Restructuring of the bonus

Dear Mr. Tan
NTUC said that the restructuring of the bonus allowed them to maintain the bonus last year. What does this mean? How does the restructuring help the policyholders get a better return?

REPLY
I do not understand their statement. I suggest that you attend the annual general meeting of NTUC Income and ask the chairman to explain this statement. 

Here is my guess. As Income has reduced the bonus sharply last year, perhaps there is no need for them to make a further reduction.  But, I suspect that the special bonus will be cut this time, quite drastically.

But, for the older series which was not affected  last year, I read that the bonus will be restructured this year, i.e. the bonus will be cut as well. 

Generally, it is fair for bonus to be reduced in a bad year, provided that the reduction is done fairly. I did not like the approach taken in the bonus restructuring, as it is difficult to maintain transparency and fairness. Some policies were cut, and others were not. Some were cut more than others. I also do not like the high expenses that were incurred and paid out of the insurance fund.

This is why I decided to terminate two of my policies where the bonus were cut, even though I had to suffer a penalty. I am now considering to terminate my remaining life insurance policies.