Mailbox: Insurer’s bonus statement misleading

I RECENTLY received my bonus statement from Great Eastern Life and was so happy to see the six-digit figures shown as current illustrated death benefits and surrender value.

But as someone who has been paying premiums for the past 22 years, I was disappointed when I took a closer look at the small print.

The current illustrated figures for both the death benefits and surrender value are based on a projection 20 years into the future.

The figures are irrelevant and, to some extent, misleading.

Policyholders hoping to make a claim or take out a policy loan may be disappointed if they did not read the small print, but how many people do take the time to read all the details?

Do they know how to derive the true sum assured from the bonus statement?

On top of the usual bonus declaration, two useful bits of information should be included: current sum assured and current cash value available for loan.

These two figures should be spelt out clearly without any need for insurance jargon.

I can understand the reason for giving attractive forecasts to potential clients but are they necessary for existing policyholders?

There have already been a few rounds of bonus adjustments since I took up my policies, and such projections could be further adjusted in the next 20 years.

I hope that the relevant authorities will stop financial institutions from sending out such irrelevant and misleading bonus statements.

Tan Aik Meng

This article was first published on June 25, 2014.
Get a copy of The Straits Times or go to for more stories.