Whole life and endowment with low rates of commission

Someone asked me why I am against whole life and endowment plans, and why I offered these plans during my tenure as CEO of NTUC Income.

I have covered these issues on several occasions in my blog during the past two years. I shall repeat what I have said earlier.

I do not like life insurance plans that have these features:

a) Pays high rate of commission
b) Pays a low rate of bonus (i.e. less that what has been earned)
c) Gives a poor return

During my tenure as CEO of NTUC Income, the whole life and endowment plans had the following features:

a) Pays a modest rate of commission (i.e. about half of the market rate)
b) Pays a high rate of bonus
c) Gives a fairly attractive return, i.e. more than 5% p.a for policies taken in the earlier yeras.

During the last three years of my tenure, I encouraged the agents to sell term insurance and to sell an investment linked plan with low rates of commission (i.e. 15% for 3 years only).

After I left, the marketing strategy has changed.

Tan Kin Lian