IN these uncertain times, IT specialist Ng Check Ern, prefers money in hand, even if it means sacrificing a potentially bigger future return.
So despite assurances that his money was safe, Mr Ng, 57, decided to terminate his life insurance policy yesterday.
Mr Ng, 57, has three policies with AIA Singapore - a $100,000 life policy, an investment-linked $50,000 policy and a US-dollar-linked policy with $10,000 coverage.
Financial woes
He was among hundreds of people who thronged AIA Tower yesterday, worried about the state of their policies after AIA's parent company, American International Group Inc (AIG), became mired in financial woes.
AIG said yesterday that the US Federal Reserve would provide a US$85 billion ($122b) credit facility for two years to help it meet its financial needs.
Despite assurances by AIG and the Monetary Authority of Singapore (MAS) that AIA Singapore could meet all its policyholders' liabilities, Mr Ng was unwilling to take any chances.
He told The New Paper: 'I'm not sure about the future of my policies anymore. So I decided to terminate my life insurance policy.'
Mr Ng said he had paid about $60,000 in premiums for the $100,000 policy over 22 years. He was told by his agent that he would get back $84,000 if he cashed out yesterday, but that he could get back $100,000 if he held on for another four years.
'But, seeing how uncertain the future is, I decided to take out my money now. Besides, I can fall back on my other life insurance policies from NTUC Income and Prudential,' he said.
As for his investment-linked policy, Mr Ng said he had held it for 15 years and planned to hold it for at least another two years.
He said: 'My agent said that if I held on to the policy until 2010, I was guaranteed to get $70,000 back, and another $10,000 was possible but not guaranteed. I decided to hold out longer for the higher payout.'
Another policyholder, who wanted to be known only as Mr Vincent, terminated two of his six AIA policies. The former AIA agent said he had held the two policies for 13 years and had put in about $100,000 so far.
He said his agent told him he would get back about $70,000, but if he waited till the maturity date, he'd get about 120 per cent of the policy value. He didn't want to reveal the maturity date or the value.
'Now I have made a loss but that is a small price to pay for peace of mind,' he said.
But several others changed their minds about terminating their policies after seeing the numerous assurances by MAS and AIG about AIA Singapore's financial soundness.
Bank employee David Dai, who's in his 40s, said he had held his endowment policy for 15 years and it was two months short of maturity.
He said: 'I put in nearly $40,000 so far and my agent said I would lose a lot of money if I terminate now.
'Reading about the US$85 billion credit facility provided by the US Federal Reserve to AIG assured me that all would be well, at least for another two years.'
Said retiree John Tan, 55: 'At first, I was not convinced that AIG and AIA Singapore could weather the storm but the assurances convinced me.
'If I terminate it now, I would only get back between $150,000 and $180,000,' he said of his $400,000 whole life policy of 30 years.
Anxious crowds
The crowds began gathering outside AIA Towers by 8am yesterday - and they soon grew bigger than the day before.
One woman said she got a queue number of 108 soon after the doors opened. By mid-afternoon, many were holding numbers of 1,000 or higher.
An AIA officer said they would try to serve all those with queue numbers beginning with 1,000. But those without queue numbers would be issued numbers from 6,000 onwards and would have to go back today.
When The New Paper left at 3.45pm, the customer service staff were serving those with queue numbers 1,198 and 1,199. There were still about 600 more to go.
With additional reporting by Lediati Tan
This article was first published in The New Paper on September 18, 2008.
