The $1000 is for advice and plan and not from the product. It might be lower because if it is a simple specific need. This is hypothetical case, it might be higher or lower depending on the standing of the adviser. People don't want to pay because they think they are paying fee on top of the commission from the product. Without commission the premium will drop drastically.In fact fee charging is lower in cost and on top of it good advice is dispensed and not product information as given by product pushing salesmen . The above is similar to the model the Australian and UK will be using in June 2012 and Dec 2012 respectively. We must push MAS to ban commission as early as possible although it is inevitable.

Anonymous   |220.255.2.29 |2011-08-15 13:31:06 Banning commission isn't enough. We must get MAS also to introduce Customer Knowledge Assessment for life insurance products to make sure the salesmen don't con the customers into ticking product advice option 3 or to make every of their customers look insurance savvy so they can peddle high commission products upfront without the fact find.

Anonymous   |220.255.2.88 |2011-08-15 23:43:27 Of all the insurance companies ntuc will be most affected by this CKA thing. Why? they are all product peddling salesmen. They may gather info but don't know how to analyse. Worse the recommendation is bull. eg. client needs 1 million coverage. Recommdantion...$50k vivolife..basis of recommendation..client has no budget now. He is advised to buy when he has the budget. Review...on bonus day.

PolicyHolder   |202.156.10.14 |2011-09-12 05:42:58 Can someone knowledgeable please comment on whether mortality charge is really applied as one gets older? E.g. I was told by my agent when I bought my Living Policy that I should lock in when I was young so I pay low premiums but I saw someone saying on this forum that the mortality charge will go up as one ages and will eat into the premiums and returns. Is this true?

Anonymous   |220.255.2.171 |2011-09-13 17:07:09 Compute the implied expense ratios from your insurance BI. This can be easily done by any beginner Commerce A-level student (do we still have Commerce stream??). Compute the expense ratios for 3 periods: 1. From age 50 to 60. 2. From age 60 to 70. 3. From age 70 to 80. If there is a marked increase in expense ratios, then there is positive correlation between possibly higher mortality charges and age.

Anonymous   |220.255.2.32 |2011-09-13 23:21:43 Actually the insurer locked in on you so that they will receive revenue or income from you for a very long time.This is the whole idea of whole life products. There is no better revenue generating products than wholelife.

Wilfred   |SAdministrator |2011-09-16 09:13:54 With immediate effect, all comments complaining against specific product providers or specific products directly or indirectly will no longer be allowed in my blog. Please go to a more appropriate platform like reach.gov.sg to air your complains.

Anonymous   |220.255.2.39 |2011-09-16 10:06:24 What about praising the providers and the products? Is that what you have been told to do? So, FAs are also resorting to half truth now. Now poor consumers are deprived of help too. Everyone is collaborating to con them. Sad indeed. The truth will set you free.

Anonymous   |220.255.2.59 |2011-09-16 18:38:11 I agree with Wilfred, go to www.reach.gov.sg to contribute your views on life insurance, investment,the insurance salesmen, the insurance companies and anyhting financial.It is a free for all feedback unit. Please do if you want your views and frustration with the agents, the products, the companies to be heard and escalated to the right agencies. There are so many contributions already. Don't make Wilfred difficult.

Wilfred  - re:   |SAdministrator |2011-09-17 09:31:57 Hiding behind an anonymous wall breeds suspicious. Anonymity comes with no responsibility. You appear to be a competitor of NTUC Income. Please air your grievous in other forums or blogs. You are not welcome here. Anonymous wrote: What about praising the providers and the products? Is that what you have been told to do? So, FAs are also resorting to half truth now. Now poor consumers are deprived of help too. Everyone is collaborating to con them. Sad indeed. The truth will set you free.

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